Ukraine has significant potential for developing renewable energy, which today is not just a promising direction but a pressing necessity. Russia’s full-scale invasion has compelled both the state and society to reconsider the role of green energy — it has repeatedly proved vital during critical power shortages. In her column for LIGA ZAKON, Olha Savchenko, a member of the Board of the UBA Energy, Oil and Gas Law Committee and Senior Partner at Altelo Law Firm, outlines key regulatory changes, new support mechanisms for renewables, and the market's challenges and opportunities.

The state’s commitment to the development of renewables is evidenced by the adoption of several strategic policy documents, including:

• The National Energy and Climate Plan until 2030 (NECP, Cabinet of Ministers Decree No. 587-r dated June 25, 2024),

• The National Renewable Energy Action Plan until 2030 and its implementation roadmap (Decree No. 761-r dated September 13, 2024),

• The Distributed Generation Development Strategy until 2035 and the associated operational implementation plan for 2024–2026 (Decree No. 713-r dated July 18, 2024),

• The Smart Grid Implementation Concept until 2035 (Decree No. 908-r dated October 14, 2022),

• And the Smart Grid Roadmap (approved by the Ministry of Energy on May 19, 2024).

These documents outline a significant expansion of renewable energy capacity, aiming for 43,894 GWh of electricity from renewables by 2030, including 7.2 GW from solar power, 5 GW from prosumers, 6.214 GW from wind, over 1 GW offshore, 876 MW from biogas, and 40 MW from geothermal sources.

Thus, at the strategic and declarative levels, the development of renewable energy shows great promise—an assertion further supported by legislative changes.

Development of Small-Scale Renewable Electricity Generation

According to the Law of Ukraine “On Alternative Energy Sources” (No. 555-IV dated February 20, 2003), private households are eligible for feed-in tariff support if they install solar PV systems up to 30 kW (or 50 kW if installed on rooftops or façades).

Today, installing solar systems under the feed-in tariff remains popular, particularly due to power supply restrictions and the financial viability of such installations. The process for increasing system capacity and obtaining the tariff is straightforward and accessible via an online portal.

Small consumers generating and using electricity with rooftop solar installations up to 150 kW are also entitled to the tariff if they obtain active consumer status and sign a contract with the Guaranteed Buyer state enterprise.

Self-generation is a separate support mechanism for both small consumers and businesses aiming to meet their energy needs. This is governed by Article 9-6 of the same law and the National Energy and Utilities Regulatory Commission (NEURC) Resolution No. 2651 dated December 29, 2023.

Under this framework, consumers can install PV systems for self-use and sell surplus electricity. Excess energy is credited to a virtual account and can be used for future bills or refunded upon request. Eligible users include households (up to 30/50 kW), small non-household consumers (up to 50 kW), other consumers and cooperatives (up to 150 kW), and large consumers (within their consumption limits). Surplus is sold at day-ahead market prices for households and small businesses, and at free prices for others, with a 50% cap on exports for large consumers.

To apply this mechanism, users must configure technical settings, ensure metering, register the generation unit, and sign a self-generation agreement.

Aggregation

Another model for producers with up to 20 MW capacity is aggregation, defined by the Law of Ukraine “On the Electricity Market” (No. 2019-VIII dated April 13, 2017). Aggregation involves combining the capacity of various producers, consumers, and storage units to participate in the electricity or balancing markets or provide ancillary services. Aggregators sign contracts with group members and act on their behalf. They are professional market players able to optimize electricity sales and coordinate participants lacking technical expertise.

Both self-generation and aggregation were introduced in 2023, with detailed regulations adopted in 2024. While improvements are needed, the framework already enables significant growth in decentralized electricity generation.

Solar Energy

A major incentive for solar development is the exemption from import VAT and customs duties for solar equipment, under the laws No. 3853-IX and No. 3854-IX dated July 16, 2024.

Legislative changes have also simplified the use of energy storage systems (ESS) in combination with generation units. Article 71 of the Electricity Market Law allows ESS installation without separate permits or licenses, provided certain capacity and metering requirements are met. Producers under the feed-in tariff or auction support may store electricity without losing benefits, enabling them to balance generation and improve project returns.

Another promising development is the cable pooling mechanism introduced by Law No. 4213-IX dated January 14, 2025. It allows combining different energy sources at one grid connection point — exceeding capacity limits for production, but not for output, if accurate metering is ensured. This helps optimize existing grid connections and stabilize output.

Wind Energy

Wind power is among the most promising renewable sectors. Several projects began in 2025, including 80+ MW by “Wind Farms of Ukraine,” 40 MW by Sokal Wind Power Plant (Eco-Optima), and 386 MW by Tyligulska Wind Farm. OKKO Group has also announced wind energy investments.

Investor interest, particularly from Europe, remains strong. Recent legislative developments include capacity reservation requirements for projects over 20 MW, regulated by Law No. 4213. This involves signing a reservation agreement with the Transmission System Operator (TSO), paying €5,000 per MW into an escrow account for up to two years.

Additionally, a price guarantee fund is expected, enabling access to loans backed by international financial institutions.

Biogas

Despite significant potential, biogas and biomass projects remain rare in Ukraine. In May 2024, Law No. 3613-IX amended customs procedures for biomethane, aimed at unlocking export opportunities due to suppressed domestic gas prices.

However, unresolved legislative conflicts — such as harmonization of origin guarantees with EU standards and the absence of a biomethane register — still hinder development and require resolution.

Looking Ahead: Necessary Reforms and Legislative Initiatives

Key pending legislative initiatives include:

• Draft Law No. 12372 (dated December 30, 2024) on war risk insurance for renewable energy infrastructure;

• Draft Laws No. 12087 and 12087-1 on electricity market coupling in line with the EU acquis;

• Introduction of energy communities under the EU's Fourth Energy Package;

• Improvements to the auction-based support system for renewable producers.

In addition, critical non-legislated steps include addressing power market debt — especially energy generated in occupied territories — and clarifying liability for imbalances during the period governed by a now-invalidated formula (Supreme Court ruling in case No. 640/4069/21, September 8, 2022). Mediation efforts with the Energy Community are already underway.

To further support decentralized generation, customs and tax incentives must continue. Expansion of duty-free equipment lists to include wind power components is also essential.

Lastly, active consumer and aggregation mechanisms must be adapted for practical use by municipalities and communities.

Ukraine’s geographic and resource potential makes the renewable energy sector highly promising. However, to retain investor trust and secure new capacities, the regulatory environment must be stabilized and improved swiftly—because the need for new energy infrastructure is urgent and immediate.