04.09.2025
Ukrainian green energy has entered a new phase. In the context of war, debt, and high risks, it is this sector that is uniting local community initiatives, business projects, state efforts, and investor expectations.
Despite existing barriers, the renewable energy sources (RES) segment is demonstrating growth—uneven and challenging, but steady.
Solar generation is increasingly becoming a part of the energy independence strategy for businesses and communities.
For example, in just one Ukrainian city, more than 70 business entities are already using renewable energy sources, and the total capacity of solar power plants (SPPs) at industrial and municipal facilities exceeds 17 MW.
These are predominantly solar power plants integrated into the companies’ internal grids, allowing them to offset part of their consumption without feeding electricity into the central grid. This model is actively used in industry—it is simple, economically justified, and does not require complex approvals.
Energy storage solutions are also being implemented: accumulating electricity during the day and using it in the evening allows businesses to avoid peak tariffs.
At the municipal level, compensation programs are being introduced that take into account a company’s importance to the local economy. This creates additional motivation for businesses to switch to their own generation. Such an approach not only reduces costs but also builds long-term stability in energy supply.
Simultaneously with the development of RES in the regions, the market faces deep structural problems. The biggest of these is the systemic debt of the state-owned enterprise responsible for payments under the “green” tariff.
As of the end of April 2025, the debt of NEC “Ukrenergo” to the “Guaranteed Buyer” enterprise for the service of increasing the purchase of “green” electricity reached UAH 16.3 billion.
Debts to investors, which have accumulated over the years, have become the main deterrent for launching new projects.
For instance, the payment level for electricity produced in 2024 is currently 88.3%. At the same time, the settlement for 2022 is only 63.9%. This clearly illustrates the “long-term” nature of the problem.
According to industry associations, this is precisely why it has been impossible to hold any “green” auctions, which were intended to stimulate the entry of new players.
Furthermore, the general instability in state regulation reinforces mistrust. Market participants lack confidence in the fulfillment of obligations and the return on investment.
Therefore, debt repayment, political will to solve the problem, and a clear strategy for the coming years are the conditions without which restoring trust will remain under threat.
Recent legislative incentives are also in question. The exemptions on the import of solar panels, inverters, storage systems, and gas installations are set to expire at the end of 2025. The likelihood of their extension is assessed as low by the relevant Committee of the Verkhovna Rada of Ukraine.
At the same time, market participants note that it was the preferential import of equipment that helped cover critical generation needs after the massive attacks. Currently, the industry is not in such great need of additional benefits.
In the future, other factors will play a more significant role: fair market prices for electricity, the availability of project management, the presence of specialists, and simplified permit procedures.
Against the backdrop of the active development of solar generation, the system is experiencing a flexibility deficit.
According to the system operator’s estimates, Ukraine needs at least 2.2 GW of peaking capacity and 1.5 GW of energy storage to balance the power system.
Partially, these needs are already being met through special mechanisms for purchasing ancillary services, but it is strategically important to ensure the development of these specific types of generation.
Special attention should also be paid to the need to balance the RES structure. Alongside SPPs, support is needed for wind power plants, biogas projects, and small hydro-power plants. This will help reduce the risks of seasonal and weather-related dependency.
Another important area is the reconstruction of destroyed infrastructure. The company “Ukrhydroenergo” states that the Kakhovka HPP can be restored within five years after de-occupation, plus two years to fill the reservoir.
This is not just a hydroelectric power plant, but a key element of the energy balance, navigation, and water supply.
The company has already begun preparatory work. It is anticipated that the new HPP will be built using modern technologies and high environmental standards.
Given the current situation, several conclusions can be drawn.
First, even in crisis conditions, renewable energy in Ukraine is developing—at the level of communities, businesses, and local projects. Second, to scale this movement, predictable rules of the game, settlement of old debts, and synchronization with the needs of the system are required.
Ukraine already has a demand for flexible, clean, local energy—and the response to it has been partially formed. The next step is to turn individual cases into a systemic trend.
About the author:
Vadym Lytvynenko, Executive Director of NVP ENERGO-PLUS LLC. Born on October 25, 1975.
