Shifting support in the West sheds new light on Ukraine’s ‘resilient’ C&I PV boom

Following three years of bombardments and damage to its energy infrastructure, Ukrainian businesses are turning to self-consumption solar PV systems to keep the lights on.

Figures from the Solar Energy Association of Ukraine (SEAU) earlier this year showed that the country added around 850MW of solar PV capacity in 2024, the majority of which came from self-consumption systems installed by businesses. It’s “become a trend”, Semenyshyn says.

Since those figures were published in early January, US president Donald Trump has begun to withdraw US support for Ukraine and ushered in a new geopolitical uncertainty which puts greater pressure on the country’s energy system. This is to say nothing of the recent withdrawal of military aid and intelligence sharing. But the continuing flow of European support, action from private businesses and the work of foundations like RePower Ukraine is keeping things moving.

A strained system

“The overall energy situation in Ukraine is not good,” says Vladyslav Sokolovskyi, chairman of the board of the SEAU. “A lot of power plants were damaged – we have lost a minimum of 60% of our capacity.”

Indeed, a September report from the United Nations Human Rights Monitoring Mission found that Russian attacks on Ukrainian energy and electricity infrastructure have “compromised essential services, including water distribution, sewage and sanitation systems, heating and hot water, public health, education, and the economy” and have added to the war’s death toll. The same report said that a series of nine attacks over the course of 2024 knocked out “around 9 gigawatts of electricity generation capacity – equivalent to half of what Ukraine requires during winter months.”

Before the full-scale war broke out in 2022, Sokolovskyi says that the Ukrainian solar energy sector, in particular, was markedly different.

“We in Ukraine were building a lot of industrial solar power plants [before the full-scale war], and they used the feed-in-tariff,” he says. These plants had a guaranteed buyer in the state-owned energy system operator which was paying a feed-in-tariff to the companies involved.

According to Semenyshyn, Ukraine had “around 10GW of renewables in the system” in January 2022, “and around 8GW of solar which contained 6.5GW of utility-scale and around 1.5GW of residential and C&I.”

‘Thinking of energy security’

Now, “The situation has completely changed,” Sokolovskyi says.

“The war was a catalyst for building smaller, decentralised energy, including green energy like solar PV.  [Particularly] in the last year we have seen a lot of businesses building solar plants for self-consumption, thinking first of all about energy security.”

Russian attacks on Ukraine’s energy infrastructure and grid have resulted in numerous blackouts over the last three years. Energy has been a major target for Russian drones and missiles throughout the war, with an intensification from the spring of 2024; at the time of writing, news broke overnight that Moscow had carried out a “massive” missile attack on Ukrainian energy infrastructure.

The International Energy Agency (IEA) published a report in September following “wide-ranging” attacks on Ukraine’s energy infrastructure. It said that the country experienced an “acute power deficit” in the summer of 2024, as the consequences of attacks combined with a heat wave to push the system operator, Ukrenergo, to schedule blackouts across much of Ukraine.

This triggered an increase in self-consumption PV and energy storage among Ukrainian businesses and homes, seeking energy security and greater resilience against the damaged grid. Sokolovskyi says this was aided by a government exemption of VAT on energy-generating imports, including PV modules, and the issuance of interest-free loans for private energy generation systems.

Solar technology and the financial support for installations have been particularly significant for Ukraine’s agricultural sector.

“I see demand from agricultural companies thinking about energy security,” Sokoloyskyi says. “The financial situation in Ukraine is not very good, so few businesses [are able] to build new solar power plants – but agricultural businesses have this option.”

The agricultural sector is a major pillar of Ukraine’s economy; its 2021 agricultural exports totalled US$27 billion; 41% of its total exports, according to the US Department of Agriculture. Beyond the economic impact at home, Ukraine’s major food exports are a vital part of the international supply chain. Ukrainian wheat, corn, sunflower oil, rapeseed and barley meet demand across Europe and beyond, and the UN humanitarian food assistance organisation has reportedly sourced 40% of its wheat from Ukraine.

Fundamentally, the ease of deployment and affordability of solar PV and, increasingly, distributed energy storage systems, mean more sustainable, dependable energy and the ability to continue working despite the depredations of war. This is why the C&I market has boomed.

“Solar power plants can help Ukrainian society,” Sokolovskyi says, by giving energy independence to private citizens and businesses. Moreover, support for critical infrastructure like hospitals, clinics and schools – the kind of work Semenyshyn’s Repower Ukraine does – often comes from PV and energy storage combined.

International aid and beyond

The future, however, is uncertain. From a PV standpoint, Sokolovskyi predicts that “80%” of new PV plants will be built with storage (largely due to the grid challenges) but that “we won’t see [a return of] large-scale projects this year.”

Whenever the war ends, he expects a “boom” for Ukrainian PV investment as the gaping hole opened by the attacks will need to be filled. What peace might look like has taken a turn in recent weeks, however.

A few days prior to suspending military aid and intelligence sharing with Ukraine, just before his shocking meeting with president Zelenskyy in Washington, Donald Trump’s government suspended its energy aid funding for Ukraine. The US Agency for International Development (US AID) had been supporting Ukraine’s grid infrastructure with hundreds of millions of dollars; now, it is suspended as the president and his de facto right-hand man, Elon Musk, withdraw the US from a number of international arenas.

A few days before US AID withdrew, the European Commission announced it was “stepping up” its support for Ukraine’s energy sector, with plans to “accelerate investments in renewable energy, adding up to 1.5GW of generation capacity” as well as integrating Ukraine with Europe’s electricity market. President of the commission, Ursula von der Leyen, said at the time: “With the package we offer today Europe will ensure Ukraine has a resilient, secure and competitive energy system. More renewable energy and full energy markets integration will bring to greater energy security both for Ukraine and the European Union.”

The changing support from the US and Europe makes easily deployable solar PV simultaneously more important and less certain. Sokolovskyi says that Ukrainian businesses’ move towards self-consumption – and through that a more decentralised and resilient energy system – will retain its momentum and become more important than ever. “We very [much] need to have a decentralised grid and energy sector,” Sokolovskyi says.

Both he and Semenyshyn agree that private sector investment will be key to future expansions of Ukraine’s solar energy sector.

“The Ukrainian solar market is open for new investment,” Sokolovskyi says. “[within] our association we can see a lot of interest from foreign companies and Ukrainian companies; a lot of businesses are thinking about new projects. We need a lot of new energy capacity and solar PV can solve some of those problems.”

“Businesses should come and see the business case,” Semenyshyn says. “The payback period [on investments] for self-consumption PV systems is very short, but the risk is a factor. The barrier [for foreign investors] in Ukraine is that you cannot find information about the risk mitigation mechanisms and how to understand your risk as an investor.”

Those risks are obvious and not inconsiderable; energy systems are always a target in any aggressive campaign.

“But I’m pretty sure there’s a huge space for utility-scale [solar] development in Ukraine,” he continues. “Ukraine has a big territory under its control, industry and electricity consumption expected to grow and at the same time, a lot of energy facilities are destroyed. [I believe] we could use flexible solutions like renewables and storage or combined with balancing capacities to create a new energy system.”