Solar energy development in households: ways to improve state policy in Ukraine and Latvia

ABSTRACT The paper investigates state policy to promote solar energy in Latvia’s and Ukraine’s households. Comparing different approaches to stimulating sectors’ development in both countries, the article evaluates the economic efficiency of solar power plants implementation based on the Levelized Cost of Electricity method and investment projects payback periods. The calculations were performed for solar power plants installed capacities ranging from 1 to 30 kW. The results revealed the fundamental differences in solar energy advancement due to the existing support mechanisms in the countries. While high feed-in tariff rates contribute to the rapid deployment of solar power plants in Ukraine’s, Latvia’s net-metering system hinders solar energy development in households. The research forms recommendations for improving policy by adjusting Ukrainian feed-in tariffs to trends in reducing solar energy costs, introducing solar energy in the Mandatory Procurement Component for Latvia, and applying preferential public financing to solar power plants construction in both states. Highlights State policy to promote solar energy in Ukraine’s and Latvia’s homes is analyzed The economic efficiency of small solar power plants is estimated for both countries Feed-in tariff in Ukraine ensures a quick payback period for solar power projects Net metering in Latvia does not provide investment attractiveness of solar plants Both countries need energy policy changes for balanced solar power development