What is holding back the growth of wind and solar power in Ukraine?

Despite the benefits of wind energy, its development in Ukraine remains limited by tax pressures, said Volodymyr Omelchenko, Director of Energy Programs at the Razumkov Center, stressing the need to exempt imported equipment for wind farms from VAT and import duties.

He added that since February 24 2022, Ukraine has lost more than 80% of its wind generating capacity due to Russian aggression. Before that, wind energy was growing quite rapidly, mainly in the south and east of Ukraine. However, Omelchenko noted that investors continue to put money into the industry even during the war. In 2023, the first 114 MW phase of the Tyligul wind farm was put into operation in the Mykolaiv region, and seven more large projects are currently underway.

Concurrently, Vladyslav Sokolovsky, Chairman of the Board of the Solar Energy Association of Ukraine, believes that the electricity market’s current price cap system is blocking the development of industrial solar power plants, and construction has nearly halted. He explained that market price restrictions prevent new investors from implementing projects that require large capital investments.