The ROI of photovoltaics in 2026: LCOE analysis and depreciation plans
In industrial planning for the 2026–2028 period, energy procurement has ceased to be a simple operating cost and has become a critical financial variable. For energy-intensive and manufacturing companies, volatility in the PUN (National Single Price) represents a market risk that directly impacts EBITDA.
This document analyzes the economic viability of photovoltaic investment payback for companies not as a simple cost estimate, but as an asset-allocation decision. We will examine LCOE (Levelized Cost of Energy) by comparing it with market forward curves and assess capital structuring options (CAPEX, leasing, rental) in light of current accounting principles.
Table of contents
The key metric: LCOE vs market scenarios
For a CFO, photovoltaics are comparable to a long-term hedging contract. An upfront cost is incurred today (CAPEX plus discounted OPEX) to stabilize energy procurement costs for the next 25–30 years.
This “industrial” cost is the LCOE (Levelized Cost of Energy). Currently, for well-designed medium-to-large industrial systems (>200 kWp), LCOE typically falls within a competitive range (often €0.05–€0.07/kWh), including maintenance, insurance, and asset depreciation.
The comparison should be made against electricity market forward curves (MTE/GME). While projections are not certainties, market scenarios for 2026 indicate energy purchase costs (PUN + spread + system charges) structurally higher than the typical LCOE of industrial projects. The positive differential represents the operating margin generated by the system, which must always be validated on a site-specific basis (irradiation profile and consumption curve).
Reference analysis: cost of a 100 kW photovoltaic system and value drivers
Taking the “minimum” industrial size as a reference, the cost of a 100 kW photovoltaic system has stabilized thanks to technological economies of scale.
However, the price per kWp is not the only ROI driver. In a financial analysis, the nominal cost must be adjusted based on specific yield (kWh/kWp) and grid connection costs (TICA).
- Irradiation: a system installed in Brindisi or Ostuni (with yields >1,450 kWh/kWp per year) significantly reduces LCOE compared to the same investment in Northern Italy.
- Self-consumption: the real value generated depends on the ability to synchronize company consumption with solar production.
Southenergy develops business plans based on a company-specific analysis of energy needs, with the goal of maximizing actual self-consumption.
Financial instruments: impacts on cash flow and the balance sheet (OIC vs IFRS)
The choice of financing vehicle (CAPEX, photovoltaic equipment leasing, or operating rental) affects EBITDA and the balance sheet differently, depending on the accounting standards adopted by the company.
| Parameter | Direct Purchase (CAPEX) | Equipment Leasing | Operating Rental (OPEX) |
|---|---|---|---|
| Balance sheet impact | Asset recognized on the balance sheet (fixed assets). | Asset recognized (IFRS 16 finance lease approach or balance-sheet approach, depending on standards). | OIC: cost for the use of third-party assets (P&L). IFRS 16: recognition of a Right-of-Use asset (Asset) and a Lease Liability (Liability). |
| Cash flow | Immediate cash outflow (or loan repayment schedule). | Periodic instalments + initial down payment (maxi instalment). | Fixed periodic fee (all-inclusive). |
| Tax treatment | Depreciation + interest deductibility. | Deductibility of lease payments (principal + interest) over approximately half of the depreciation period. | Deductibility for IRES/IRAP purposes of the fee as a service (subject to applicable requirements). |
Operating rental instalments for photovoltaics often include O&M and insurance. For companies applying OIC standards, this solution can keep the investment off the balance sheet, helping preserve liquidity ratios.
Tax and cadastral focus: depreciation and the 15% rule
Asset management requires a clear distinction between tax regulations (depreciation) and cadastral regulations.
Tax profile (depreciation)
Tax deductibility of photovoltaic systems in 2026 follows Italian Revenue Agency Circular 36/E/2013:
- Movable asset (9% per year): applicable if the system is “removable” and not structurally integrated (e.g., ballasted on a roof). Allows faster depreciation (approx. 11 years).
- Immovable asset (4% per year): applicable if the system is architecturally or structurally integrated into the building.
Cadastral profile (change in assessed value)
Regardless of depreciation, there is an obligation to file a cadastral update (Docfa) if the system increases the capital value or ordinary income of the property by 15% or more. This assessment must be carried out on a case-by-case basis by a qualified professional.
ROI analysis: model assumptions and payback
In a “market parity” scenario (without direct capital grants), ROI is driven by self-consumption. For transparency toward stakeholders, it is essential to clearly state the variables of the financial model.
Model assumptions (Southenergy example):
- System useful life: 25 years (with residual value calculation).
- Module degradation: 0.4%–0.5% per year (manufacturer-guaranteed).
- Estimated energy inflation: conservative parameter based on forward curves.
- WACC (weighted average cost of capital): defined with the client.
- O&M and insurance: included in TCO.
Applying these metrics to an industrial system in Southern Italy with self-consumption above 65%, the payback period typically ranges between 4.5 and 5.5 years. Combining with tax incentives (e.g., Transition 5.0) can further shorten these times, leading to double-digit ROI.
FAQ – Frequently Asked Questions
Payback depends on avoided energy costs (PUN + spread + charges) and the level of self-consumption. In energy-intensive industrial contexts, break-even is typically reached within 5–6 years. Each analysis must be customized: be cautious of standardized estimates below 3 years unless supported by capital grants (e.g., PNRR calls).
The 9% rate (movable assets coefficient – Group XVII) requires the system to be technically removable without altering the host structure. It is recommended to support this accounting classification with a technical appraisal and photographic documentation confirming the installation type (e.g., ballasted structures).
The choice is strategic. CAPEX maximizes long-term NPV (Net Present Value). Operating rental is preferable to preserve liquidity and, for OIC entities, to keep the asset off the balance sheet, improving capital turnover ratios (ROCE).
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