"There is room for four or five-fold increases in the next few years," Silvestrini said.

Sun-washed Italy, which lags behind Europe's solar energy leader Germany, installed only 5 MW of photovoltaic power generation last year, raising the total capacity to some 40 MW, while Germany built 603 MW of new capacity.

Italy would install 80-100 MW of photovoltaic systems in 2007 and 100-120 MW in 2008 as new tariff subsidies, aimed at boosting this segment of renewable energy, and new energy-savings rules for buildings were due to kick in next year, Silvestrini told Reuters on the conference margins.

Italy's photovoltaic output per person is a third of the European Union average, according to the European Photovoltaic Industry Association.

Silvestrini said the new measures to boost the photovoltaic sector would eventually trim its high costs and make it competitive in peak hours with traditional sources -- whose costs were set to rise driven by high fossil fuel prices -- in 2010-2015.

Silvestrini said Italy has yet to submit its new national allocation plan (NAP) for cutting carbon dioxide emissions in 2008-2012 to the European Comission as the government and smokestack industries were still debating distribution of emission quotas within the target.

Italy's Economic Development Ministry, which oversees energy issues, has said it was aiming to hand the plan -- which covers the second stage of the European Union's scheme to fight global climate change -- over to Brussels by the end of last week.

Under the new NAP, Italy would cut carbon dioxide emissions to 200 million tonnes from 224 million tonnes in 2005-2007. The 2008-2012 CO2 emission limit has risen from 194 million tonnes under an earlier version.