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After enjoying many years of strong growth, the wind and solar market subsidies are being phased out, and governments are moving support from feed-in tariffs to auction-based schemes. Support mechanism changes and competition for assets are driving down the returns for renewable projects in stable, mature markets, with double digit returns typically no longer available across Europe and the US.

FTI Intelligence has modeled a range of key wind & solar markets (8 wind and 5 solar) across Europe and the US to understand if attractive returns are still available. Returns have compressed significantly in recent years (approximately 6.5 percentage points in 10 years) although WACCs have also reduced, as have the LCOEs of both technologies. This means that for the majority of markets analyzed, estimated returns were higher than the WACCs.

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