Financial Support for the Energy Transition in the Residential Sector

Jakarta, June 9, 2022 – The potential for the use of rooftop PV in the residential sector is one of the largest in accelerating the energy transition and achieving Indonesia’s renewable energy mix target. Appropriate policy instruments and attractive financial support are some of the supporting factors in encouraging the massive adoption of rooftop solar PV in Indonesia.

Andriah Feby Misna, Director of New and Renewable Energy, stated that Indonesia has several national targets, i.e achieving a 23% renewable energy mix by 2025, reducing emissions by 29% with own efforts and 41% with foreign assistance by 2030, and achieving net zero emission by 2060.

“For this reason, the Ministry of Energy and Mineral Resources has developed various strategies such as green RUPTL at PLN and encouraging the use of rooftop solar in the household sector and including them in national strategic programs. As support (on rooftop PV), we issued the Minister Regulation No. 26/2021,” she explained. 

Feby added that the current number of rooftop solar customers is 4,377 households, and there has been significant growth since the issuance of a ministerial regulation that regulates PLN customers who install rooftop PV in 2018.

Feby does not deny that currently there are still barriers in the implementation of the MEMR Regulation No. 26/2021, but she said that her party is currently trying to find a win-win solution so that the regulation can take effect immediately.

In addition to regulations that are still not optimal, another obstacle to the use of rooftop solar in the household sector is the initial investment which is still relatively large for the community. However, there is still a large market potential in the household sector.

Fabby Tumiwa, Executive Director of IESR, explained that based on a gradual market survey conducted by IESR since 2019, the market potential for rooftop solar PV in the residential sector in a some big cities in Indonesia such as Greater Jakarta, Surabaya, Central Java and Bali reached 34 – 116 GW.

“The potential of the energy transition market in the household sector is huge. Those who fall into the category of early followers and early adopters need to be caught. Because they are quite familiar with their products (rooftop PV) and have the intention to install them, but are constrained by a large initial investment,” Fabby explained.

Respondents of the survey expect credit products from banks with a tenor range of 24-48 months with low interest.

Veronika Susanti, Digital Lending Division Head of OCBC NISP bank explained that the renewable energy sector is one of the concerns of the banking sector to obtain funding.

“Currently we have a solar panel financing program with two schemes. First, 0% credit card installments and cash loan for a maximum of 36 months,” said Veronika.

She added that her party was collaborating with solar panel service providers to make it easier for customers to access this rooftop PV financing scheme as well as to learn about technology so that they better understand the risks and opportunities of rooftop PV.

Fendi Gunawan Liem, founder and CEO of SEDAYU Solar also emphasized that the potential for the residential sector to grow and develop is enormous.

“The residential sector is the sector that has the latest solar panel installation regulations, but has the largest customer growth compared to other sectors,” said Fendi.

Banks as financial institutions need to see rooftop solar as a low-risk asset, for that it is necessary to study rooftop solar power technology so that they can make accurate risk analysis. Thus, banks can design more friendly credit schemes with more diverse tenors and lower interest rates.

Striving an Early Literacy on Energy Transition

South Tangerang, May 23rd, 2022 – The energy transition is a global agenda whose impact will be felt in the medium-long term. Conducting research, agreement, and policy formulation are various efforts to urge stakeholders to take action in the “present days” that are expected to have an impact on the near future. Of course, in the long term, a fair & just energy transition must be encouraged and implemented to mitigate climate change.

However, have we ever thought that in the future, who will be most affected by the implementation of the energy transition? Of course, the younger generation. Thus, it is only fair to teach them from an early age to understand the concept of the energy transition. Because, in the future, policymakers in 2060, the year Indonesia targets to achieve net-zero emissions, are currently still in school.

As a concrete effort based on this understanding, the Clean, Affordable, and Secure Energy for Southeast Asia (CASE) project in Indonesia held an activity entitled “Teaching for Future” which was held at Santa Ursula School BSD, specifically for Class IX students. In this activity, CASE seeks to instill an energy transition mindset by initiating discussions and active teaching and learning activities involving students from Santa Ursula School BSD.

This activity done by CASE is in line with the efforts of Santa Ursula BSD School in instilling understanding and education about climate change from an early age as conveyed by Mrs. Irene Rosmawati, the Principal of Santa Ursula BSD School.

“Santa Ursula School actively and systematically provides teaching and learning activities related to climate change and renewable energy issues. It is hoped that students will have an understanding as to the initial capital for their real actions in the future.”

During the Teaching for the Future activity, CASE invited George Hadi Santoso, Vice President of Xurya Daya Indonesia, a company that provides installation and procurement services for rooftop solar panel systems, to directly attend the session and discuss with students of Santa Ursula School.

“I especially appreciate Santa Ursula BSD School and CASE Project who initiated this activity in an effort to support the energy transition process in the long term. I really hope that my presence here can be an inspiration for these youngsters in choosing a career in green jobs in the future,” said George, opening the discussion session in class.

Santa Ursula BSD School is a school that has taken the initiative and is in the process of installing a rooftop Solar Power Plant (PLTS) with a capacity of at least more than 1 Megawatt peak (MWp). CASE Indonesia sees this initiative as a concrete action for schools to support the energy transition in Indonesia. In addition, CASE Indonesia hopes that this initiative can become a real example for students regarding the use of renewable energy and how non-governmental actors can play a role in supporting the energy transition. Coming from the same spirit (real action against climate change), CASE and Xurya also invite students to understand other things that can be done at their age to support the energy transition, such as energy-saving habits.

An interesting finding during the activity was conveyed by Agus Praditya Tampubolon, CASE Program Manager from IESR.

“It is very interesting how junior high school students can think further about the implementation of renewable energy, for example, we were asked about the risk of dependence on imported solar panels if Indonesia uses solar energy intensively. Findings like this, that students can think ahead and beyond, we hope, will be a good sign for Indonesia’s energy transition efforts in the future,” Agus explained at the end of the event.