Rising prices of commodities needed for renewable energy will increase the costs of setting up new green power projects, but this will be balanced by better access to funds and economies of scale, policy advisers and an investor said.
The rising costs, as well as supply chain problems for some of the commodities and goods needed for green projects, won’t be a long-term threat to the economic viability of clean energy, they told the Reuters Global Markets Forum last week.
Overhead costs that will fall with economies of scale include items such as permit fees, labour costs for installations and customer acquisition costs.
Overall costs for the industry will trend downwards as there are few barriers to scaling up, said Harry Boyd Carpenter, managing director for green economy and climate change at the European Bank for Reconstruction and Development (EBRD).
Vaibhav Chaturvedi, fellow at the Council on Energy, Environment and Water (CEEW), saw “greenflation”, or the costs associated with going green, as a concern, especially in the short-term.