ISEO 2023 Launch: Indonesia Needs Clear Targets and Effective Implementation to Develop Solar Energy

Jakarta, 27 October 2022 – The Institute for Essential Services Reform (IESR) launched the Indonesia Solar Energy Outlook 2023 report. This report was originally part of the Indonesia Energy Transition Outlook (IETO) which has been routinely published every year since 2018. Starting this year, the solar energy section is made in a separate report to provide a more in-depth report on the development of solar energy in Indonesia and the supporting ecosystems that solar energy needs to grow in Indonesia.

Fabby Tumiwa, Executive Director of IESR, in his remarks at the Shine Bright: Advancing G20 Solar Leadership event organized by IESR with the support of Bloomberg Philanthropies, and in collaboration with the International Solar Alliance, and the Indonesian Solar Energy Association, stated that solar energy prices remain competitive despite the existence of increase in the price of raw materials for the manufacture of solar panels. Fabby also emphasized the importance of developing the solar industry for both Indonesia and all G20 countries which are in the spotlight in efforts to reduce global emissions.

“Developing cooperation in solar manufacturing among G20 countries will secure the supply of solar module and cell production, balance systems to meet future demand, and reduce product monopolies.”

On the same occasion, the Minister of Energy and Mineral Resources, Arifin Tasrif, emphasized the need for support from the industry and local solar module manufacturers to meet the requirements for the Local Content Requirement (LCR) considering that Indonesia has mineral materials to make solar modules and batteries.

“Easy access to financing, incentives, and other financing facilities is very important to provide the cost of a feasibility study and increase investment in renewable energy, one of which is solar,” said Arifin.

Ajay Mathur, Director General of the International Solar Alliance, said that to make solar energy the energy of choice, three things that must be taken as strategic steps. First, providing the latest information, analysis, advocacy, and establishing relationships with various parties. Second, providing adequate resources so that solar energy investments ‘flow’ is important because investors will assess and weigh various situations that can affect the return on their investment capital.

“ISA approved the creation of a solar energy financing facility that provides risk capital guarantees,” explained Ajay.

Ajay added, the third step, it is important to build the capacity and capability of various parties who handle the development of solar energy such as policymakers, operators, and regulators.

Daniel Kurniawan, the lead author of the Indonesia Solar Energy Outlook 2023 report, presented some findings from this report. One of them is that although solar energy is getting more and more attention until Q3 2022 only 0.2 GWp of solar has been built.

“Based on the 2021-2030 RUPTL, PLN plans to add 3.9 GW of solar energy in 2025, of which 2.45 GW will be procured under the IPP scheme and 1.45 GW will be auctioned directly by PLN. However, until Q3 2022 there are only eight IPP projects with a capacity of 585 MWp,” explained Daniel.

Presidential Decree number 112/2022 which was issued in September 2022 is expected to provide fresh air for the energy transition in Indonesia, at least with regulations on renewable energy prices and instructions to accelerate the termination of coal-fired power plants.

To encourage the acceleration of the use of solar energy, the ISEO 2023 report recommends some steps, including PLN which can arrange a schedule for renewable energy auctions, especially solar for 2023. Previously, the government had to set ambitious and binding targets for renewable energy in certain years, for example 30% in 2025-2030, 90% in 2040, and 100% in 2050. With a target like this PLN must make room for solar energy in the PLN network.

“The IEA analysis shows that the Java-Bali and Sumatra systems can accommodate 10% of solar energy from their total capacity with flexible PLTU operations,” explained Daniel.

Although the system is technically capable of handling solar energy variability, the main challenge in realizing greater solar penetration is contractual inflexibility (particularly due to the take-or-pay clause in the coal plants power purchase agreement with the IPP as well as the primary energy supply contract for gas).

Daniel also added, considering the readiness of the domestic solar manufacturing industry, the percentage of Local Content Requirement (LCR) needs to be adjusted for a limited time, for example until 2025. While preparing the domestic manufacturing industry for decarbonization.

Finally, ISEO 2023 also recommends that PLN review the policy on limiting the installation of rooftop solar PV.

Henriette Faergemann, Environment, Climate Action EU Delegates to Indonesia and Brunei Darussalam, stated that it is important to create an ambitious and consistent energy transition policy to provide a strong signal to investors and financial institutions so that they are interested in participating in financing the energy transition.

“There is good progress for Indonesia in formulating its policies, but there are still many things that need to be done and improved if Indonesia wants this (energy transition) to happen quickly,” Henriette explained.

Joshua Wyclife, Chief of Operations International Solar Alliance, agrees that structural change is needed and this change starts with policy. Joshua also stated that this ISEO report is one way to increase awareness for various parties about the current situation of solar energy development in Indonesia.

“One way to maximize solar potential in Indonesia is to increase the level from awareness to advocacy, by various parties through various ways such as workshops, facilitating training programs with existing resources,” said Joshua.

Meanwhile, Rahmat Mardiana, Director of Electricity, Telecommunications, and Information at the National Planning Agency (Bappenas), stated that this report would be studied further considering that Bappenas is currently preparing national development planning documents such as the RPJP and RPJM, one of which is about the energy transition strategy.

“With our commitment to achieve the RUEN, Paris Agreement, and NZE targets, of course we must provide reliable electricity at affordable prices, and gradually fossil power plants will be replaced by renewable energy,” explained Rahmat.

Dewanto, Vice President of Various Energy PLN, said that PLN continues to support the development of renewable energy.

“The Business Plan (RUPTL) is a tangible manifestation of PLN’s support for new and renewable energy. According to the RUPTL, until early 2023 PLN will auction almost 1 GW of renewable projects,” Dewanto said.

ISEO 2023 Launch: Encourage The Use of Solar Energy in Indonesia

Jakarta, October 27, 2022 – The use of solar energy in Indonesia needs to be accelerated. Clear rules, support for the solar PV component production industry, and capacity building in response to human resources needs in the solar energy sector also need to be prepared.

According to data from Indonesia Solar Energy Outlook (ISEO) 2023, the installed capacity of Solar PV has increased from 43.9 MWp in 2021 to 63.5 MWp in September 2022. This number is relatively small compared to other ASEAN countries, especially Vietnam, which already belongs to the Gigawatt order.

Senda Hurmuzan Kanam, Chair of Electrical Survey and Testing Center, MEMR, measures that the installed capacity of PLTS in Indonesia is still in its early stages, around 200 MW-400 MW. He stated that Indonesia needs a closer look at Vietnam, which can install about 10 – 20 GW of solar panels annually.

“Compared to Vietnam, Indonesia is far behind. We need to look for demand opportunities for renewable energy, especially solar PV. Currently, we have an incentive program for rooftop solar systems under a Sustainable Energy Fund (SEF) grant to attract more electricity consumers to use rooftop PV mini-grid,” Senda said at the Advancing G20 Solar Leadership event and the launch of the ISEO 2023 report organized by the Institute for Essential Services Reform (IESR) with support from Bloomberg Philanthropies, and in collaboration with the International Solar Alliance, and the Indonesian Solar Energy Association.

Similarly, a member of the National Energy Council (DEN), Herman Darnel Ibrahim, mentioned that solar energy development in Indonesia is still running slowly and relatively stagnant. He argues that Indonesia needed a more transparent plan to achieve the target of 23% of the renewable energy mix by 2025 by utilizing solar power.

“At least the Electricity Supply Business Plan (RUPTL) needs to show the solar energy program, all renewable energy clearly, and mention its potential locations. Currently, the existing RUPTL only discusses all renewable energy nationally and does not mention its possible areas in detail. Moreover, the government can calculate the new economy by location and network costs. So it’s better to build a resource inventory first,” Herman stated.

Although there are several challenges to accelerating solar energy, Andhika Prastawa, Chairman of the Indonesian Solar Energy Association (AESI), said solar panel production continues to grow under certain conditions. For example, Indonesia provides a clear incentive for consumers to use domestic solar panels rather than abroad. In addition, Andhika stated that there are two ecosystems to accelerate solar energy: the utilization ecosystem and the industrial ecosystem. 

“Ecosystem utilization, namely solar power, can be used in large or isolated systems. So we can extend access to electricity to all rural communities in the country. Then, the growth of this industrial ecosystem is closely related to its utilization ecosystem. To grow the industrial ecosystem, a market that can absorb solar modules is needed,” Andhika explained.

Meanwhile, Anthony Utomo, Deputy Chairperson of the Indonesian Solar Energy Association (AESI), explained that solar PV is necessary because of the decarbonization movement and the net zero emissions (NZE) approach. However, there are several challenges to intensifying solar energy.

“There are two challenges facing Indonesia. The user’s (customers) readiness to use solar PV, so we need consistent and massive education. It aligns with the National Energy Master Plan (RUEN) 2017, which became a shared consensus. It mandates a reduction in energy intensity, containing 30% of government buildings being encouraged to use solar PV, 25% luxury homes, and industrial downstream. Second, the competencies of solar PVinstallation personnel to develop the electrical system installation of the solar power plant. There is a need to provide solar preneurs or green MSMEs so that they can welcome the phenomenon of using rooftop solar PV in all regions, ” Anthony said.

The Institute for Essential Services Reform has consistently noted the progress and challenges of developing solar energy in the energy transition framework in the Indonesia Energy Transition Outlook (IETO). However, in 2023, IESR launched a progress report on solar power in Indonesia separately in the Indonesia Solar Energy Outlook (ISEO) 2023.

Seeing the Opportunities and Challenges of the Decentralized Energy Transition

Bali, 30 August 2022 – Local governments and communities can be the catalyst for accelerating the energy transition. The decentralized energy transition requires a relatively shorter time because it is carried out on a small scale and the impact can be directly felt and seen by the community.

Ganjar Pranowo, Governor of Central Java, in the G20 parallel seminar “Decentralizing energy transition: Advancing the role of the community and subnational government” (30/8), that in the context of developing renewable energy, asymmetric decentralization is needed, which means that each local government is given sufficient space to design the development of renewable energy according to the potential and situation of the region.

“The potential for energy independence in these villages, from a business perspective, is not good because the scale is relatively small for a business scale, but if we don’t make examples such as installing 20 kWp solar PV for 8 MSMEs in Jepara, off grid solar PV for water pumps, or micro-hydro with a capacity of 15 kWp that electrifies 75 households, by really utilizing the potential that exists locally, it will not be realized, so we need the courage to change,” said Ganjar.

Ida Ayu Giriantari, Special Staff for the Governor of Bali, stated that the community, especially the Balinese, have a high enough awareness to protect the environment and switch to more environmentally friendly energy sources.

“Clean energy has been the foundation of Bali’s life and vision for development since the beginning and was stated in Pergub 45/2019, when the central government made clean energy policies nationally, we felt that there was support from the central government,” he said.

In March 2022, the Governor of Bali issued a circular letter for government offices and tourism buildings to install rooftop solar. This is one of the ways to pursue Bali’s target of achieving carbon neutral status by 2045.

“With the cooperation of all stakeholders and the community, I am optimistic that we can achieve Bali Net Zero Emission 2045,” said Ida Ayu.

Passed by the Batang Hari river, Jambi province began to introduce the use of renewable energy in the 2000s including hydropower, wind (Tanjung Barat and Timur), and solar.

“Currently we are preparing an integrated energy consumption assistance program for kitchens and households, or what we call the Boenda program. We will launch it soon,” explained Abdullah Sani, Deputy Governor of Jambi at the same event.

Sani continued that the Jambi provincial government is committed to working with the central government and the private sector to develop energy transition because the available resources are considered abundant but still need to transform them into usable energy.

Bob Saril, Director of Commerce and Customer Management of PT PLN stated that his party as an electricity provider in Indonesia has designed an energy transition scheme through the RUPTL (General Plan for the Provision of Electricity) based on renewable energy.

“In the current RUPTL, the share of renewable energy reaches 52%, this is the first step in the transition we are planning. That after 2022, we will no longer add new coal commitments,” said Bob.

Chrisnawan Anditya, Head of the Planning Bureau of the Ministry of Energy and Mineral Resources, stated that the differences in NRE potential in various regions are a technical challenge as well as a great opportunity for our energy system.

“This allows the sharing of NRE-based energy, when the area experiences energy abundance or scarcity. In order for this to happen, an integrated power system is needed (SmartGrid and SuperGrid),” explained Chrisnawan.

The energy sector is expected to become a major emission contributor if not taken seriously. Togap Simangunsong, Expert Staff to the Minister of Home Affairs for Social Affairs and Inter-Agency Relations, the Ministry of Home Affairs, explained that his party continues to monitor the provinces in drafting the RUED (Regional Energy General Plan) as a derivative of the National Energy General Plan (RUEN).

“27 out of 34 provinces already have Regional Regulations on RUED and a number of provinces are still in the process with various progress for the preparation of their RUED,” said Togap.

Fabby Tumiwa, Executive Director of IESR reminded regional leaders to align the RUED with the RPJMD so that the policies made are in line so that their implementation can run smoothly. He also emphasized the importance of community participation in energy transition initiatives in the regions

“The community can participate in investing in renewable energy by installing rooftop solar panels in their respective homes. Local governments can also contribute by allocating budgets to this sector. If domestic investment grows well, foreign investment will be more interested to chip in, ” explained Fabby.

Energy Transition: From, By, and For the Society

Denpasar, August 11th, 2022 – The involvement of the wider community has a very important role in realizing the energy transition agenda. One of the initial steps is to provide a forum for sharing knowledge and discussion. In contrast to formal discussions targeting stakeholders, discussions with an informal, light, and entertaining format for the community are believed to be more effective. This is expected to be a comfortable space for the public to express their opinions openly.

Based on this understanding, the Clean, Affordable, and Secure Energy for Southeast Asia (CASE) project in Indonesia held an activity entitled “The Role of Public Participation in Energy Transition” which was carried out in Denpasar with representatives of civil society organizations, youth groups, and students in Bali. In this activity, CASE seeks to provide a forum for discussion as well as exchanging ideas and knowledge related to the topic of energy transition in Indonesia, especially in the context of Bali.

To facilitate the Balinese people in understanding the context of the energy transition, CASE Indonesia also presented various local expert speakers who explained various aspects of the energy transition and its relation to the people in Bali. For example, how renewable energy can be utilized, accessed, and have a positive impact on various levels of society in Bali.

Various policies to realize the energy transition has been issued in Indonesia. Especially in Bali, the Provincial Government of Bali has shown a positive response and supports the energy transition with clean energy policies which are expected to support the economic development of the Balinese people. However, these various policies will not be of much use if the community does not take part in the success of the plan.

“All the involvement of various community groups in Bali is important so that the energy transition becomes doable and not only in the form of policies on paper,” said Ida Ayu Dwi Giriantari from the Center of Excellence Community Based Renewable Energy – Udayana University.

People in Bali depend on the tourism sector for their livelihoods to support their economy. CASE seeks to introduce real examples of tourism business units owned by indigenous Balinese people who have utilized renewable energy so that people can witness the impact of renewable energy in a business at the community level.

Present on this occasion, Putu Swantara Putra, often called Bli Klick, an architect and entrepreneur in the hospitality sector in Bali, tells his experience using renewable energy.

“There is nothing to lose in utilizing renewable energy (rooftop solar panels), with the various financing schemes that exist now, for us entrepreneurs, it feels the same as paying for PLN electricity. Imagine, the difference is that I have made a difference and are more environmentally friendly, even more so in a few years the tools are mine and I can use them for free.”

Similar to Bli Klick’s statement, Dayu Maharatni from the Amoghassiddhi Cooperative said that the potential for financing rooftop solar power plants is interesting to observe. The Amoghassiddhi Cooperative is a community-based cooperative financing institution that provides a financing scheme for installing solar panels for its members.

“There is already a regulation that regulates us, the cooperatives, to provide an interest rate of no more than 1%. With this, we hope that more of our cooperative members are interested in developing their businesses with renewable energy. In our cooperatives, energy credit financing is only 2.4% compared to other types of financing. This means that there is still a lot of development potential (for renewable energy financing) for our members.”

Dayu invites the public to understand that currently the potential for developing renewable energy is still very wide and has many benefits for the people in Bali. Furthermore, not only from the point of view of climate change mitigation but the development of renewable energy is also considered to have potential as a career choice (green jobs) and the community’s economy in the future.

“Later on, the human resources needed in the development of renewable energy will be needed in every business process, for example, researchers, planners, operators, evaluators, and so on. Based on this data, if it is developed according to the development map, the Government estimates that by 2050, at least thousands of workers will be absorbed in this renewable energy sector,” said I Gusti Ngurah Agung Dwijaya Saputra from the Bali State Polytechnic closing the presentation session.

Jateng Solar Series – Green Healthcare Forum: Central Java Encourages Solar PV Adoption in Health Facilities

Jakarta, 26 April 2022- The Ministry of Health through The Directorate of Health Service Facilities, Directorate General of Health Services has issued Guidelines for Environmentally Friendly Hospitals (Green Hospitals) in Indonesia in 2018. Central Java has a high potential power output for solar energy. To that end, the development of policies, benefits, and financing schemes for rooftop solar power plants available for health facilities are discussed in the “Rooftop Solar Energy for Health Facilities Sector” Webinar. This activity was held in collaboration with the MEMR of Central Java Province and IESR which took place online.

Opening the discussion, Mustaba Ari Suryoko, Coordinator of Various NRE Services and Business Supervision, Directorate General of EBTKE, Ministry of Energy and Mineral Resources stated that Indonesia has at least 3 targets, namely 23% renewable energy in 2025, emission reduction in 2030, and net zero emission in 2060. According to him, The target for penetration of renewable energy, especially rooftop solar power plants, which is 3.6 GW until 2025 is quite high, but its implementation is still minimal. 

Several efforts have been made by the Ministry of Energy and Mineral Resources to accelerate the use of solar energy, especially in the health sector, including the issuance of the Rooftop pv Regulation to accelerate the penetration of rooftop PV, increased socialization to the health sector, such as the construction of rooftop PV at the Bali Mandara Hospital 2020, with a capacity of 100 kWp. Ari informed that currently, around 15 hospitals in Indonesia have installed rooftop solar panels.

“Low carbon development has become a global agreement, and we are part of it. The health sector has a fairly large energy demand, and there are units that have to operate 24 hours a day. For that, energy efficiency is needed, not only saving, but also producing and using energy effectively and efficiently,” said Sujarwanto Dwiatmoko, Head of MEMR of Central Java Province.

Sujarwanto said that energy audits, replacement of energy-efficient lighting systems, as well as non-stop and stop electrical operation line separation needs to be done in the hospital. To support the green hospital, hospitals can use renewable energy, one of them is rooftop solar power. According to Sujarwanto, to optimize the use of rooftop PV, it is necessary to look at the electricity usage needs, such as what tools operate during the day or night and determine which PV system (offgrid/ongrid) will be used. Supporting the energy transition, MEMR of Central Java Province will issue special awards for energy saving and green building efforts. 

Adding, Romadona, Head of the Health Facilities Facilities Team Referrals from the Directorate of Health Service Facilities said that the principles of environmentally friendly hospitals include safe buildings and guarantee patient safety, paying attention to various patient conditions (such as disabled), adapting to medical science developments, saving energy and being environmentally friendly. Romadona explained that the environmentally friendly criteria themselves are divided into two types, namely design and construction, as well as operational criteria. Unfortunately, the application of the criteria was interrupted during the pandemic. 

On the other hand, Marlistya Citraningrum, Sustainable Energy Access Program Manager, IESR mentioned several advantages of solar energy such as its abundant potential and rooftop PV technology that is easily accessible, does not require land, is easy to maintain, and the size can be adjusted to the size of the house, legally on-grid and off-grid. Marlistya said that the average return on investment for rooftop solar power plants in Indonesia for small scale is 10-12 years. 

“Roof PV can last for 25-30 years, and after that it can still be used but with a slightly decreased power,” he said.

Marlistya explained that there are several rooftop PV financing schemes such as cash purchase, installments/credit, and performance-based renting. Marlistya informed that at the Semarang City Hall, the use of Rooftop Solar Power Plants was able to reduce the bill by almost 50% from Rp 13 million to Rp 6.5 million. On the other hand, for a small house, the savings can reach 60%.

The savings in electricity costs of Rp 810 million/year, as well as very easy and minimal PV maintenance is one of the testimonials for the use of 327.6 kWp rooftop PV at Pertamina Hospital Cilacap. Muhidi, Household Sector, Pertamina Cilacap Hospital, said that the installation of rooftop PV in his hospital is an effort of efficiency and savings as well as a form of support for the government to achieve a 23% energy mix by 2025.

Also supporting the development of PV mini-grid in Indonesia, UNDP is working on the Sustainable Energy Fund (SEF) with a total incentive of rooftop PV of Rp 23 billion.

“The scheme is performance based; install it first before submitting an incentive request,” explained Verania Andria, UNDP’s Senior Advisor for Sustainable Energy.

Verania explained that the requirements for submitting incentives, namely PLN customers who have installed or are currently installing rooftop PV as of December 1, 2021, can only submit one application, does not apply to PV funded by the government through the APBN/APBD, and installation is not done alone because UNDP wants to guarantee quality. installation of installed roof PV mini-grid. In addition, capital applications can be accessed through the application and the online site https://isurya.mtre3.id. Furthermore, she stated that so far, incentives of Rp. 155 million have been distributed.

Ing. Eko Supriyanto, General Chair of the Indonesian Hospital Engineering Association who was present on the same occasion informed that green healthcare consists of various aspects; One of them is energy conservation and emission reduction. He said that digitizing hospitals was important to overcome several issues in hospitals such as building architecture, waste treatment methods, the use of energy that is not environmentally friendly, and the over-use of electrical energy. One example of digitization, explained Eko, is the Smart Integrated Electricity System, a digital system that can monitor planning and energy use in hospitals.

“The hospital is still looking at the economic side of installing rooftop solar panels. Hospitals also have service priorities that prioritize patients and health services, so the decision to use rooftop solar panels requires comprehensive consideration. With the technology and cost of rooftop PV, now is the time for hospitals to start considering installing rooftop PV” said Eko.

Looking for Funding Schemes and Readiness of Solar PV Project Development

Workshop Financing Solar Energy - Indonesia Solar Summit

Jakarta, 20 April 2022– The issue of financing is still one of the big obstacles in developing renewable energy such as rooftop solar power plants in Indonesia. There is a large gap between the government’s agenda to accelerate solar penetration and access to funding for both developer and household projects. Difficult access to funding can also be a challenge for the development of solar energy in Indonesia.

Enthusiasm to develop solar energy is growing rapidly in Indonesia. At the Indonesia Solar Summit 2022, at least 31 parties are committed to installing solar PV with a capacity of up to 2,300 MW. The availability of cheap financing mechanisms can support the achievement of these commitments.

Elvi Nasution, Director of Solutions Initiatives, explained that there is one financing scheme that is not widely available, namely project financing. Project financing is limited financing of a new project that will be carried out through the establishment of a new company (separate from the existing company). The project finance provider can be a bank or a special financial institution (special mission vehicle).

“Compared to Malaysia, Thailand and the Philippines, project financing in Indonesia is relatively expensive. The contributing factors include government guarantees, the amount of debt, and the structure of the electricity business which is currently monopolized by PLN, so developers often encounter difficulties because there is only one offtaker in Indonesia,” explained Elvi.

Jagjeet Shareen, Assistant Director of General International Solar Alliance, in the same forum saw the importance of the role of financial institutions such as banks to participate in accelerating solar penetration.

“Providing training to bank employees is important to make them understand the character of solar business and calculate the financing risk for it. The cost of installing solar PV  may still be relatively expensive, but it’s actually not that expensive because the cost of solar continues to decline,” he said.

Jagjeet shared India’s experience in providing massive training to bank employees which had a significant impact because the bank then became more familiar with PV rooftop projects, their risks and development opportunities.

Both Elvi and Jagjeet agreed that in order to accelerate the penetration of PV rooftop, synergies from various parties, such as financial institutions, need to study the financing structure based on the conditions and potential in each location.

PLN as the single offtaker in Indonesia also needs to transform its business model so that it is relevant to the current situation and in the future where renewable energy will have a larger portion. Especially for solar development, PLN needs to make regular auction plans and finalize the development plan (pipeline). Good and clear project planning will increase the confidence of investors and financial institutions to fund a PV rooftop project for instance.

Prospective users of rooftop solar power plants are more or less aware of the situation of developing solar energy in Indonesia, which still needs a lot of improvement. Erwin Kasim, one of the participants of the Financing Solar Energy Indonesia Solar Summit 2022 workshop, asked about the minimum subsidy for initial installation costs for households who want to install rooftop PV and what schemes can be considered to relieve potential PV rooftop customers.

The bank, as the party that is expected to provide a solution to this initial cost problem, emphasizes the government’s role in making policies that are friendly to all parties in the development of this rooftop solar power plant.

“The use of solar requires government intervention to create financing schemes, protect banks from repayment failures, and incentives for customers,” said a representative of Bank Rakyat Indonesia (BRI) who attended the same forum.

The government’s role in issuing a customer-friendly rooftop PV  financing policy is highly expected. Because at this time, financing through the bank occurs because of a business-to-business agreement between the developer and the bank without any special policy from the government that regulates the financing of rooftop solar power plants by the bank.

Indonesia Fosters Investment Mobilization to Achieve Gigawatt Order of Solar

Jakarta, 19 April 2022 – Indonesia’s presidency at the G20 2022 is a momentum to show Indonesia’s seriousness in accelerating the global energy transition and the national energy transition plan to achieve carbon-neutral 2060 or faster. One of the ways to achieve it is by accelerating the utilization of solar PV, which has a potential of up to 3400 Gigawatts in Indonesia. Through the Indonesia Solar Summit 2022 organized by the Ministry of Energy and Mineral Resources (MEMR) in collaboration with the Institute for Essential Services Reform (IESR), it is hoped that the commitment of local governments, electricity consumers, private and state-owned developers, regional owned-enterprises, and the community to encourage the adoption of solar PV and mobilize the required investment.

Representing the Minister of Energy and Mineral Resources (MEMR), Secretary General of the Ministry of Energy and Mineral Resources Ego Syahrial said that Indonesia’s energy transition roadmap to achieve Net Zero Emission (NZE) by 2060, solar energy will play an important role in national electricity supply, of which 587 GW capacity new renewable energy (NRE), of 361 GW or more than 60% will come from solar energy.

“The government has three major programs for utilizing solar energy, namely rooftop solar PV, large-scale ground-mounted solar PV, and floating solar PV. The implementation of these various programs requires contributions from many parties, not only the government, business area holders, and renewable energy developers, but also energy users, such as the commercial and industrial sectors,” explained Ego in his speech as well as opening the Indonesia Solar Summit/ISS 2022 event.

The commitment, continued Ego, to realize the 2.3 GW (accumulated) solar PV project in 2022 and 2023 which was declared by 31 companies and the plan to build a solar PV component factory in Indonesia is to re-energize its solar energy investment in Indonesia.

Ego added that the rooftop solar power plant itself is one of the quick wins in accelerating the use of solar energy through direct contributions from energy users, especially for industry to meet increasingly strong market demands for green products.

“Support from local manufacturers is also very much needed to fulfill local content requirements and provide great benefits for the country, especially in terms of job creation. Besides that, aspects of easy access to cheap financing, incentives, and other financing facilities are very important to provide financial feasibility and increase energy investment. renewable energy such as solar PV,” he said.

Michael R. Bloomberg, Founder of Bloomberg LP and Bloomberg Philanthropies and United Nations Special Envoy for Climate Ambition and Solutions, emphasized the importance of transitioning to renewable energy as one of the right solutions to achieving zero emissions. He continued that speeding up the investment in solar power will accelerate the green resilient economic development.

“Indonesia has the potential to be a global leader in solar power. This summit is an important opportunity to showcase and accelerate the country’s clean energy efforts before G20 leaders arrive in Bali this November. Solar is already cheaper than coal in many countries. The more we do to speed up investment in solar power, the faster we can cut emissions, create new jobs, and build a stronger and more resilient global economy,” Michael explained.

In 2021, IESR identified large-scale PV project pipelines totaling 2.7 GWac, with an investment value of US$3 billion. At the ISS 2022, the number of solar PV project pipelines committed by multiple companies amounts to 2,300 MW, consisting of rooftop PV (largest percentage), ground-mounted solar PV, and floating solar PV. To mobilize this investment potential, an attractive and supportive ecosystem is needed; including sound policies and regulations, comprehensive implementation of existing regulations, and support to drive the development of the solar PV industry supply chain in Indonesia. 

Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR) stated that to achieve the renewable energy target of 23% by 2025 according to Presidential Regulation 22/2017, as well as the RUPTL target of 10.9 GW, additional renewable energy generating capacity of 4 GW is needed from outside of PLN. This addition can be contributed by solar PV, both rooftop solar and the use of solar PV in other PLN electricity business holders.

“From the declaration of the 2.3 GW solar PV project at ISS 2022, shows the enormous potential of solar energy in Indonesia. Indonesia can become a Solar Powerhouse in Southeast Asia with potential growth of 3-4 GW annually if it is fully supported. It opens up opportunities for green investment to stream, opportunities to grow the integrated solar power industry from upstream to downstream, and employment and become the driving force for post-COVID economic recovery. President Jokowi needs to see this potential and lead the solar energy revolution for the energy transition in Indonesia,” said Fabby Tumiwa.

The Indonesia Solar Summit (ISS) 2022 was held on 19 and 20 April 2022, highlighting support from the Coordinating Minister for Economic Affairs, Minister of Energy and Mineral Resources represented by the Secretary-General of the Ministry of Energy and Mineral Resources, Deputy Minister of State-Owned Enterprises, Deputy for Investment Planning at the Ministry of Investment, representatives of the Ministry of Finance, CEOs of national and multinational companies, and 15 speakers on Summit Day 2 workshop. ISS 2022 receives support from Bloomberg Philanthropies, Matahari Power, Utomo SolaRuv, BloombergNEF, International Solar Alliance, the Indonesian Solar Energy Association, and the Clean Affordable and Secure Energy in Southeast Asia (CASE) Project; and was attended by more than 600 participants online and offline.

Central Java Provincial Government Boosts Utilization of Rooftop PLTS in Local Government Environments

JAKARTA – Located in the Equator area with the sun shining almost all year round, the utilization of solar energy in Indonesia is not very encouraging. Having solar energy potential of up to 3 – 20 GW, Indonesia has only utilized about 400 MW of solar energy based on land suitability. At the same time, the Government of Indonesia is racing against time to increase its renewable energy mix to achieve the target of 23% renewable energy in the national energy mix by 2025.

Several steps to fulfill the renewable energy mix target of 23% by 2025 have been carried out, such as Regulation No. 26 of 2021 concerning Rooftop Solar Power Plants (PLTS) issued by the Ministry of Energy and Mineral Resources (ESDM). This regulation emphasizes that rooftop solar power plants can be a strategy for increasing the national energy mix. Local governments have a strategic role in accelerating renewable energy by making strategic policies to develop renewable energy in their regions. As the first solar province in Indonesia, Central Java recorded a renewable energy mix of 13.38% in 2021. The Central Java provincial government also encourages the expansion of rooftop solar power plants (PLTS) within the local government as a commitment from the Central Java Solar Province initiative, cooperation between the Department of Energy and Mineral Resources Central Java and IESR.

In his remarks by the Director-General of Bina Bangda, Ministry of Home Affairs, Teguh Setyabudi, delivered by the Director of SUPD I, Ministry of Home Affairs, Edison Siagian, said regional development is part of national development. Specifically, regional energy transition policies are also the authority of local governments in setting standards and achievements targets. However, until now, the provincial government’s authority is still very limited, and the steps in developing renewable energy are also limited.

“The Central Java Provincial Government’s steps in continuing to develop programs and activities should be appreciated. Especially in the limited authority possessed by the provincial government, Central Java has involved elements of the regional secretary who have the function of coordinating, overseeing the implementation, and reducing the role of energy conservation across various OPDs to continue to innovate,” he said in the ‘Implementation of Rooftop Solar Power Plants in Local Government Environments’ on April 13, 2022, which was organized by the Ministry of Energy and Mineral Resources (ESDM) in collaboration with the Institute for Essential Services Reform (IESR).

Various resource persons were also presented to see how local government learning can participate in the implementation of renewable energy. Ir. Tedjo Prabowo, a representative of the Bappeda of the Central Java Provincial Government, revealed that the provincial government’s commitment had been stated in the 2018 to 2050 Regional Regulation RUED with a target of a new renewable energy mix 2025 is expected to reach 21.32%. “The challenge in achieving the EBT target is still the same, namely easier access to fossil energy. And as stated by the Ministry of Home Affairs, the regional authority in the administration of government affairs in the energy and mineral resources sector is still limited. However, the commitment to realizing energy sovereignty will continue to be supported by all sectors, including the Environment, Private and Community Services,” he said.

Marlistya Citraningrum, Manager of Access to Sustainable Energy at IESR, also said that through the RUED, a circular letter from the governor of Central Java and a circular letter from the regional secretary was issued to implement independently in the Regent’s office or DPRD for the development of PLTS in the social and productive sectors for green economic recovery. “Although there are challenges in the limited government budget, innovation is needed using various financing schemes such as leasing, ESCO, and third party financing (installment schemes). In line with this, the priority of development in their respective regions and the understanding of policymakers within the local government regarding rooftop solar power plants must be improved, “said Citra.

 

The use of solar energy mentioned by Citra regarding its application to rooftop PV mini-grid was also mentioned by Hevearita Rahayu, Deputy Mayor of Semarang. He has also started the first step as a commitment to new and renewable energy in the city of Semarang. “In 2019, through Bappeda, the Semarang City Government has conducted a study on the potential for RE development and became Perda No. 6 of 2022, which later became the vision of the RPJMD for 2021-2026. In 2020 there will also be a grant process from the Ministry of Energy and Mineral Resources, at which time we will also construct a new parking building to place 75kWp Solar PV. The result is savings in electricity bills of up to nearly 60 percent. The submission of grants by MEMR will also continue in 2021 to implement the RPJMN 2021-2026 priority program instructions. In the 2022 RPJMD, Semarang is currently compiling a feasibility study for solar panels to be built at city halls, offices, and schools. The target for 2023-2026 will be to carry out physical development in stages in all Semarang government offices,” he said.

 

The Head of the Central Java ESDM Office, Sujarwanto, also gave his opinion on energy policy and a joint commitment. “There needs to be enthusiasm to reduce the rate of CO2 emissions or build without excess carbon emissions. Central Java has had a commitment to the Regional Action Plan for Greenhouse Gas Control since five years ago. Therefore, government institutions must be examples of low carbon development. Together with a stronger commitment to the global, Indonesia is committed to the energy sector. Many districts/cities have budgeted for this program. This year there will be a budget refocusing. It is hoped that the regional budget will prioritize solar energy this year because the control of Covid-19 has improved. The Department of Energy and Mineral Resources is ready to provide assistance starting from choosing technology, managing energy in the office, and a consultation room with IESR,” he said.

Support for the application of rooftop solar power plants must continue as well as information on policies and implementation in Central Java Province will always be echoed. So that if all parties can collaborate well, then the implementation of the energy transition, which is the national development mandate, will be able to be implemented and benefit the people of Central Java. Furthermore, Central Java has contributed significantly to achieving the national renewable energy target.