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Hitting Record-Low Solar Electricity Prices in Indonesia

Utility-scale solar procurement in Indonesia so far has been carried out sporadically, without clear scheduling, using individual one-off auctions (tenders). Not to mention the lack of auctioned projects between 2017–2020 to begin with, the procurement practices are somewhat opaque and not yet standardized, making the negotiation process lengthy and may shun potential investors away. This situation calls for a reform in utility-scale solar procurement practices by PLN, and the government more broadly, to really benefit from the “price discovery” effect (revealing record-low solar electricity prices as have been seen in many countries) and to realize said ambition by conducting systematic and well designed utility-scale solar auctions. Through this study, we hope to offer insights into some of the best practices in utility-scale solar auction design from several countries that have successfully done lessons for Indonesia in order to propel massive solar growth in Indonesia.

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