Energy Ministry intends to abandon feed-in tariffs for household solar power plants

KYIV. Oct 29 (Energy Reform) – The Ministry of Energy of Ukraine is working on the implementation of the support system for small distributed generation Net Billing, which should replace the current system of feed-in tariffs for prosumers (both producers and consumers), Head of the Directorate of the Electricity Complex and Electricity Market Development at the Ministry of Energy of Ukraine Oleksandr Martyniuk has said.

"We are focused on replacing the support system for small distributed generation in accordance with European standards and are preparing to implement the so-called Net Billing system," he said at an online forum on further integration of renewable energy facilities into the Ukrainian power system, organized by the Solar Energy Association.

According to Martyniuk, as a result of the introduction of such a system, consumers will be able to compensate for their own consumption by installing renewable energy facilities, and sell surplus electricity at a market price to suppliers.

"Funds from the sale of the resource will be credited to the consumer’s account, and when consumption is greater than generation, they will be debited at the price of supplying electricity to the consumer," he said, explaining the essence of the system.

At the same time, the head of the directorate noted that its implementation will give a new impetus to the development of distributed generation, since it will apply not only to households, but also to industrial enterprises interested in reducing payments for electricity consumption.

In addition, Martyniuk stressed: Net Billing, which will replace the system of state support under feed-in tariffs, will be focused on compensating for own consumption and will reduce the amount of cross-subsidization at the expense of other consumers.

At the same time, the new system will not affect households that are already working under the feed-in tariff. "This will be applied to new prosumers," he said, answering the clarifying question of Energy Reform.

According to the Ministry of Energy, in the first half of this year, the capacity of SPPs reached 933 MW.

As reported with a reference to the Ministry of Energy, owners of household solar power plants are abusing the market, using the current model of supporting private households under the feed-in tariff, focused on excess profits, and not covering their own consumption.

Based on a presentation of the Ministry of Energy, at the disposal of the Energy Reform Internet portal, evidence of abuse is a large number of contracts for household solar power plants with unnaturally low electricity consumption.

"Some 15% of households that have installed private solar power plants have no consumption at all, and 11% have only 1 kWh per month. In general, 41% of households consume less than 10 kWh per month, even in winter," the presentation says.

At the same time, according to a presentation formed on the data of NPC Ukrenergo, as of December 31, 2020, over 23% of contracts for connecting household solar power plants to the network are additional contracts of the same owners. Of these, 12.06% of the contracts are the second ones of the same owner, 11.06% are the third ones and more. There is a case when one owner has 82 contracts at once – the largest number of contracts "in one hand."

At the same time, 2% of households supply the network with volumes exceeding the contractual capacity, according to the presentation data.