22.09.2026
The energy service model could become one of the practical mechanisms for attracting private capital to the modernisation of municipal utilities and critical infrastructure facilities. Vitalii Shevchenko, CEO of the Panorama Group of Companies and Chairman of the Ukrainian Association of Energy Service Companies, discussed the potential application of this model to solar generation and energy storage projects during the Energy Club forum “Energy Freedom: Resilience and New Opportunities in Ukraine’s Energy Storage Market,” held in Kyiv on 17 September.
At the beginning of his presentation, Vitalii Shevchenko thanked Energy Club for creating a platform that brings together private capital, the government, the regulator and local communities to discuss practical solutions for strengthening energy resilience.
He focused on the potential of energy service in municipal infrastructure and the possibility of transforming communities’ need for energy modernisation into a clear investment model for private businesses. “Energy service is essentially a mechanism through which a critical infrastructure facility is modernised using private investment. It may be a water utility, a hospital or another facility that consumes a certain amount of electricity. The investment is repaid from the guaranteed savings achieved. In other words, the community does not make its own capital investment, while still receiving guaranteed savings,” Vitalii Shevchenko explained.
According to the figures he presented, approximately 800 energy service contracts have already been concluded in Ukraine, with total investment under this mechanism amounting to around UAH 5 billion.
Vitalii Shevchenko noted that the initial stage of energy storage development in Ukraine had already generated practical interest in the use of these systems at the community level. Municipal energy plans, local generation and the creation of energy islands for public infrastructure are becoming increasingly important. He identified the protected status of energy expenditure within municipal budgets as one of the advantages of working with public-sector facilities. This creates the basis for a predictable cash flow from which private investment can be repaid. “An investor is not simply buying some kind of box – an energy storage system, for example – and installing it at a municipal utility. In practice, the investor receives a guaranteed cash flow throughout the term of the energy service contract,” he emphasised.
According to Vitalii Shevchenko, the potential scale of this market is significant. Ukraine has more than 100 water utilities, approximately 600 hospitals, around 5,000 critical infrastructure facilities, large energy companies and numerous municipal enterprises that require modernisation. “Even if only 10-20% of these facilities prove suitable for investment and modernisation, this already demonstrates the scale of the opportunities available to private investors,” he said. These projects are not limited to the installation of individual pieces of equipment. For communities, they can improve energy security, reduce energy costs and ensure the stable operation of facilities responsible for providing essential services to residents. “This represents billions of hryvnias in investment that could help communities become more energy independent. It is not only about economics – it is also about energy security,” Vitalii Shevchenko stressed.
During his presentation, he referred to energy service projects involving solar power plants that deliver cost savings and improve the resilience of facilities. According to Shevchenko, the estimated capital expenditure for a 1 MW solar power plant may amount to approximately UAH 30 million. Ukrainian legislation allows energy service contracts to be concluded for up to 15 years, while the estimated payback period of certain solar generation projects under current conditions may be approximately 4.6 years.
At the same time, applying the energy service model to energy storage systems requires more detailed analysis. During the discussion, panel moderator and Energy Club Vice President Valerii Bezus highlighted a potential conflict between an investor’s interest in operating a battery as intensively as possible to maximise revenue and the need to control its degradation so that the customer receives a functioning asset once the contract expires.
Vitalii Shevchenko acknowledged that equipment degradation is one of the key risks associated with long-term energy service contracts. While the degradation of solar panels can be projected at approximately 1% per year, the Ukrainian market does not yet have sufficient practical experience to reliably assess the condition of a particular energy storage system after 10-15 years of operation. “When an energy service contract is concluded with a municipal enterprise, the question of additional capital investment arises because we do not know the exact period over which the equipment will continue operating as expected. It must provide guaranteed savings for the customer while also repaying the investor’s capital expenditure. However, today we do not yet have enough experience to predict precisely what condition the equipment will be in after 10-15 years,” he explained. This means that project structuring requires particularly careful consideration of equipment selection, manufacturer warranties, battery operating modes, the expected number of cycles, maintenance costs and the possible replacement of individual components.
For customers, the advantage of the energy service model lies in the ability to modernise an energy facility without making an initial capital investment from the municipal budget. Part of the savings achieved is used to repay the investor, while the municipal enterprise benefits from lower energy costs and greater security of supply.
Vitalii Shevchenko also identified improvements in the quality of public services, job creation and reduced emissions among the potential benefits of such projects. He devoted particular attention to the importance of thorough project preparation. The starting point should be the facility’s baseline consumption, followed by a detailed analysis of its hourly load profile and a comparison with the potential output of a solar power plant or the operating modes of an energy storage system. “There is a baseline consumption profile for the facility. Its actual consumption schedule must then be analysed in greater detail and matched with the output that a solar power plant or an energy storage system can provide,” the speaker said. Among the main barriers to scaling energy service projects, Shevchenko identified the shortage of well-prepared projects, insufficient political will among some customers, unclear rules, complex procedures and inconsistent regulatory policy. According to him, these problems are preventing Ukraine from moving rapidly from individual projects to the systematic modernisation of municipal infrastructure. “We understand the potential and opportunities of this market. However, these facilities should not be implemented merely as isolated projects. Ukraine needs hundreds and thousands of successful cases,” Vitalii Shevchenko concluded.
