Green tariff during martial law 2022

What Solar Station Owners Need to Know About Green Tariff Payments in 2022

The number of installed solar stations in Ukraine has been increasing each year. According to the State Agency on Energy Efficiency and Energy Saving of Ukraine, there were nearly 45,000 solar stations by 2021. However, with the onset of the war, suppliers temporarily halted payments to households for the electricity generated from alternative sources. The Ministry of Energy issued an order “On Calculations in the Electricity Market”: payments for renewable energy generation are restricted during the martial law period.

On April 26, the National Commission for State Regulation in the Spheres of Energy and Utilities adopted a resolution establishing the procedure for payments under the green tariff. This procedure is in effect during the martial law period in Ukraine and for two months after its conclusion. These regulations are due to the need for stable operation of the energy supply system and a significant reduction in revenue from energy services.

Payment Size and Terms for Households

Universal service providers (USP) must purchase electricity from solar power plants (SPPs) on “pre-war” terms. No sanctions on power purchase agreements for SPPs are allowed. They set a minimum guaranteed payment amount and are required to make partial payments to producers. The cost of the electricity generated by SPPs will be determined according to the usual tariff for the population – 1.68 UAH/kWh, but multiplied by the payment percentage from consumers in a particular region in a given month of generation. For example, if in March the payment calculation indicator for consumers in the Zaporizhzhia region was 60%, the partial payment amount for March would be: 1.68*0.6 = 1.008 (UAH/kWh).

Universal service providers are required to notify household owners in paper or electronic letters about the payment amount for purchased electricity, its full cost, taxes, and estimated payment dates.

According to NEC “Ukrenergo,” they will compensate suppliers for the difference between the population tariff and the green tariff for private household installations. The balancing payment should be settled monthly in equal parts after the martial law ends in Ukraine and for another 60 days after that. The payment amount will be at least 19.5% of the value of the electricity produced by private households beyond their own consumption, calculated according to the established green tariff. Payments will be made partially according to the monthly act, but with a 2-month delay. For February 2022 – until May 15, and for March – until the end of May.

What About Legal Entities?

There are already issues in the market related to buyers, sellers, and operators. During the war, there is a significant decline in consumption and an excess of generated electricity. The Guaranteed Buyer State Enterprise cannot sell all the volume generated by producers at the green tariff. Additionally, some stations are located in occupied territories, while others are in conflict zones. It is unclear how to forecast their operation.

However, the enterprise operates, holds auctions, and earns money to cover the costs of producers. Since “Ukrenergo” did not make advances for this period. According to Order No. 140 “On Calculations in the Electricity Market” dated March 28, 2022, the Guaranteed Buyer State Enterprise settles with SPP owners for March-April at 15-20% instead of the usual 98% in pre-war times. Moreover, information on the amount of electricity generated from renewable sources due to the war is not final and clear. Thus, for March and April, the enterprise owes about 80%.

The alternative energy market is experiencing some chaos that needs regulation and system changes. SPP owners have been very concerned about the uncertainty of payments under the green tariff over the past two months. Since stations are almost not generating profit and not breaking even. To increase payments, new tools are needed, as the Guaranteed Buyer cannot physically obtain more money from the market due to the surplus of electricity.

The payment issue for legal entities can be temporarily resolved by switching the station to self-consumption instead of the green tariff. Unisolar helps with this process for all large-scale solar station owners.

But the state is committed to fulfilling all pre-war conditions properly, including the green tariff. Everyone needs to understand that after the victory, it will take at least six months for green tariff payments to return to the usual level.