By 2020, the cost of solar and onshore wind power will be of equal level with generation from fossil fuels by the 2020s, reports, energy consultant Poyry Oyj (POY1V).
Solar plants in Spain will produce electricity viable with coal and gas as early as 2021, in Portugal by 2022 and in parts of Italy by 2025.Both solar and wind may reach so-called grid parity in Turkey by as early as 2018, says the report.
Onshore wind will be competitive without subsidies in Ireland in 2020 and in the U.K. by 2021.
The trend will catch momentum with a breakthrough in the cost and efficiency of storing energy and a rapid drop in the expense of building clean-power plants in which renewable technology can compete with conventional generation without subsidies, Anser Shakoor, senior consultant, Poyry.
Reaching parity will not create any flow of renewable installations. The capital costs will fall and efficiency will improve in the long term promising a large expansion, said, Shakoor.
The revenues of any investment now undertaken with economic life will be affected by the build of unsubsidized renewables as typical subsidy regimes are 10 years to 20 years in duration, added, Shakoor.
Investors have to confirm that revenue projections push rising amounts of unsubsidized renewables to avoid overestimating long-term profitability.