Commercial and Industrial Sector Ready to Encourage the Use of Rooftop PV

Jakarta, March 15, 2022 – The development of rooftop solar PV in Indonesia in the last three years has been very rapid. Citing records from the Ministry of Energy and Mineral Resources, there is a significant increase in installed capacity from less than 1.6 MW in 2018 to 48.79 MW in 2021. This is certainly encouraging. Solar power has become a clean energy that costs one of the cheapest today. The massive use of solar energy is the Indonesian government’s strategy to achieve the target of a 23% renewable energy mix by 2025. In addition to large-scale PV projects, the government has launched rooftop PLTS as a National Strategic Project (Proyek Strategis Nasional – PSN) of 3.6 GW.

In addition to utilizing the technical potential of solar energy in the areas where it operates, there is a need in the commercial and industrial sectors to use clean energy in their production and business operations. Nurul Ichwan, Deputy of Investment Planning – BKPM in the webinar “Business Going Green” organized by the Ministry of Energy and Mineral Resources and the Institute for Essential Services Reform, said that as many as 349 multinational companies have issued commitments to use 100% renewable energy in their business activities (RE100).

“In addition, other regulations such as the carbon border adjustment mechanism which will be implemented in the European Union will certainly encourage companies to switch to renewable energy so that they can be competitive with market demands, the easiest is rooftop solar power,” explained Ichwan.

Ichwan also added that as an offtaker, PLN plays an important role in this energy transition process.

“The big consideration lies with PLN, if they cannot receive the maximum supply of renewable energy, this transition process will not run quickly,” he explained.

The industrial sector’s need to reduce carbon emissions was justified by Karyanto Wibowo, Director of Sustainable Development DANONE, who explained that his company continues to strive to reduce greenhouse gas emissions from its business activities, starting from energy efficiency, carbon offsetting, and installing rooftop solar panels on factory facilities.

“We plan to use 100% renewable energy (RE100) in 2030, currently we have installed rooftop solar panels with a total capacity of 6.2 MWp in 5 locations. With this installation, only 15 percent of clean energy is produced, we still have to catch up to another 85 percent until 2030,” he explained.

Karyanto continued that regulatory innovation for the power wheeling scheme would greatly assist the industrial sector in utilizing renewable energy.

From the developer side, George Hadi Santoso, Vice President of Marketing Xurya Daya, highlighted several problems with installing rooftop solar panels related to permits from PLN.

“We encountered many obstacles in West Java and Central Java. PLN is not responsive, and has not implemented regulations issued by the Ministry of Energy and Mineral Resources. We were once asked to become premium consumers first,” explained George.

The availability of export-import kWh meter is also still a problem with the slow flow of roof PV installations.

Aries, PLN’s APP Division, who was also present online clarified that the regulations currently being implemented by PLN still refer to the Minister of Energy and Mineral Resources Regulation 49/2018 which was revealed in the PLN Directors Regulations number 18 and 49. The derivative rules for the Minister of Energy and Mineral Resources Regulation number 26 /2021 which is an update of Ministerial Regulation 49/2018 regarding rooftop solar is still in the process of being drafted by PLN.

“Services at PLN units are strongly influenced by queuing conditions. It is necessary to reorganize the service mechanism in each unit so that all consumers can be served properly,” explained Aries.

Fabby Tumiwa, Executive Director of IESR and General Chair of the Indonesian Solar Energy Association, reminded that the Minister of Energy and Mineral Resources Regulation No. 26/2021 has officially taken effect as of January 22, 2022, so it should have been implemented by that date.

“I hope this condition can be resolved soon so that there is clarity for licensing arrangements from 15 days to 5 days,” said Fabby.

The service industry that attended the ‘Business Going Green’ forum shared their experiences for taking part in this decarbonization effort. Antonius Augusta, Executive Director of Deloitte Indonesia, stated that in his institution, emission reduction actions are derived to individual actions.

“Globally, we are committed to using 100% renewable energy by 2030 in office buildings and using electric vehicles as operational vehicles. In Indonesia itself, sustainability action is carried out by looking again at work methods to reduce business trips. Some employees have also used rooftop solar panels as a personal initiative to help reduce emissions,” explained Augusta.

The selection of vendors and suppliers who also have a strong commitment to sustainability is one of Pricewaterhouse Coopers (PwC) Indonesia’s strategies. Marina Mallian, Human Capital Business Partner of PwC Indonesia, explained that the company is more focused on sustainable actions that are integrated in the daily activities of employees, such as prioritizing local meeting destinations as well as doing carbon offsetting.

“Installing renewable energy such as solar PV is a bit difficult, because the building (office) is not ours. Even for changing vehicles to EVs (electric vehicles), we have concerns about the availability of battery charging infrastructure.”

Approved! The New Revised Solar Rooftop Regulation Targets the development of 3.6 GW of Rooftop Solar by 2025

The issue of government policies of the Minister of Energy and Mineral Resources Regulation No. 49/2018 in terms of rooftop solar in Indonesia since 2018 has proven to have increased the adoption of PV mini-grid roofs from initially only 609 customers in 2018 to 4,262 customers in 2021. In 2021, the Minister of Energy and Mineral Resources (MEMR) revised regulation No. 49/2018 to  Regulation No. 26 of 2021.

“The implementation of the MEMR Regulation No. 26 of 2021 is expected to boost the development of the rooftop solar PV market, especially with the stipulation of a target of 3.6 GW of rooftop solar power in the National Strategic Project (PSN),” said Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR) in the Indonesia Solar Week 2022 (10/2/2022). He is also the Chairman of the Indonesian Solar Energy Association (AESI).

The MEMR Regulation No. 26 of 2021 is the third revision of MEMR No. 49/2018. The Minister of Energy and Mineral Resources Regulation No. 26 of 2021 has been issued since August 20, 2021. After experiencing a delay in ministerial approval finally, it was agreed to be implemented on January 18, 2022. The following is a comparison of the improvement in the provisions of the three MEMR Regulations:

Revision

Rooftop Solar MEMR Regulation

No. 49/2018No. 16/2019No. 26/ 2021
Electricity export65%As in MEMR Ministerial Regulation No.49/2018100%
Availability of export-import kWh metersMax. 15 business days after SLO (Operation Worthiness Certificate) received by PLNMax. 15 business days after SLO (Operation Worthiness Certificate) received by PLN
Period for setoff of the unused creditMax. 3 months6 months
Timeline for solar rooftop ApplicationMax.15 days5 business days without an adjustment to the Electricity Sale and Purchase Agreement (PJBL) and 12 days with an adjustment to the PJBL
CostumerOnly PLN’s CustomerPLN customers and customers in non-PLN Business Areas (IUPTLU holders).
Industrial CustomerSubject to capacity charge and emergency electricity purchase
with the formula:

Capacity cost = total inverter capacity (kW) x 40
(minimum load limit of electricity in one month) hours x electricity tariff. then multiplied by the electricity tariff.
Subject to capacity charge with
formula :

Capacity cost = total inverter capacity (kW) x 5
(five) hours x electricity tariff.
Subject to capacity charge with
formula :

Capacity cost = total inverter capacity (kW) x 5
(five) hours x electricity tariff.
Online reportingNANAAvailability of submitting the application, reports , and supervision of the solar rooftop program;
Complaint CenterNANAAvailable
Othersthe possibility for trading carbon credits generated from solar PV systems

The government hopes that the improvement of the rooftop solar regulation will encourage the achievement of the target of 3.6 GW of PV mini-grid by 2025. The target of 3.6 GW of rooftop solar is the MEMR proposal that is included in the National Strategic Project as stated in the Coordinating Ministry for Economic Affairs Regulation No. 7 of 2021. The potential positive impacts of the projected growth of 3.6 GW Rooftop PLTS include absorbing 121,500 workers and reducing Greenhouse Gas (GHG) emissions by 4.58 Million Tons of CO2e.

As part of the implementation of the MEMR Ministerial Regulation No. 26/202, Fabby encouraged the government to immediately establish a solar rooftop Customer Center per article 26 of the MEMR Ministerial Regulation. In addition, Fabby hopes that the solar rooftop application process and permits are clear and concise following the latest provisions. On the other hand, problems that are often faced by potential customers such as the length of time to obtain an Exim meter can also be overcome, thereby increasing the installation of rooftop solar power plants in the future.

Solar PV Answers Industrial and Commercial Needs to Provide Green Products

Semarang, October 06, 2021 – The Commercial and Industry sectors are potential partners to accelerate the penetration of renewable energy. The increasingly strong market demands for green products encourage the commercial and industrial sectors to switch to environmentally friendly technologies in order to maintain their existence in the global market. Solar PV is a strategic choice for the commercial and business sectors considering its relatively fast installation, as well as the availability of solar energy sources that are evenly distributed throughout Indonesia. In addition, investing in solar PV can reduce production costs.

Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR) explained that currently in line with efforts to reduce greenhouse gas (GHG) emissions, the industrial sector is faced with the obligation of the economic value of carbon. Especially for goods that are exported such as to European countries, America and Japan. The carbon footprint of a product that exceeds the specified maximum will be taxed. In addition, public awareness about sustainability issues is increasing, as stated by a survey by WWF and The Economist which found that searches on search engines with the keyword ‘sustainability’ increased by more than 71% during 2016-2020.

“Shareholders of companies have asked that all these companies commit to use 100% renewable energy. So if we want Central Java to become an industrial center, access to renewable energy must be facilitated,” said Fabby at a webinar organized by IESR with the Central Java Government entitled “Rooftop Solar Energy for the Commercial and Industrial Sector in Central Java” (6/10/2021).

In general, in terms of adoption, the number of rooftop solar PV users in Indonesia is increasing. Based on data from the Directorate General of EBTKE, until last August 2021, there were 4,133 rooftop solar PV customers in Indonesia, with a total installed capacity of 36.74 MWp. Judging from the capacity of rooftop PV by region, Central Java and DIY were ranked third with a rooftop solarcapacity of 5.83 MWp.

Chrisnawan Anditya, Director of Aneka EBT at the Ministry of Energy and Mineral Resources, explained that the government has given priority to the development of rooftop solar power plants considering its huge potential, fast installation, and very competitive prices.

“The medium-term strategy that is being pushed for the development of PV is rooftop solar which is targeted at 3.6 GW by 2025. In addition, we also continue to encourage utility-scale PV,” explained Chrisnawan on the same occasion.

To support infrastructure and services towards the energy transition, PLN must also improve on preparing grid adaptations and adapting to a business model that accommodates large amounts of renewable energy.

“This rooftop PV has an impact on the current PLN grid due to its intermittent nature. So PLN must provide a standby unit to supply electricity when the power generated by the PV rooftop cannot meet the existing electricity needs,” explained M. Irwansyah Putra, General Manager PLN Central Java – DIY.

Irwan also explained that in supporting the carbon tax mechanism, PLN has issued an REC (Renewable Energy Certificate). By purchasing this certificate, PLN will distribute electricity obtained from clean energy to the industry.

Questioning policies to encourage renewable energy in Central Java Province, the Head of the Central Java Province ESDM Office said that his party had prepared various policies. However, according to him, to encourage certain changes, in this case the transition from fossil energy to renewable energy (Solar PV-ed), policy support alone is not enough.

“Change will happen more quickly if it is driven by a market driven mechanism, so it’s not just complying with certain rules. The Central Java ESDM Office has tried to make policy packages that cover this market aspect with input from various parties such as the government, universities, and NGOs,” explained Sujarwanto.

The Central Java Regional Government also provides assistance to the commercial and industrial sectors in Central Java which are transitioning to green industries. “There are several steps taken to implement the green industry, i.e. training, facilitating certification for the green industry as well as awarding the green industry. Several companies in Central Java received this award,” explained M. Arif Sambodo, Head of the Industry and Trade Office of Central Java Province.

Opportunities for the commercial and industrial sectors to adopt solar PV are getting wider with the availability of various Solar PV investment schemes such as installments and leases. Anggita Pradipta, Head of Marketing for SUN Energy, said that there are three schemes offered by SUN Energy for prospective rooftop solar PV customers, namely Solar purchase, Performance Based Rental, and Solar Leasing.

“For the commercial and industrial sectors who want to install solar panels but are constrained by the initial installation cost, we recommend taking a performance based rental scheme. With this scheme, the customer will be bound by a contract for 15-25 years, where all the costs of maintaining the solar PV unit will be borne by SUN Energy, after the contract ends, the assets will become the property of the customer,” explained Anggi.

Seizing and Keeping the Momentum of Solar Energy Rise

Jakarta, 9 September, 2021-In the past year, there was a dynamic change in the energy sector. The approaching deadline of the Paris Agreement and the latest IPCC AR6 report stated that our time shortened to keep temperature rise. It  has raised discourse about decarbonization and net-zero commitment from all around the globe. Rapid deployment of renewables is one of the keys to decreasing emissions as the energy sector is the biggest emitter. In fact, the cost of clean energy keeps coming down. Studies show that wind and solar are the cheapest for ⅔ of the world’s population which is about 77% of GDP and over 90% of the generations (BloombergNEF, 2020). 

Solar energy will be the backbone of decarbonization due to its flexibility to be installed on various scales, from household size to utility size scale. Thus, it makes possible a massive solar deployment in Indonesia “Indonesia has a huge potential of solar energy, with the declining cost of a solar energy system and its ability to be installed in various power scales, it will enable more parties to take part of this collective action to not only deploying renewable energy but also to fight the climate crisis,” Fabby Tumiwa, the Executive Director of IESR summarized his speech during the report launching of Scaling Up Solar in Indonesia: Reform and Opportunity.

Caroline Chua, a Senior Associate of Bloomberg NEF Southeast Asia, as well as lead author of the report, emphasized that achieving Indonesia’s renewable target of 23% in 2025 needs double effort from the current condition. 

“Indonesia’s 23% renewable energy target can be achieved by installing 18 – 23 GW of solar PV. Solar alone can help Indonesia to meet its 2025 target as it can be deployed rapidly and the technology is already available and getting cheaper day by day,” she said.

The economy of solar is getting more and more competitive, and in the future, it will outcompete coal power plants. The solar tariff in Indonesia has declined by 76% from 25 cents/kWh in 2015 to 5,81 cents/kWh in 2020. Daniel Kurniawan, IESR’s Solar analyst said that there is already interest from the market to bloom in Indonesia.

“The challenge here is really to replicate the solar procurement. I think the market is already sending a strong signal that they are interested in Indonesia and it can be achieved. The question now is how Indonesia can think not only to achieve its renewable energy target but also to decarbonize its energy system,” he said.

Earlier this year, PLN announced that it’s going to be net-zero emission by 2060. In their new draft of RUPTL the plan to retire old coal power plants is included.

“PLN presents a roadmap to be net zero-emission in 2060. In the new RUPTL we also give more space for renewable energy and include the plan to retire coal power plants. According to us, we will retire all coal power plants in 2056 and finally reach net zero-emission in 2060,” Zainal Arifin, Executive Vice President Engineering, and Technology, PT PLN explained.

Chrisnawan Anditya, Director of Various New and Renewable Energy, Ministry of Energy and Mineral Resources, agreed that solar will be the key to achieve Indonesia’s target as well as fighting climate change.

“We need to address the intermittency issue and develop an energy storage system. In our planning, we expected the energy storage system to come from the pump-hydro storage that can be developed in 2030,” he said. 

The commitment is renewed and updated to achieve net zero-emission, yet,  it needs to be manifested through concrete planning. So that all stakeholders in Indonesia can use this momentum to seize renewable energy deployment in Indonesia for a common and greater good in the fight against the climate crisis.