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IEA (2025), Policy options to accelerate distributed solar PV in Ukraine, IEA, Paris https://www.iea.org/reports/policy-options-to-accelerate-distributed-solar-pv-in-ukraine, Licence: CC BY 4.0
This report explores the current policy landscape for distributed solar PV in Ukraine and outlines three potential policy options to accelerate the deployment of this technology. It focuses on expanding the capacity of distributed solar PV to achieve the modelled results from IEA report Empowering Ukraine through a Decentralised Energy System, which outlines a pathway to rebuild and modernise Ukraine’s power sector amid ongoing attacks on energy infrastructure.
The IEA estimates Ukraine would need to add around 4 GW of distributed PV per year until 2030 (over 24 GW in total) to create a more decentralised and secure power system and achieve the objectives laid out in its national energy and climate plan (NECP). Ukraine will also need an additional 5.6 GW of new BESS by 2030 (0.9 GW per year). In this context, a fast buildout of distributed solar PV and BESS is needed.
Ukraine had more than 9 GW of installed solar PV capacity prior to the Russian Federation’s full-scale invasion in 2022. Most of the capacity was from distributed installations. Utility-scale capacity advanced rapidly from 2018 to 2020, driven by the feed-in tariff (“Green Tariff”) policy.
However, this capacity was affected by Russia’s invasion of Ukraine, with roughly 1 GW of (mostly utility-scale) solar PV capacity damaged, destroyed or inaccessible due to occupation. Combined with hydropower (-1.5 GW) and wind power (-1.3 GW) losses, the drop in capacity resulted in a nearly 4 TWh decline in total renewable generation from 2021 to 2022. The war also had an impact on the pace of new utility-scale installations.
Solar power was a leader in renewables deployment in 2024. According to various sources, including the Ukrainian Ministry of Energy, around 300 MW (and up to 900 MW, depending on the source) of new solar PV was installed in 2024, including behind-the-meter installations1, while 20 MW of new onshore wind power came online. Thus, reaching the required 24 GW of new distributed solar PV for a distributed energy system by 2030 implies that the total installed capacity more than quadruples from the estimated capacity of around 7 GW in 2024.
2023 values are estimated = estimated capacity for 2030. 2030 modelling results from IEA (2024), Empowering Ukraine Through a Decentralised Electricity System.
IEA (2025), Renewables 2025; IEA (2024), Empowering Ukraine Through a Decentralised Electricity System.
As Russia continues to strategically target Ukrainian energy infrastructure ahead of the fourth winter since the beginning of the war, large-scale plants, both conventional and renewable, are particularly vulnerable to attacks given their size and location. The areas of highest solar PV resource potential in the country are in the south. Other plants were also affected by flooding after the destruction of the Kakhovka hydropower dam in 2023. Damaged installations can be rebuilt (and will receive the same compensation they qualified for when commissioned), but the risk in these locations remains high from developer perspective.
Distributed solar PV applications can provide a solution to the challenges threatening infrastructure in Ukraine. First, given their small capacity, distributed solar PV applications can be deployed more rapidly (in a couple of months) than utility scale solar PV (in around one year) or wind power (two to three years). In addition, given the proximity to demand centres, the needs of distributed resources for repairs, upgrades or new build of transmission infrastructure would be minimal, reducing both cost and time required to provide power to the grid. Ukraine recognises the positive impact distributed energy resources can have, with distributed plants potentially removing vulnerabilities faced by large-scale installations, as they have no single points of failure, are more difficult to target in an attack, less complicated and faster to repair and less dependent on the overall health of the grid.
The amount of distributed solar PV in Ukraine has grown significantly since 2019, with installations by around 70 000 households (under a fixed tariff scheme) seeking resilience and cost savings. Interest in installing solar PV on rooftops has remained strong while attacks on energy infrastructure and the frequency of outages have increased. Ukraine’s international partners and the government have prioritised the installation of solar PV on hospitals and schools. The Government of Ukraine has introduced several incentives to help reduce the financial burden on individuals. Zero interest loans (for up to EUR 10 000) are available to households for a 10-year period to spur continued investment, and there is an exemption on value-added tax (VAT) and import duty relating to solar PV systems, batteries and other technologies. The GreenDim programme helps fund rooftop solar PV on apartment buildings run by homeowners’ associations and the “5-7-9% Affordable Loans” programme supports commercial and industrial customers. Ukraine’s “Decarbonisation Fund” provides low interest loans for decarbonisation projects in schools, hospitals, industry and small and medium-sized enterprises.
Two programmes provide further incentives to generate power. Distributed solar PV systems can qualify for the Green Tariff: a programme that enables residential systems of up to 30 kW generating electricity from renewable sources to sell it to the Guaranteed Buyer. The Green Tariff provides a fixed payment for net energy provided to the grid and has an official end date of December 2029. Distributed energy systems can also qualify for the Net Billing Programme introduced in late 2023, which provides cost reduction based on the wholesale market price. Payment for each of these programmes depends on system size, with small systems receiving benefits from electricity suppliers and larger systems receiving payment from the Guaranteed Buyer, a publicly-owned organisation. In both cases, the end consumer relies either fully or partially on the state, with revenues for payment coming from wholesale market sales and a transmission tariff.
Additionally, many residential and industrial consumers installed solar PV capacities behind-the-meter (BTM) to ensure the security of electricity supply before winter 2024/2025. The distribution system operator is not informed in most cases (e.g. installation of 6-15 kW by residential consumers), as these consumers do not install meters and do not sign supply contracts. In addition, most solar PV systems, since 2023, have been installed with battery energy storage systems (BESS). Pairing distributed solar PV systems with BESS can provide power for longer and help with system integration and flexibility. Several hospitals and schools are already benefiting from this joint approach.
While Ukraine’s programmes for solar PV and other renewable technologies have been effective in attracting investments, there have been concerns with the implementation of these programmes such as retroactive reductions of awarded feed-in tariff levels and developers not receiving payment. The Green Tariff programme prompted a boom in renewable energy capacity in Ukraine. Despite its success in attracting investment in renewables, this feed-in tariff has so far resulted in developers going without payment due to financial challenges faced by the off taker. As a result, the tariff was reduced by 15% for solar installations in 2020. Despite these measures, the transmission system operator (TSO) Ukrenergo still owes the Guaranteed Buyer, the state-owned off taker of electricity from renewable sources around EUR 335 million, to compensate those that produced electricity under the Green Tariff programme from 2022 to 2025. Payments are being made, but as a result of this persistent indebtedness of the Guaranteed Buyer, most wind power producers decided to switch from the Green Tariff to market electricity sales when the opportunity arose in 2023.
Persistent power cuts due to Russian attacks on generation and transmission infrastructure continue to drive demand for distributed solar PV, as consumers intend to partly produce their consumed electricity themselves. However, the challenges of the existing programmes are reducing the uptake in Ukraine. The outstanding debts owed to renewable developers have decreased investor confidence, potentially reducing the number of developers willing to build projects that qualify for a programme receiving payment from the government. This was evident in the December 2024 pilot auction, when the 11 MW available received no bids. In addition to improving the financial situation of the off taker, alleviating, streamlining and removing barriers to system installation could facilitate increased deployment.
The Solar Energy Association of Ukraine (SEAU) estimates 800-850 MW of new solar PV capacity was added in 2024.
The Solar Energy Association of Ukraine (SEAU) estimates 800-850 MW of new solar PV capacity was added in 2024.
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