Ivan Balytskyi, Chair of the Legal Committee of the Solar Energy Association of Ukraine (SEAU) and partner of SEAU’s chief legal advisor – the law firm Sokolovskyi & Partners, outlined the key changes for the energy market introduced by Law No. 4777-IX in an op-ed for the media outlet Energoreforma.
The Verkhovna Rada of Ukraine adopted Law No. 4777-IX on 10 February 2026, and it entered into force on 11 March 2026. The legislation simultaneously serves as a crisis-response tool and a strategic roadmap. It introduces five key changes affecting renewable energy producers, industrial consumers, and other market participants.
Background
Law No. 4777-IX amends 15 legislative acts and affects almost every participant in the electricity market – from owners of residential solar installations to the transmission system operator. Despite its lengthy official title – “On Improving the Functioning of Energy Markets, Competitive Conditions for Electricity Generation from Renewable Energy Sources, and Strengthening Energy Resilience” – its essence can be summarized in several key provisions.
RES Auctions Extended Until 2034 – with Real Financial Instruments
The first major change is the extension of the renewable energy auction support horizon from 2029 to 2034. For the market, this is not a cosmetic adjustment: the development cycle of large renewable projects in Ukraine often takes several years.
If the support horizon were limited to 2029, banks would be unlikely to finance projects launched in 2026. The new timeline restores predictability for project financing.
In parallel, the law obliges the Cabinet of Ministers of Ukraine to set an annual support quota by 1 December each year and publish a four-year indicative forecast—a so-called “visible corridor” system already tested in the EU.
One participant or a group with the same ultimate beneficiary may not receive more than 50% of the annual quota.
Another important element is the introduction of escrow accounts as a full-fledged alternative to bank guarantees. Companies may deposit a guarantee contribution (€5/kW for auction participation and €10/kW for contract performance) into a blocked escrow account without requiring a credit line.
Escrow conditions are equivalent to bank guarantees, giving the Guaranteed Buyer the same rights of claim. In the context of wartime financial stress and reduced credit limits for many energy companies, this mechanism opens the door to auctions for investors who previously hesitated.
Support horizon until 2034 + escrow accounts as an alternative to bank guarantees = a significantly lower entry barrier for new renewable investors.
Solar Power Plants with Energy Storage Become a Priority
For the first time, the law introduces PV + energy storage systems (PV+BESS) as a separate auction category with a minimum quota of 10% of the annual support volume – twice as much as for standalone solar or wind projects (each allocated 5%).
The storage requirements are strict:
- power capacity must be at least 80% of the PV plant’s generation capacity
- storage capacity must be at least 2 kWh per 1 kW of installed generation capacity
For example, a 100 MW solar plant must be paired with at least 80 MW of storage capacity and 200 MWh of energy capacity.
The logic behind this provision is to enable “evening dispatch” of solar energy. Auction conditions require producers to waive the market premium for two consecutive hours between 10:00 and 16:00, when solar generation peaks and day-ahead market prices fall due to oversupply.
This mechanism encourages producers to store solar energy during the day and dispatch it in the evening, when demand and prices are higher.
The maximum support price for this category is €0.12/kWh, creating a competitive benchmark for PV+BESS projects.
Flexible Grid Connection: Connecting Even with Congested Networks
A tool widely used in EU countries for over a decade is now introduced into Ukrainian legislation.
If the grid lacks available capacity, developers may propose “flexible connection”, meaning a connection with limited permitted capacity automatically regulated by technical means at the connection point.
A key provision states that if the developer prepares the project documentation independently, the transmission or distribution system operator may not refuse flexible connection.
For hundreds of projects that have been waiting in queues due to grid capacity constraints, this creates a real pathway to grid access. If the limitation is temporary, the date of full capacity availability will be determined by the grid development plan.
The methodology for payment for flexible connections must be adopted by the National Energy and Utilities Regulatory Commission (NEURC) within two months. This provision is particularly relevant for wind energy projects in sparsely populated regions with excellent wind resources but weak grid infrastructure.
Renewable Energy Facilities in Occupied Territories: Finally, Clear Rules
Since the start of the full-scale invasion, renewable energy facilities located in temporarily occupied territories existed in a legal vacuum.
Some producers continued delivering electricity to the Unified Energy System of Ukraine, while others were uncertain about their obligations to creditors and partners.
The law addresses this issue systematically.
Within 30 days after the law’s entry into force, the Ministry of Energy must establish a Special Commission involving:
- NEURC
- the Transmission System Operator
- distribution system operators from occupied territories
- the Security Service of Ukraine (SBU).
Within 45 days, the commission must approve a list of affected facilities and determine the exact dates of suspension and restoration of electricity delivery.
Based on this list, the transmission system operator will maintain an official registry.
From the date of inclusion in the registry, commercial metering is set to zero, meaning no payments are made for electricity generated during occupation. Payments already made must be returned.
Legal liability for damages to producers is explicitly assigned to Russia as the occupying state, an important provision for future reparation claims in international tribunals.
Energy Storage and Heat Sector: Less Visible but Important Changes
For all electricity producers – both those operating under the feed-in tariff or market premium and those without support – the law eliminates the key tariff barrier for energy storage deployment: double charging for network services.
From now on, transmission and distribution tariffs will be calculated based on the absolute difference between monthly electricity withdrawal and injection by the storage facility, rather than the total gross flows.
For example:
- if a storage system withdraws 1000 MWh and injects 900 MWh,
- tariffs will apply only to 100 MWh, not 1900 MWh.
This fundamentally changes the economics of electricity storage for producers, eliminating discrimination compared to standalone storage operators.
Administrative requirements have also been simplified:
A license is required only if the storage facility’s capacity exceeds 5 MW at a single site. Smaller systems may operate without a license.
Storage operators are also allowed to sell electricity to a neighboring consumer at the same connection point without obtaining a supply license, enabling industrial microgrid models.
Heat suppliers using renewable sources – such as biomass boilers, cogeneration plants, and geothermal installations – have also received a “30-day silent approval” rule: if the regulator does not approve or reject the tariff within a month, the tariff submitted in the application is considered approved.
For a sector historically plagued by delays in tariff regulation, this significantly rebalances the relationship between business and bureaucracy.
Conclusion
Law No. 4777-IX is not a single sweeping reform but a package of targeted changes, each addressing a specific barrier.
Together, these provisions create a new framework for the energy market:
the state prioritizes manageable and flexible renewable generation, investors receive longer planning horizons and lower financial entry barriers, and the market gains legal certainty in areas where it has been lacking since February 2022.
Subordinate regulatory acts must be adopted within two months. Until then, businesses are advised to review their projects, contracts, and assets for compliance with the new rules.
SEAU members will be able to read the full analysis of the changes introduced by Law No. 4777-IX in the upcoming issue of the Solar Digest.