Energy 2026: Prices and geopolitics redesign companies

The energy transition in 2026: navigating volatility and strategic opportunities

The European and Italian energy markets are undergoing an unprecedented transformation. While 2020 was a watershed moment — with the pandemic exposing price volatility and our dependence on supply chains heavily influenced by geopolitical events — the following years have only accelerated this dynamic. Today, the energy system is more interconnected and electrified, and businesses of all sizes are fully feeling both the risks and the opportunities.

This year, and in the years to come, the primary factors influencing the market will be:
• Prices: Volatility is here to stay, fueled by international factors and structural changes in demand.
• Regulations: 2025 saw a high concentration of new rules, often introduced or changed "on the fly," testing the ability of companies to plan medium-to-long-term investments.
• Geopolitics: Recent conflicts, trade tensions, and the choices of key global players (such as China’s policies and the 2026 tariffs on photovoltaic modules) will continue to impact costs and supply.
•Technology: The evolution of plants, inverters, and storage systems — alongside the smart integration of production and self-consumption and the digitalization of processes — will play a key role.

The "China factor" and photovoltaic costs

A factor of particular importance concerns new Chinese export policies for PV modules. As of this year, the abolition of the 9% export tax rebate from China, combined with potential European tariffs, could lead to a significant increase in the cost of solar projects. However, high energy prices in Italy keep self-generation initiatives highly competitive. Postponing decisions exposes businesses to growing uncertainty and unpredictable price swings, making timely action more strategic than ever.

The most frequent mistake? Viewing change as a burden rather than an opportunity. Too often, companies wait on the sidelines, "enduring" the transition rather than leading it, or relying exclusively on incentives without evaluating the actual industrial and economic viability of the interventions.

Renewables and energy transition: the outlook for 2026

Renewables will be the pillar of the Italian energy mix in 2026. Photovoltaics, in particular, will maintain double-digit growth rates, but other technologies will see significant development: storage systems, efficiency solutions, and the revamping of existing plants.

Which sectors are the most mature? Those exposed to international markets and bound by ESG (Environmental, Social, Governance) standards: real estate, retail, and large industrial groups. Thanks to their energy awareness—often driven by regulatory obligations like mandatory energy audits — these players are already protagonists of decarbonization. Conversely, SMEs that do not undertake a structured path risk a rapid loss of competitiveness, especially as sustainability becomes a core supply chain requirement.

The real challenge now is moving from awareness to concrete action: investing in efficiency and consumption reduction even before green production, transforming energy into a strategic asset that creates value and differentiation.

Regulation and incentives: stimulants vs. obstacles

While policies like the 2028 hyper-depreciation provide a boost, regulatory fragmentation remains the main obstacle for investors. Rules change frequently, making it difficult for entrepreneurs to plan long-term.

Incentives are an important lever, but they shouldn't be the only driver. Most projects are sustainable even without them, thanks to the energy and financial savings they generate. Legislators should focus on:
• Clarity, stability, and simplification.
• Allowing the combination of different fiscal instruments.
• Promoting self-consumption, storage integration, energy communities, and remote energy sales.

This article is also published on Industria italiana, in Italian. illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.

Track the real‑world impact behind the sustainability headlines. illuminem’s Data Hub™ offers transparent performance data and climate targets of companies driving the transition.