What to expect in the solar energy market

In recent years, the solar energy industry has been developing at a dynamic pace. The reasons for this are the problems in the industry caused by the shelling of Russia and people’s desire to ensure energy independence for their homes or businesses and not depend on schedules. The boom is also facilitated by support from the government and international institutions in the form of grants or soft loans aimed at developing green energy.

For many Ukrainians, solar energy is no longer something as complicated as it was a few years ago. You can see more and more solar panels on the roofs of houses. People realize that this is not a luxury, but real energy independence.

The volume of solar generation in Ukraine is still relatively low compared to the EU or the US, but the development is evident and will continue. What will the solar energy market in Ukraine look like in 2025?

Increasing the share of decentralized system
The development of a decentralized energy system is not only beneficial for households and businesses, but also for the Ukrainian energy system as a whole. A report by the International Energy Agency (IEA) states that the development of solar energy technologies is one of the main factors that will help Ukraine promote energy security in the short and long term.

What is a decentralized system of electricity production and consumption? These are any generation facilities that have a solar power plant and an energy storage facility. This means that consumers can use electricity not only for their needs when there is active solar generation during the day, but also when there is no generation – in cloudy weather or at night. In this way, they can provide themselves with electricity, reduce dependence on the centralized power grid, and sell excess kilowatts.

In 2024, the number of consumers and businesses that generated and sold electricity to the grid increased significantly. This trend will continue in 2025, which will significantly support the country’s centralized energy system.

Using AI in the Solar Energy Industry
The solar industry is no exception in implementing AI-based solutions. There are already services that provide forecasts of energy production for power plant owners based on location, weather, and SPP features. Such solutions allow analyzing the actual and predicted amount of energy generated, identifying and fixing problems with equipment or settings.

For example, Forecast.Solar is used worldwide and in Ukraine (especially in the capital). The service is based on meteorological data, the location of the solar power plant, its orientation, and the angle of the panels. Based on this data, the plant owner receives information about how many kilowatts the solar power plant will generate over a certain period of time.

Demand for the construction of stations is growing
Before the power outages, the vast majority of users chose grid-tied solar stations, those that immediately transfer the watts produced to the grid. Now people want to have a reserve of electricity to use during blackouts.
Market pricing with hourly variation in the cost of electricity is another good reason to buy the plants. During periods of active generation, i.e. during the day, the price per kilowatt is lower. It is more profitable for users to accumulate electricity and feed it into the grid in the evening or in the morning, when consumption is higher and the price is higher.

This is especially true for large facilities, such as industrial solar power plants. It is beneficial for them to install energy storage units because this way they balance the market and sell electricity more efficiently.

Businesses need energy storage facilities because they ensure continuity of production, especially at large enterprises. Even if the power goes out for a short time, the equipment has to be restarted. Before the Great War, producers sold electricity at a “green” tariff, which was fixed. Now the conditions have changed. The feed-in tariff rate is being reduced by 10% every year, and the program will cease to operate on January 1, 2030. As a result, the demand for solar power plants with electricity storage facilities is growing.

Buying and selling electricity through the self-generation mechanism
Net Billing is a system whereby the owner of an alternative energy source can sell the excess kilowatts produced to the general grid. Excess electricity that an active consumer is willing to sell is metered and fed into the grid. The consumer receives a monthly payment for the electricity sold.

To use net-billing, you need to enter into a self-generation electricity purchase and sale agreement with a universal service provider (USP). It is also possible for certain categories of consumers to conclude an agreement with a separate electricity supplier. In this case, electricity will be sold under the terms and prices specified in the agreement.

This is a convenient and popular mechanism, so we can expect the relevant legislation to be improved in 2025.

Read more about the self-production mechanism here.

Return of ESG
ESG (environmental, social, governance) is a well-established principle for European countries that has been followed for years. In Ukraine, after the signing of the Association Agreement with the EU, companies have been developing this area in small steps, conducting activities and trainings to raise environmental awareness among citizens.

However, the great war reasonably changed priorities and the environment faded from the forefront. In 2025, this area will gradually begin to return to the agenda, as solar energy is primarily green energy, and it is necessary to take into account how much Ukraine’s environment has suffered as a result of the war.

The industry’s impact on the social sphere will be more noticeable: solar energy requires a large number of specialists that the labor market cannot provide. Companies are ready to train specialists, initiate retraining courses and programs, cooperate with educational institutions, and create training programs.

For example, the iSolar team, together with a vocational school, trains solar power plant installers. The company has developed and implemented a retraining program for veterans, plans to open the iSolar Academy and train more people who want to work in the industry and strengthen our country’s energy independence.

The spread of automated SPPs
These are SPPs that combine solar panels, storage facilities, and a system that analyzes what time of day is more profitable to sell the stored energy. Such systems estimate the amount of energy stored and the hours of its sale. This allows for the most profitable sale of kilowatts without human intervention in the process.Innovative solutions will also be more widely used in 2025: solar panels that automatically turn with the sun, balcony panels, and even houses with the facade completely covered with solar modules.Continued support for the industry
One of the reasons for the intensive development of the industry is numerous support programs. One of them, the Grindim program from the Energy Efficiency Fund, was launched in 2024. Thanks to it, condominiums can install a solar power plant in a building and have electricity to run elevators, pumps, or heating during power outages.

Many banks cooperate with the EBRD on loan, cashback, and grant programs. Businesses can reimburse up to 20% of the cost of implementing green energy projects. In 2025, the EBRD plans to provide cashback of 15-25% on energy-efficient loans for individuals and expand sectoral programs.

Increase in the number of SPPs and generation volumes
In 2025, the number of SPPs in Ukraine will increase dynamically, although the global trend suggests the opposite. However, the situation in the EU or the US is significantly different. The solar energy sector in these countries started developing earlier, so there are many times more generation facilities there than in Ukraine. For example, in 2023, the share of renewable energy use in Romania was 25.2%, while in Ukraine it was 5.4%.

In our country, the solar energy industry has enormous potential. We are only at the beginning of the path to greater use of green energy, which is especially necessary for achieving energy independence, maintaining energy security, opening new job opportunities in the labor market and sustainable development of the country.