With a new decree, the Indonesian Ministry of Energy and Mineral Resources has enabled the owners of residential, commercial and industrial rooftop PV systems to sell excess power to the grid. The government hopes the new provisions will result in around 1 GW of deployed PV capacity over the next three years. Doubts, however, have been raised about the attractiveness of the scheme.
Indonesia’s Ministry of Energy and Mineral Resources has issued Ministerial Decree n. 49/2018 which ensures residential, commercial and industrial PV installations are entitled to sell excess power to the grid under a net metering scheme.
The government says the new provisions will drive the installation of around 1 GW of PV systems in the country over the next three years, and savings of up to 30% on energy bills for PV system owners. The government said the new rules are intended to favor PV installation with a high self-consumption rate, and only a minimum amount of the electricity generated will be sold to utility Perusahaan Listrik Negara.
However the director of Indonesia’s Institute for Essential Services Reform, Fabby Tumiwa, told the Kontan newspaper the new rules are not attractive enough to increase volumes, as the tariff at which excess power will be sold is too low, and amounts to an investment return of only 11 to 12 years. Mr. Tumiwa told the newspaper, savings of up to 30% would amount to an investment return of seven years or less.
Indonesia is also supporting large-scale PV, through a law issued in April 2017. A number of large solar projects have been announced over the past two years, in a country that had only 80 MW of installed capacity by the end of 2016, according to the International Renewable Energy Agency.
The government of Indonesia – and the Asian Development Bank – are implementing a micro and mini-grid program for the island nation’s less electrified areas.
Indonesia wants to increase its share of renewable energies from around 14% currently, to 23% by 2025. That goal will require 14.9 GW of additional renewable energy capacity. The country has an installed power generation capacity of around 62 GW, of which only 8.5 GW comes from renewable energy sources.