Green tariff was officially entered in Ukraine in 2009. The main obligation of the state was to buy back all amount of electric power, generated with the use of renewable energy sources (RES), and also relatively high price rate for this kind of electricity.
Green tariff is a solution to provide energy independence of Ukraine. One of aims of the tariff’s acceptance was to direct national energy development not only into traditional sources sector with use of expensive fossil sources (hydrocarbons) of foreign origin, but also to stimulate active extension of alternative energy segment, using renewable, virtually inexhaustible energy sources. Shift to RES technologies is the substantial step towards energy independence of our country.
Advantages of green tariff are based on three fundamental factors:
- Producers of clean electricity receive assured connection to general electric grid.
- Long-term contract is signed, stipulating obligatory purchase of all electric power generated with the use of renewable sources.
- Special step-up coefficient is used in cost calculations on electricity bought back by the state.
Law on green tariff
Making amendments in Law of Ukraine «On electrical energy» in June 2015 substantially improved investment climate in the field of alternative energy. Alternative energy market received the effective instrument that substantially simplified business operations on green tariff and considerably increased its attractiveness:
- Effectiveness of green tariff is defined till 1 January 2030. Average capital investments recoupment period is 5-8 years (depends on photovoltaic station type, its power, location etc.), so solar energy becomes attractive for investments.
- Green tariff is nominated in EURO currency with quarterly updates.
- Process of connection to general electrical grid is considerably simplified.
- Obligatory provision about «local constituent» is abolished, that simplified the process of effective equipment choice and selection. Use of domestically produced (made in Ukraine) equipment allows to increase green tariff rate up to 10%.
Green tariff for solar power-stations
Today’s rates on green tariff, used for solar power-stations, are one of the highest in Europe, that allows to forecast stable development and further implementation of projects on building of solar power-stations in our country. As the best argument to the point it is possible to consider that more and more foreign investors begin to invest in Ukrainian sunny energy.
It is necessary to mention that nowadays two different directions are into parallel development in the country, namely industrial solar power-stations and home solar power-stations. Green tariff for industrial photovoltaic stations (enterprises) is installed at lower level and has a bit more difficult registration procedure, compared to the same for private individuals. This is due to the fact that, from one side, the state simplifies green tariff registration for the public in order to additionally stimulate development of small private solar power-stations.
On the other hand, high-power equipment for solar power-stations is substantially cheaper per 1 МW, than technologically similar, but less powerful, equipment for 10-30 kW private projects. So this allows to get very attractive rates on return of investments even with lower green tariff and slightly more difficult procedure of its registration.
Green tariff for commercial solar PV power plants
At present, Ukraine has developed a rather favorable legal environment for the development of solar energy industry. The «green» tariff is an effective mechanism that stimulates the attraction of investments into renewable energy technologies. The State shall guarantee that the entire amount of electricity produced from renewable energy sources will be redeemed on the «green» tariff. In this case, payments for electricity produced in the first place with those manufacturers who use alternative (renewable) energy sources.
Electricity is purchased by Wholesale Electricity Market of Ukraine in the face of «Energorynok» state enterprise. Payments on the «green» tariff provides for the local component, i.e. projects in its composition should have defined share of the cost of services and materials of Ukrainian origin. The law allows to set a «green» tariff for the individual queues of starting complexes and power plants from renewable sources. The State guarantees the permanence investor incentives, compared to the current at the time of commissioning of the facility renewable energy.