This clarification is based on paragraphs 127-quinquies and 127-sexies of Table A, Part III, annexed to Presidential Decree No. 633/1972. These provisions apply a 10 per cent VAT rate to solar-photovoltaic and wind power generation plants, respectively, and to finished goods supplied for the construction of such plants.
In this specific case, the applicant was a company that was already engaged in the production of energy from photovoltaic sources via an authorised, connected and operational plant, with an expected annual output of approximately 8,069 MWh, and intended to purchase a storage system comprising, amongst other things, two 5 MWh units and two PCS units of 2.5 MW each. The system was to be used in hybrid mode, with input energy coming from both the PV plant (approximately 700 MWh/year) and the grid (approximately 2,500 MWh/year).
According to the Agency, however, the energy storage system does not generate energy but merely stores and releases it; for this reason, it constitutes infrastructure that is functionally linked to the photovoltaic system but technically distinct from the generation plant.
In this regard, the response also refers to ARERA’s definition of a storage system as a set of devices designed to absorb and release electrical energy, which may or may not be integrated with a generation plant. The Agency further reiterates that the preferential tax rules are to be interpreted strictly and cannot be applied beyond the cases expressly provided for. In case law, it is now well established that the reduced rate provided for under Article 127-quinquies applies to the plant as such, whilst individual assets may benefit from Article 127-sexies only if they are actually used for the construction of the plant.
In the case under consideration, the photovoltaic system was already fully operational even without the BESS. This is, in fact, an electricity storage system and not a generation system. Precisely for this reason, the battery was not considered either a component necessary for the construction of the system, nor an extension or a new ‘partial’ construction of the same.
In practical terms, the principle that emerges is as follows: it is not sufficient for the asset to be useful, connected or functional to the photovoltaic system; rather, it must be a necessary element for its construction.
It follows that, in the Agency’s view, the supply and installation of a storage system at an existing PV system must be subject to the standard VAT rate of 22 per cent.
In summary, response no. 181/2026 confirms that, for VAT purposes, storage and generation remain distinct concepts: the BESS may be integrated with the photovoltaic system from a technical and operational perspective, but this is not sufficient to bring it within the scope of the 10% reduced rate.
We would also like to thank Sarah Isabella for their contribution to this article.
