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Discover a new market for solar energy - Ukraine

Posted by Budyansky (budyansky) on 29-07-2010
Business News >> Business news

 

Despite the fact that today the market of solar energy in Ukraine is still in its beginning of development, a favorable situation for the development of this segment of renewable energy industry has come about in the country, according to experts of the consulting company Fuel Alternative.

 

The main indicators that are important to the company deciding to start operation in the field of solar energy in the certain state market are the size of the tariff for electricity generated by solar panels, and the amount of solar radiation.

 

Also such factors as the existence and amount of public subsidies and tax preferences stimulating private and commercial sectors to install solar panels, a working mechanism for "green tariff", the level of development (saturation) of the solar energy market of the state and the investment attractiveness of the state in general, as well as lending instruments, in particular, are important.

 

We consider these factors in relation to Ukraine.

 

“Green Tariff”

 

The legislative framework for "green tariff", according to which there are different rates of "green tariff" depending on the source of renewable energy, is created and works in Ukraine.

 

Pursuant to the law, the amount of "green tariff" is set for each type of solar stations at the commencement of each year and depends on the price of electricity in this period. For solar stations located on the roofs of buildings, a "green tariff" is set at UAH 484.05 kopecks per 1 kW/h excluding VAT in 2010, if the power of a station does not exceed 100kW, and if it exceeds, a "green" tariff is UAH 463.00 kopecks per 1 kW/h without VAT. For photovoltaic objects placed outdoors, the highest rate - UAH 505.09 kopecks per 1 kW/h excluding VAT is set.

 

Thus, the ground objects of solar power today can receive a "green tariff” at the level of UAH 6.06 per 1 kWh (including VAT), or 60.6 eurocents per 1 kWh (!!!). (The market is considered "interesting" if the tariff is higher than 28 eurocents).

 

"Green tariff" became to work in Ukraine in August 2009. To this date, there are companies in the field of wind energy, small hydropower, biogas and solid biofuels which successfully have used it.

 

So far, there is not a one project in the field of solar energy to be considered by the NERC (the body that issues permits for a "green tariff"). This can be attributed to low economic activity of companies in the field of solar energy in Ukraine. In particular, there is no a one built site in Ukraine, which developers work on getting a "green tariff". However, several major projects for Ukraine in the field of photovoltaic are at the implementation stage now. The authors of these projects are planning to get a "green tariff" to the end of 2010.

 

It should be noted that an obstacle to development of the projects in the field of solar energy in Ukraine is also a lack of practical experience in preparing technical documentation for discharge into the net of electricity generated by solar panels.

 

Solar radiation

 

Ukraine has a large potential market of solar energy projects. The size of solar radiation reaches from 800 to 1450 W/m ² per year.  The southern regions of Ukraine: Crimea, Mykolaiv, Kherson and Odessa Regions are especially good for the development of solar energy market.

 

Tax preferences

 

Currently there is no subsidization of the purchase and installation of solar panels in Ukraine. However, according to the law, which came into force on 1 January 2010, the companies that produce "green" electricity, are exempt from income tax up to 2020. In addition, the companies are exempt from VAT on importation of equipment in Ukraine till 2020, if such equipment relates to the field of renewable energy and energy efficiency.

 

Investment and financing

 

An important issue for the development of solar energy market of in Ukraine is bank lending in this field. However, such lending practices, is currently lacking.

 

Investing in the production of solar panels in Ukraine is currently being considered by a number of companies, among which there are foreign investors and residents of Ukraine. The reason is the geographic location of the state, - to transport products from Ukraine to the EU and the Middle East, where solar panels are in high demand now, is cheaper. In addition, the internal market of Ukraine is by far blank  as well (solar panels are produced by one domestic manufacturer only, in this case, as experts say, at this level the beginners have an opportunity to "overbid", offering the same level of quality). Also, at present the projects for construction of solar power plants in the southern part of Ukraine are being discussed. But these projects are still in the "paper" stage.

 

Today Ukraine has a maximum financial risk level (7), which is defined by a set of factors, such as political instability, budget deficit, etc. However, it can be argued that the level of "green tariff" existing in Ukraine is attractive enough to realize projects in renewable energy in Ukraine and, in fairness, in the field of solar energy.

 

Market

 


The Ukrainian market can be described as empty, potentially large (area of the state – 603.7 thous. km2, population is 46 million people) and in the early stages of formation.

 

According to preliminary projections, the solar panels by capacity of more than 100 mW will be installed in Ukraine by 2015. And by 2013 the participants of the market of solar energy expect an undulating rise in demand for solar panels and collectors. The main demand is expected from the premises of large industrial facilities, supermarkets, farms, mining settlements, etc. It is expected that by this time the cost of natural gas (the main source for heat production) in the domestic market will grow at least twice. This, in turn, will be an important incentive for switching to alternative sources of support and development of investment projects in the renewable energy sphere.

 

Solar energy sphere is developing in the whole world, and this process is irreversible for Ukraine.

 

© Fuel Alternative LLC

 


REF-UA

 

II Ukrainian Renewable Energy Forum

 

Organizing committee: Fuel Alternative LLC
160 Frunze St., off. 909, Kyiv, 04073, Ukraine

Phone/Fax:  +380 44 498 90 56
Phone:         +380 44 383 03 56

Cell:             +380 67 501 21 77

conference@fuelalternative.cm.ua

www.FuelAlternative.com.ua

www.REF-UA.com

 

Last changed: 29-07-2010 at 10:52 PM

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