A report from the International Energy Agency (IEA) recommends three strategies to accelerate the deployment of distributed solar and battery energy storage systems (BESS) in Ukraine as the country works to increase its energy security.
The IEA has proposed three possible policy measures to increase the deployment of distributed solar energy and BESS Ukraine.
From the agency latest report says that distributed solar energy has played a key role in restoring and expanding energy capacity in Ukraine since the Russian invasion repeatedly targeted energy infrastructure.
Agency estimates add that Ukraine will need to deploy around 24 GW of distributed PV, in addition to 5.6 GWh of BESS, before the end of 2030 to create a more decentralized and secure energy system and achieve the goals of its National Energy and Climate Plan. As of 2024, the country had approximately 7 GW of distributed solar energy.
Ukraine’s existing policy for distributed solar energy includes low interest rates loans offered by the government, only available in conjunction with the recently introduced net billing scheme. The net billing system allows households to sell excess electricity at the hourly wholesale electricity price, minus the distribution system operator’s levies and taxes. IEA says the current residential electricity price is around €84 ($97.87)./MWh, but will eventually increase once subsidies are phased out.
A green tariff is also in force, offering approximately €135/MWh for solar electricity from private households, with payments set to stop after 2029.
The report states that, in the context of recent trends in deployment, incentives and current electricity prices, existing policies could lead to an additional 3.1 GW of solar capacity and a further 1.4 GWh of BESS by 2030, which is estimated to require public expenditure of approximately €1.4 billion.
It then proposes three possible policy options for the period 2025-2030 which, although requiring greater financial investments, could help raise the level of solar energy and BESS deployment above that of existing incentives.
The first proposes the introduction of an investment subsidy. The IEA suggests that the direct incentive should cover at least 60% of the total investment costs for a small-scale solar plus storage system. It also recommends a fixed and stable tariff for the sale of the entire production of the electricity generated to the energy supplier or other state entity as a way to provide additional financial support and limit risks.
The IEA says that while this policy would facilitate rapid deployment of 24 GW of solar and 5.6 GWh of BESS, it would come at high costs for the government, estimated at €17.5 billion by the end of the decade.
The second policy option focuses on strengthening existing incentives, by making low or zero interest loans more widely available by providing capacity building for local banks, or by making local governments one-stop shops for the loans.
The report adds that loans should be made available to prosumers, removing existing administrative barriers. It also suggests that the government could introduce a new feed-in tariff after 2030, exclusively for distributed solar, which would only be available if the installation is deployed before the end of the decade.
According to IEA forecasts, improving current policies would cost approximately €16.1 billion by 2030 and result in the deployment of approximately 18 GW of solar energy and 5.6 GWh of BESS.
The third option introduces a real-time/hourly self-consumption schedule. It is described as similar to the current net billing scheme and would regurgitate excess electricity with an additional payment on top of the wholesale market price. The IEA should also include a direct incentive for BESS covering 25% of the cost of the asset.
It is estimated that this policy would cost around €1.9 billion by the end of the decade, contributing to the deployment of 7 GW of solar energy and 3 GWh of BESS.
According to preliminary figures from the Ukrainian Solar Association, Ukraine deployed 500 MW of solar energy in the first half of 2025.
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