It has been two years since the Law of Ukraine No. 3220-IX “On Green Transformation” came into force. Adopted on June 30, 2023, this legislation marked the end of the fixed “green” tariff phase for industrial solar power plants (SPPs) and launched a new market-based model for the development of solar generation in Ukraine.
“We are witnessing a gradual transition of the sector to new mechanisms focused on economic efficiency, energy independence, and integration into the European market. Today, investors have access to four key instruments: self-consumption, self-generation (net billing), participation in the wholesale market, and ‘green’ auctions,” notes Vladyslav Sokolovskyi, Chairman of the Solar Energy Association of Ukraine (SEAU).
The self-consumption model allows for the construction of solar power plants solely to meet the internal energy needs of an industrial enterprise, with no right to sell electricity to the grid. In this case, a CPPA (Corporate Power Purchase Agreement) is concluded, systems up to 20 MW are permitted, and no license is required for electricity generation. In some cases, construction permits must be obtained.
The self-generation model (net billing) enables enterprises not only to consume self-produced energy but also to sell up to 50% of the SPP’s capacity to the grid. A distinctive feature is that sales are made by the industrial consumer, who must obtain the status of an “active consumer.” No licenses are required for generation or sales, although CPPAs may be used, and construction permits may also be needed.
The wholesale market model allows producers to fully participate in all segments of the electricity market — bilateral contracts, day-ahead market, intraday, balancing, and ancillary services markets. Electricity can be sold without volume or capacity limits; however, the SPP must acquire market participant status and relevant licenses. Additionally, the producer must independently manage imbalances.
“This model creates additional revenue streams for producers and encourages effective integration into the competitive energy market,” emphasizes Mr. Sokolovskyi.
The “green auction” model provides state support in the form of a market premium (contract for difference) following a successful bid at an auction conducted by the State Enterprise “Guaranteed Buyer.” The support term is 12 years, and the maximum premium is up to €0.08/kWh. SPPs may also sign CPPAs and freely sell electricity without volume restrictions. Obtaining a license and market participant status is mandatory.
“This is an extremely important tool for attracting institutional capital and supporting the stability of the sector,” adds the SEAU Chairman.
The Solar Energy Association of Ukraine encourages developers, investors, and industrial consumers to actively implement new models and leverage the advantages of a legally structured market. Transitioning to these new approaches opens up greater opportunities for innovation, scaling, and energy independence.