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Development of Distributed Generation

Development of Distributed Generation

To make Ukraine's energy system more resilient amidst ongoing russian attacks, the Government is promoting the development of distributed generation—a system of electricity production and transmission consisting of many small, local energy facilities located across Ukraine.

Distributed generation combines various energy sources: gas piston units, gas turbines, solar panels and batteries, wind turbines, and cogeneration. Most importantly, consumers are involved in energy production by installing their own generating facilities.

The Government's goal in developing distributed generation is to provide people and businesses with accessible financial resources to acquire energy equipment and to simplify the procedures regarding construction, commissioning, and connection of generation facilities to the network.

Available Financing Programs

The Government has expanded the "Affordable Loans 5-7-9" program for purchase of energy equipment, introduced new financial support programs for households, homeowners associations, housing cooperatives, and businesses, and established special conditions for public and municipal enterprises.

How to Understand State Financial Instruments for Improving Energy Efficiency and Choose the Right Loan Solution

We offer a short guide to help you understand the most suitable solution for your situation if you wish to achieve energy independence and increase the energy efficiency of your home or business. First, you need to determine who exactly will be the borrower and at what level the decision will be made.

Do you need to install solar panels on a private house? Provide backup power for elevator equipment in a high-rise building? Purchase and commission an industrial generator or gas piston station? Separate programs exist for each option.

In matters of energy efficiency for a private house or apartment, the application and loan will be available for a citizen within the "Household Loans at 0% Interest" program. If the decision concerns an apartment building, you should look into the "GreenDIM" and "Affordable Loans 5-7-9%" programs for homeowners associations and housing cooperatives. For options for energy generation and effective cooperation with the state, review the content of the "Affordable Loans 5-7-9%" program for businesses and the business loan program for over 150 million.

  1. The consumer has identified their needs. What's next? Time to familiarize yourself with the terms of the selected program. You can do this on the website of the Ministry of Energy of Ukraine and on the websites of partner banks. In addition to general information about loan terms, pay attention to the proposed solutions and equipment options. Note that the solution you need may require the purchase of additional equipment that is not included in the list approved for loan provision.
  2. Once you are convinced that the program is suitable for solving your problem, it is time for a preliminary technical consultation. If the solution to your issue is not entirely clear, you lack experience or understanding of the technical characteristics of the required equipment, do not rush to a final decision. At this stage, it is worth carefully studying existing experiences and warnings about the use of appropriate equipment, consulting with a representative of the manufacturer or technical consultant, searching for information about similar solutions online, selecting a potential equipment model, and preparing relevant questions for the sales consultant, technical expert, etc.

!!! Do not neglect this opportunity, as each specific case may have many nuances that will affect the efficiency of the equipment or lead to additional costs or installation work. Important aspects may include the characteristics of the premises, the level of energy efficiency, the materials used for insulation, features of connecting equipment to the network, the presence of grounding, etc.

  1. If, after the preliminary consultation, you are convinced that the proposed financial solution suits you, it is time for the first contact with the banking institution. Familiarize yourself with the list of banks cooperating with the state on targeted programs. Select one or several and inquire about the terms of the loan. Information is usually available on websites. It is also worth discussing the details with a bank representative, who will send information about all terms and answers to your questions via email or messenger.

        !!! Please note that under the conditions of the proposed programs, the banking institutions will provide applicants with details on the interest rate and possible additional costs. The main task of the state is to provide citizens, communities, and businesses with opportunities to solve energy efficiency issues. For this purpose, the state has developed financial instruments and delegated them to banking institutions. Therefore, the Ministry of Energy website offers key details of the programs, but certain issues are resolved by the banks in accordance with legislation and internal regulations. Similarly, the state cannot recommend specific companies or direct consumers toward specific product brands—this remains the citizen’s absolute right after the recommended technical consultation.

  1. The bank provided preliminary information on the programs, the consumer understands the configuration of the equipment requiring financing, and this equipment meets the conditions of the specific program. What's next? Now you can make a request to the selected bank to calculate the details of the future loan. Such a request to most banks can be made by phone. A bank representative can inform you if there are any obstacles to concluding an agreement, answer questions regarding the loan repayment schedule, the list of documents required for the agreement, and schedule a time for signing. The bank employee will also provide you with additional documents and references that may be required by the bank—such as references or information from state registers.

!!! Please note that at this stage, before signing the documents, an additional technical consultation with a specialist, the equipment supplier, and the potential installer is advisable. It is also recommended to contact the seller or manufacturer of the equipment to ensure that it is available for order and will be delivered on time.

  1. You have signed an agreement with the bank, and the equipment has been purchased. Do not delay with its installation and launch. Note that to comply with the agreement and financial conditions, the equipment must be installed within the specified time, and a report must be provided to the bank upon request according to the terms of the financial program.

!!! Discuss this with the bank representative in advance, and make sure you know how much time you have, what reporting is required, and how it should be submitted to the bank. Carefully monitor the entire process of payment, delivery, and installation of equipment to avoid issues and overpayments on the loan.

  1. At any stage of participation in the program, you can contact the government hotline 15-49 STRUM, where specialists will guide you on possible solutions and ways to avoid unacceptable outcomes for the consumer.
  2.  You are the happy owner of equipment that increases energy efficiency and helps the state and fellow citizens save energy resources! Thank you for your cooperation!
  3. Do your neighbors and community face a similar problem and are at the initial stages of solving it? Share your experience! Please provide complete information and use official sources.

Household Loans at 0% Interest

State financial support is provided to individuals who install generating units that produce electricity from alternative sources in their households. Anyone wishing to purchase solar or wind power plants with energy storage systems can receive an interest-free loan—the state fully compensates the interest rate. The loan term is 10 years, and the loan amount is up to 480,000 UAH.

For a loan, you can contact PrivatBank, Oschadbank, Ukrgasbank, Sense Bank, or Globus Bank. The number of program partner banks is increasing, with work ongoing by the Entrepreneurship Development Fund.

Affordable Loans 5-7-9 for Homeowners Associations and Housing Cooperatives

Homeowners associations and housing cooperatives can receive loans up to 5 million UAH for up to 5 years at an interest rate of 7% per year. These funds can be used to purchase and install solar panels, inverters, energy storage systems, and other auxiliary equipment. To use the program, you need to apply to one of the 46 banks that cooperate with the state under the "Affordable Loans 5-7-9" program and submit the required documents specified by the bank.

Banks currently offering these loans include Oschadbank, Bank Vostok, PrivatBank, Sense Bank, Ukrgasbank, Globus Bank, and Sky Bank.

Important! The loan program for homeowners associations and housing cooperatives can be used in conjunction with the "GreenDIM" program.

GreenDIM Program

Homeowners associations or housing cooperative purchases equipment for solar power plants and/or heat pumps, and the state reimburses 70% of the equipment cost. To participate in the program, you need to contact the Energy Efficiency Fund.

Through the program, you can receive:

  • Up to 2 million UAH for installing solar power systems (SES),
  • Up to 2 million UAH for installing heat pumps,
  • Up to 3 million UAH if SES and heat pumps are installed simultaneously.

The document continues to cover additional support and regulations for businesses, details on state incentives, simplified procedures for connecting equipment, and ways for businesses and citizens to stay informed.