On 16 February 2023 the Italian Government passed regulation with effect from 17
February that will remove the Italian consumers' possibility of selling tax
credits for their home energy improvements, including solar and battery
installations to third parties. 

Up until the change in regulation, homeowners could choose to settle 50% of the
purchase price through sale of their tax credit receivable. This option of
selling the tax credits, which was chosen by a majority of consumers and fuelled
the Italian solar market, is now removed. Consequently, consumers will have to
deduct the tax credits towards personal income taxes over ten years. 

Italy is Otovo's largest and fastest growing market. While there is currently a
lot of uncertainty about the implementation of this regulation and its effects,
Otovo management's immediate assessment is that the changes in Italy will
negatively impact Group sales in the quarter and, to a lesser extent, slow down
the installation pace. The magnitude of this slowdown is uncertain. The impact
on projects in the pipeline and in the process of being installed remains
unclear, and could result in an increased level of abandonment. 

The tax credits from installed projects are not perceived to be impacted by the
changes.

- The Italian Government has come with an unnecessary and surprising move.
Unfortunately some governments can't help themselves from getting in the way of
a fast transition to clean energy at a critical time for Europe. For Otovo now
the focus is on taking care of customers and getting clarity on how the new
rules should be interpreted, says Andreas Thorsheim, CEO of Otovo.

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About Otovo: For homeowners, Otovo is the easiest way to get solar panels on the
roof, and batteries in the home. Otovo is a marketplace that organises hundreds
of local, vetted, high quality energy installers. The company uses its
proprietary technology to analyse the potential of any home and finds the best
price and installer for customers based on an automatic bidding process between
available installers.

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