State Agency on Energy Efficiency and Energy Saving of Ukraine Prepared Proposals that Protect Small Solar Power Plants for the Fuel and Energy Committee

Director of the Department on renewable energy sources at the State Agency on Energy Efficiency and Energy Saving of  Ukraine, Yuriy Shafarenko, informed IB Centre about this.

The number of solar panels installed by the Ukrainian households is rapidly increasing. So, at the end of the first quarter of 2019, more than 8800 families installed home solar stations with a total capacity of 190 MW.

“We have prepared simple and understandable proposals. The State Agency for Energy Efficiency and Energy Saving believes that using electricity from renewable energy sources has a significant number of benefits – both for the Ukrainian families and for the country as a whole. Therefore, this sector needs to be developed,” Yuriy Shafarenko commented.

There are more than 6.5 mln of households in Ukraine now. That is, only 0.1 per cent of them has installed home solar stations.

It should be taken into consideration that in many cases, the configuration of roofs does not allow installing solar panels in the best way on them. In addition, it is impossible to place solar panels with a total capacity of 30 kW, which is currently permitted by law, on most roofs of private houses. The issue of restrictions regarding location of solar power stations becomes even more urgent as the new Law provides that maximum capacity of a home solar power station should almost double – from 30 kW to 50 kW.

At the same time, they are aimed at strengthening the responsibility of oblenergos (regional power distribution companies) and owners of private land plots, on which solar power stations are going to be built, and introducing more strict rules to prevent abusive practice like:

– Installation of home solar stations on land plots with no dwelling houses (houses that consume electricity);

– Intentional splitting of a land plot to avoid the restrictions, established by law, regarding the maximum capacity of a home solar power station.

In Ukraine, the “green” tariff is to expire in 2030. Therefore, it is today that it is necessary to plan the ways to stimulate the development of distributed generation by small facilities.

The propositions of the State Agency on Energy Efficiency and Energy Saving of  Ukraine provide introduction of support for small solar power generation facilities (solar stations with a capacity of up to 150 kW) from 2023, including small home solar power stations, during 20 years (both for small and large solar power facilities). Instead of the “green” tariff, it is proposed to establish an average-weighted auction tariff for them. The incentive tariff will be calculated based on the results of auctions – as an average-weighted auction tariff for each type of generation. The final calculation for households and small solar power plants will be as follows: average-weighted auction tariff + 20%.

Such conditions will be a favorable background for the development of solar power generation by small facilities and for reducing the end user’s cost loading.

Average-weighted auction tariff calculation 

Source: State Agency on Energy Efficiency and Energy Saving of Ukraine

The use of incentive tariffs for small solar power plants based on average-weighted auction tariffs will allow to:

  • Establish fair (market) prices;
  • Reduce the end user’s cost loading;
  • Prolong the period of small solar power generation facilities’ stimulation;
  • Create equal conditions for the promotion of electricity generation by both small and large solar power facilities.

By the way, a clear pricing scheme, based on the same principle, is being applied by the State Agency on Energy Efficiency and Energy Saving of Ukraine to heat generation from renewable sources. The formula is: average-weighted gas tariff minus 10%. The State Agency on Energy Efficiency and Energy Saving of Ukraine has already been successfully calculating and publishing these average-weighted tariffs for more than two years. Based on them, local government bodies set incentive tariffs for generation of heat energy from renewables.

Calculation of heat generation tariffs

Source: State Agency on Energy Efficiency and Energy Saving of Ukraine

“Thus, all participants will benefit from these propositions. Investors will get a clear pricing scheme and simplified procedures, the population will have lower tariffs for electricity, and the country as a whole will increase its energy efficiency”, Yuriy Shafarenko summed up.

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