Ukrainian plan to reduce FITs sparks protests

Amid serious financial difficulties, Ukraine’s Cabinet of Ministers has agreed to reduce existing green tariffs for solar energy and other renewables in the country, which, at UAH 5 (USD$0.417) per kilowatt hour, has so far been one of the highest in Europe and nearly 25 times the cost of electricity generated by hydroelectric power plants, currently $0.018 per kilowatt hour.

The Ukrainian government now plans to reduce exisiting feed-in tariffs by half to $0.2085.

The state plans have already sparked a backlash from some of Ukraine’s leading solar energy companies. According to Vitaly Daviy, president of the Association of Renewables and Energy of Ukraine, so far, several leading Ukrainian solar power developers, such as VinSolar — part of the Tekt Group, owned by Ukrainian businessman Vadim Grib — and EnergyStream have already filed lawsuits in protest of the state plans.

Daviy adds that other companies may file further lawsuits, including Activ Solar, which is affilated with former Ukrainian Deputy Prime Minister Andriy Klyuyev and which currently operates 570 MW of installed solar power capacity in the country — equal to 87% of the total installed solar power capacity in Ukraine. Active Solar representatives declined to comment.

According to Roman Grib, Tekt’s executive director, despite all the efforts of developers, the tarriff will be reduced in any case due to current political and economic problems in the country and the ongoing military conflict with Russian-backed separatists in eastern Ukraine. This, in turn, may result in sharp losses for both domestic and foreign solar power developers.