Law of Ukraine “On Amendments to Certain Laws of Ukraine Regarding the Restoration and Green Transformation of the Energy System of Ukraine” n° 9011-d: Assessing the economics of prosumer provisions for residential rooftop PV

The increased roll-out of small-scale renewable energy sources and enabling the rise of prosumers are two of the key steps for Ukraine to the transition to a more decentralised energy system. Given the recent adoption of a net billing support scheme, this policy evaluation assesses the costs, revenues and payback periods for the installation of small-scale rooftop solar PV under the available support schemes: a feed-in-tariff and net billing. The adopted feed-in-tariff provides sufficient remuneration levels and offers a payback period of 7-8 years. The net billing scheme however has longer payback periods of 15-16 years, despite the addition of a net pay-out option. As such, the net billing scheme may fall short of providing adequate incentives to stimulate prosumer investments. To address these challenges, comprehensive reforms are necessary, including the phasing out of retail electricity subsidies (i.e. liberalisation of residential electricity retail tariffs) along with the design of the required social support measures. In addition, more specific measures can include the extension of the ‘Green Tariff’ to cover self-consumption for the feed-in-tariff scheme and net billing improvements such as the application of an annual factor to hourly wholesale prices to reduce investor uncertainty, while maintaining the right price incentives.

Rouven Stubbe, Dinara Saparova, Pavel Bilek, Robert Kirchner

What is a Policy Evaluation?

Policy Evaluations asses concrete policies that are planned/ under discussion or already implemented. They aim to add an analytical view on the policy and reform discussions.