In Italy, commercial and industrial energy storage systems are mainly profitable through three major paths: government subsidies, peak and valley tariff arbitrage, and capacity tariff optimisation, with the following specific mechanisms:
The Italian government has set up a special energy subsidy of 320 million euros, which focuses on supporting SMEs' energy storage projects.
The Italian government has set up €320 million in energy subsidies, focusing on supporting SMEs' energy storage projects. Energy storage-related projects can receive up to 40% subsidies (provided that the project investment is between €30,000 and €1 million), encouraging enterprises to achieve energy self-sufficiency through ‘PV + energy storage’.
In addition to the central subsidy, northern regions such as Lombardy provide an additional 10-20% local subsidy to further reduce the initial investment threshold.
The energy storage system can also participate in grid auxiliary services such as frequency regulation and standby to enhance the overall return of the system.
The peak and valley tariffs for industrial electricity in Italy are between 0.10-0.15 EUR/kWh.
For example, in the northern industrial area, the peak price is 0.25 EUR/kWh and the valley price is 0.10 EUR/kWh.
The energy storage system realises the tariff difference by ‘charging at a low price at night and discharging at a high price during the day’.
Commercial and industrial users pay capacity tariffs based on peak loads, which are on average 10-15 EUR/kW/month.
The energy storage system can reduce the maximum demand through ‘peak shaving and valley filling’, thus significantly reducing the capacity charge.
Assumptions for basic parameters:
Average tariff: 0.2€/kWh
Peak-valley price difference: 0.12€/kWh
Number of operating days per year: 330 days (minus maintenance)
System efficiency: 90% (standard for liquid-cooled systems)
Depth of discharge: 90 per cent
Government subsidy: 40% of investment (for SMEs)
Daily discharge = 232kWh × 90% × 2 times = 417.6kWh
Daily arbitrage gain = 417.6kWh × 0.12 EUR = 50.11 EUR
Annual return = 50.11 × 330 = €16,536
Assuming the original capacity demand of the business was 50kW and the monthly capacity tariff was €10/kW;
Energy storage can cut peak load by 30%, i.e., 15kW;
Annual saving = 15kW × 12 months × €10 = €1,800
Assume initial investment in energy storage cabinets is €50,000;
SMEs subsidise 40% and receive financial support = €20,000;
This part is not included in the annual income, but effectively enhances the financial return of the project and reduces the investment risk.
Revenue Items Amount (€)
Peak-to-Valley Arbitrage Gain 16,536 €
Capacity Electricity Cost Savings 1,800 €
Government Subsidy (one-off) 20,000 €
Total Annual Revenue 38,336 €
≈ equivalent to RMB 295,000 (at an exchange rate of 1:7.7)
Driven by high government subsidies, tariff mechanisms, and a capacity charge system, the Italian market has created a stable cash flow and cost-effective return path for energy storage projects. For SMEs, a 232kWh liquid-cooled energy storage system can achieve a combined annual return of more than €38,000, making it an ideal investment option for energy independence and tariff optimisation.