Energy Conscious: How Ukraine is promoting energy independence

What's the problem?

Ukraine's energy infrastructure has been one of Russia's primary targets in its large-scale bombardments. Between October 2022 and September 2024, Russian forces carried out 1,024 attacks on Ukraine's energy facilities, according to Energy Minister Herman Halushchenko. One of the worst missile attacks came on August 26, 2024, when Russia launched 236 drones and missiles in a single strike.

"There isn't a single place, a single region, or a single type of energy infrastructure that hasn't been hit," Minister Halushchenko said. "Since March 22 of this year, we've lost over 9 gigawatts of capacity due to these attacks. Another 18 gigawatts of generation remains under occupation, including hydroelectric plants, thermal power stations, and the Zaporizhzhia Nuclear Power Plant, the largest in Europe."

Ukrainian Energy Minister Herman Halushchenko. Photo: Ministry of Energy of Ukraine

The energy ministry calls 2024 the most challenging year for Ukraine's power grid since the full-scale war began. Over the past year, Russia has launched 13 large-scale attacks on energy infrastructure, using new tactics, ballistic missiles, and cluster munitions. The result? Another 10 gigawatts of lost generation capacity — a devastating blow to an already strained system.

What's the solution?

Ukraine needs to rebuild its energy system, but not how it was when the country inherited it from the Soviet Union. Instead of relying on the old, centralized model, where most electricity is generated at massive power plants, Ukraine needs a decentralized system. The electricity will be produced closer to where it's consumed on smaller installations like solar panels, wind turbines, and gas-powered generators. With this approach, some consumers can even become energy producers themselves.

This model has several advantages over Ukraine´s current energy system. First, it reduces electricity losses during transmission. Before the full-scale invasion, one out of every ten kilowatt-hours was lost in the grid. Second, protecting massive thermal, hydro, or nuclear power plants from attacks is nearly impossible. However, destroying every solar panel or gas-powered generator installed by businesses and public institutions is much more complicated.

As of December 3, 2024, Ukraine had 967 megawatts of distributed gas generation connected to the grid, with 835 megawatts installed in 2024 alone. According to the Ministry of Energy, another 900 megawatts will be added by the end of the 2024–2025 heating season. Some projects are almost completed.

The government has also launched the Energy Conscious initiative, a package of energy resilience programs. These include soft loans for individuals, homeowners' associations, and businesses, helping them purchase equipment to generate or store their own electricity. This isn't just about keeping the lights on during outages. It's also an opportunity to sell surplus energy back to the state and make a profit.

Illustrative photo. Photo: Ukrhydroenergo

Next, we'll break down the available loan programs, who can apply, and what the funding can be used for.

How does it work?

Ukrainians can apply for a soft loan through the Business Development Fund to purchase and install solar panels or wind turbines with a capacity of 1 to 10 kW, equipped with hybrid inverters. The loan can also cover energy storage systems with a capacity of at least 1 kWh per 1 kW of installed generation power.

Homeowners with properties up to 300 square meters can receive up to UAH 480,000 for 10 years at 0% interest. To apply, they need to submit a request to an authorized bank along with a package of documents, including:

• A cost estimate from the contractor detailing the expenses for purchasing and installing the hybrid power system (without itemized breakdowns of work types, deadlines, etc.).
• Written consent from the homeowner or co-owner to install the hybrid energy system.
• Extra documents, required by the bank and following the fund's regulations on document format and information disclosure.

Once the application is submitted, the applicant must sign a loan agreement with the bank. The bank then directly transfers the funds to suppliers or contractors responsible for the equipment, services, or installation. Who can't apply:

• Russian citizens, except those with legal residence in Ukraine.
• Individuals under sanctions.
• Persons convicted of crimes against Ukraine's national security.
• Individuals whose income in the past six months exceeded ten times the national average salary.

Members of housing cooperatives (apartment owner associations) and building cooperatives (cooperative housing corporations) can apply for programs on the Energy Conscious initiative's portal, particularly the GreenDIM program.

Any cooperative in Ukraine is eligible, except those in Russian-occupied territories or active combat zones. However, apartment buildings that haven't officially registered as cooperatives cannot apply.

The GreenDIM program helps cover the cost of installing solar power systems, heat pumps, and related equipment. It offers grants covering up to 70% of the cost of solar power or heat pump installations, with a maximum of UAH 2 million. Cooperatives can receive a separate grant to cover energy efficiency certification, which funds 70% of certification costs, up to UAH 15,000.

Cooperatives must follow these steps:

• Hold a general meeting of apartment owners and vote to participate in the program.
• Obtain an energy efficiency certificate for the building.
• Choose a partner bank and open an account to receive the grant.
• Submit Application No. 1 along with supporting documents to the Energy Efficiency Fund.
• Purchase the equipment, hire a contractor, and complete the installation.
• Undergo a second energy efficiency certification after the equipment is installed.
• Submit Application No. 2 with supporting documents to the Energy Efficiency Fund.
• Within 15 business days of approval, receive the grant from the partner bank.

Illustrative image. Photo: Ukrainian Energy

Business owners can apply for two financing programs through the Energy Conscious portal: 5-7-9% Loans and Preferential Loans from the Decarbonization Fund of Ukraine.

The 5-7-9% Loans program is available to small and medium-sized enterprises (SMEs). Eligible businesses can borrow up to UAH 150 million for up to 10 years. Depending on the loan, the interest rate is either 7% or 9%. However, businesses that create new jobs can lower the interest rate by 0.5% for each new employee they hire.

Businesses need to apply to an authorized bank and submit the required documents, including a business plan for their investment project. After that, they'll sign a loan agreement with the bank. The bank will transfer the funds directly to the company's suppliers, covering purchases, services, or contracted work.

The program does not accept applications from:

• Businesses owned or partially owned by citizens of countries recognized by Ukraine as aggressors or occupiers.
• Companies registered in temporarily occupied territories or active combat zones.
• Businesses that have received more than €200,000 in state aid (except for agricultural enterprises).
• Financial institutions, including credit, insurance, investment firms, and pawnshops.
• Producers or sellers of weapons, alcohol, tobacco (except small and medium-sized businesses in the food service industry), and currency exchange businesses.
• Real estate leasing companies.
• Businesses that have declared bankruptcy or are undergoing bankruptcy proceedings.
• Businesses with outstanding debts to the state budget or social security funds.

Business owners can also apply for the Soft Loans program through the Decarbonization Fund of Ukraine. This program is open to sole proprietors, private companies, municipal enterprises, and state-owned enterprises. However, it's not available to businesses with ties to the aggressor country or terrorist organizations, those registered or operating in occupied territories or combat zones, or companies that have been in operation for less than one year.

Eligible businesses can receive loans from UAH 120,000 to UAH 25 million for up to 10 years. The standard interest rate is up to 9% per year, but it can be reduced by 2% if the project uses at least 70% Ukrainian-made equipment. The borrower must contribute at least 15% of the project or equipment cost as a minimum investment. Steps to enter the program:

• Apply the required documents to the Decarbonization Fund of Ukraine. The documents should include company registration papers, financial reports, and project details. Submit in person at 60 Sichovykh Striltsiv St., Office 323, Kyiv, Ukraine, or by email at [email protected] with a certified electronic signature.
• The fund will review and send the documents to the State Agency of Energy Efficiency. A commission there will assess the project and provide a preliminary decision on whether it is eligible for state support.
• If approved, the fund will confirm the loan.
• Applicant then signs a Voluntary Agreement on Decarbonization and Energy Efficiency with the energy efficiency agency.
• The fund will sign a loan agreement and release the loan funds.
• The review process takes 2–3 weeks after all documents are submitted. Once your application is approved, the applicant has 45 days to secure funding for their project.
• The fund will track its use, ensure the project is completed as planned, and monitor the achievement of the energy-saving and decarbonization goals outlined in the agreement.