(ED: See also the second story from this report, Why subsidy -free solar is a no brainer for households).

The revolution in energy markets caused by the growing impact of rooftop solar PV is about to take a dramatic leap in scale.

According to analysts from the global investment banking giant UBS, the arrival of socket parity – where the cost of installing solar is cheaper than grid-sourced supplies – is about to cause a boom in un-subsidised solar installation in Europe, and the energy market may never be quite the same again.

Such forecasts have long been the province of environmentalists, climate activists, university researchers, and the occasional industry leader, such as David Crane, the head of NRG, the largest generator of electricity in the US.

Now, the team of energy analysts from UBS, writing in response to plunging power prices in Europe, has issued a stunning report entitled “The unsubsidised solar revolution” – suggesting that investing in solar will become a “no brainer” for households in several European countries, and will have profound implications for the incumbent energy industry.

“Solar has turned from a heavily-subsidised marginal technology into a mainstream source of power generation,” the UBS analysts write. ” “Thanks to significant cost reductions and rising retail tariffs, households and commercial users are set to install solar systems to reduce electricity bills – without any subsidies.”

Here’s a graph to illustrate what they mean. It shows the light blue line at the top, which indicates where grid-based electricity costs are heading.

The dark blue line indicates the cost of solar PV – it’s now at an inflection point in southern Germany and will get cheaper.

But PV with battery storage, while more expensive now, will cross over in 2014 and ultimately deliver the biggest savings.

UBS says this means utility customers will effectively become utility competitors. It estimates there could be 80GW of unsubsidised solar installed in Germany alone.

This is on top of the 32GW already installed through subsidised installation, and the 52GW cap put on subsidised installations.

“We are at the beginning of a new era in power markets,” the UBS analysts write. “Purely based on economics, we believe almost every family home and every commercial rooftop in Germany, Italy and Spain should be equipped with a solar system by the end of this decade.”

It says up to 18% of electricity demand could be replaced by self-produced solar power in these markets, at the expense of centralised generation. Even as soon as 2020, up to 43GW of unsubsidised solar could be installed in Germany, Italy and Spain, replacing up to 9 per cent of electricity demand. This is on top of reduction in demand caused by energy efficiency measures and weak GDP growth.