Efforts to Encourage the Effectiveness of Rooftop Solar Quota Fulfillment

press release

Jakarta, June 7, 2024– The Ministry of Energy and Mineral Resources (MEMR) has issued the PLN Rooftop Solar PV System Development Quota for 2024-2028 through Decree of the Director General of Electricity Number 279. K/TL.03/DJL.2/2024. The distribution of rooftop Solar PV quotas is based on the electricity system. The total rooftop solar PV quota in eleven power systems for 2024-2028 is 5,746 MW with a quota of 901 MW in 2024, 1,004 MW in 2025, 1,065 MW in 2026, 1,183 MW in 2027, and 1,593 MW in 2028. 

The Institute for Essential Services Reform (IESR) appreciates the Ministry of Energy and Mineral Resources for setting the rooftop solar PV quota for PLN, which consumers and rooftop solar businesses have awaited. However, IESR emphasizes that the quota distribution has not been carried out according to the clustering/subsystems outlined in article 9, paragraph 3 of Permen ESDM No. 2/2024. It’s important to note that as per the Permen, the clustering responsibility lies with the Electricity Power Holder Business License (IUPTLU) holder.

Fabby Tumiwa, Executive Director of IESR, stated that allocating rooftop solar PV quotas at the power system subsystem cluster level would offer clarity for consumers and ensure investment certainty for rooftop solar PV businesses. Without a net-metering mechanism, rooftop solar PV installations will primarily serve commercial and industrial (C&I) customers.

“The subdivision per subsystem offers clearer information for consumers regarding their options to apply for rooftop PV installation. Therefore, the Director General of Electricity needs to ensure that PT PLN submits the subdivision per cluster before July when the application period begins,” Fabby said. 

IESR encourages the Ministry of Energy and Mineral Resources to actively socialize the MEMR Regulation on rooftop solar PV and distribute rooftop solar power plant quotas and their mechanisms to consumers. The government should also proactively remind other IUPTLU holders to submit capacity quotas before July immediately. The newly issued rooftop PLTS quota for PLN is still not in line with the National Strategic Program target of 3.6 GW of rooftop PLTS set in 2021 by the Coordinating Minister for Economic Affairs Regulation No. 7/2021. 

The government also needs to consider customer interest in rooftop PV adoption to increase the rooftop PV quota in 2025 and achieve the renewable energy mix target of 23 percent.

“Industrial customers’ interest in using rooftop solar PV is high and is aimed at reducing energy costs and ensuring sustainable manufacturing processes, so eliminating net-metering does not have much impact on their interest. What also needs to be explained is the procedure in case of oversubscription (demand exceeding the set quota) in a particular system cluster. Interest from residential customers may drop due to the changing economics. Still, with more widespread information and the desire to save electricity costs, usage demand may also grow,” said Marlistya Citraningrum, Program Manager for Sustainable Energy Access, IESR.

Marlistya mentioned establishing rooftop solar PV quotas may represent an opportunity for financial institutions to provide appealing financing schemes. Previously, the market niche may have been less conspicuous due to the absence of quotas. However, financial institutions now possess additional information to conduct a comprehensive assessment, enabling them to introduce green financing products.

Encouraging the Energy Transition in the Industrial Sector in South Sumatra

Jelajah Energi Sumatera Selatan

Palembang, 26 February 2024 – Energy is a basic need for individuals and communities with various purposes. Even though energy is something crucial in human life, not many people know or are critical of the energy sources (such as electricity) that they use every day.

On a larger scale such as the industrial sector, energy needs will be directly proportional to the productivity and economic contribution of the products produced. Somewhat different from energy use on a household scale, energy use in the industrial sector is relatively well monitored. In terms of awareness of energy sources, industry tends to better understand the energy sources they choose.

In an effort to promote the use of renewable energy, the Institute for Essential Services Reform (IESR) collaborates with the South Sumatra Province Energy and Mineral Resources Office to organize the South Sumatra Energy Exploration (Jelajah Energi Sumatera Selatan) activity for one week starting from Monday, February 26th, 2024 to Friday March 1st, 2024. This activity also embraces journalists as strategic partners in increasing public literacy regarding the energy transition.

The series of events began with an introductory workshop to provide participants with a basic understanding of energy and the energy landscape of South Sumatra, which acts as an “energy barn”. However, the dominant energy used is fossil energy i.e coal. Meanwhile, apart from fossil energy sources, South Sumatra Province also has a technical potential for renewable energy reaching 21,032 MW, yet only around 4.7% or 989 MW has been utilized.

Rizqi M. Prasetyo, IESR Sub-National Project Coordinator, explained that with the renewable energy potential of South Sumatra, projects can be utilized to bring benefits to the community.

“One of the (good practices, ed) that has been carried out in South Sumatra is the CSR initiative to use solar PV to drive land irrigation water pumps,” said Risky.

Secretary of the South Sumatra Province ESDM Service, Ahmad Gufran, said that his party was open to various ideas for greater use of renewable energy.

“We will continue to contribute to the development of the renewable energy sector to obtain clean, environmentally friendly energy. In the future, we hope that the use of clean energy can expand to all levels of society,” said Ahmad Gufan.

After receiving a general introductory workshop, the Energy Exploration journey began by visiting PT Pupuk Sriwidjaja (PUSRI). PT PUSRI is the first fertilizer producer in Indonesia and has been operating since the 1970s. Considering that the company’s operational period is quite long, production assets have also entered a period of revitalization. This moment is also used to switch to a cleaner type of technology for future operational periods.

VP of Environment at PUSRI Palembang, Yusuf Riza, explained that in an effort to be in line with the government’s agenda to reduce greenhouse gas (GHG) emissions, PT PUSRI is taking a number of steps, including implementing energy efficiency practices, using electric vehicles as operational vehicles in factory environments, and installing on-grid rooftop PV for office operations.

“Currently we have installed a rooftop PV of 110 kWp as an energy source in office buildings, and this year (2024, ed) we plan to increase our (PV) capacity by 100 kWp. So in total we will have around 210 kWp PV capacity,” said Yusuf.

Civil Society Coalition: New Energy Sector Rules Set Back Energy Transition Commitment

press release

Jakarta, March 8, 2024 – The Renewable Energy Movement’s Civil Society Coalition is questioning the government’s commitment to the energy transition. They consider some regulations to be disincentives for switching to renewable energy. These regulations include the Energy and Mineral Resources (ESDM) Ministerial Regulation on solar PV, the Presidential Regulation (Perpres) on carbon capture and storage, and the Draft Government Regulation (RPP) on the National Energy Policy (KEN).

The Ministry of Energy and Mineral Resources (ESDM) has recently issued Regulation No. 2 of 2024, which outlines new rules for Rooftop Solar Power Plants. Unfortunately, these changes may discourage the public from installing rooftop solar power plants, particularly in households and micro, small, and medium enterprises (MSMEs). The first change is that excess rooftop solar power production can no longer be exported to PT PLN. Therefore, it won’t be counted as a bill reduction. The second change is that the development of rooftop solar PV will follow a quota system set by PLN. In addition, there will be only two registration periods per year. The problem is that the export of electricity to the PLN grid is the attraction of rooftop solar PV. With this provision, people can pay more to install batteries. Not only that, the payback period for rooftop solar power plants will also be extended to 9-10 years. In fact, with the 100% excess electricity export provision as in the current regulation, the cost of installing rooftop solar power plants can be recovered in four to five years.

“This regulation is a setback because it will reduce public participation in installing rooftop solar power plants. Not only does it hinder household consumers, but this new regulation also makes it difficult for industries that want to install rooftop solar power plants. This means that the new regulation shows that the government is getting further away from its commitment to energy transition,” said Jeri Asmoro, Digital Campaigner of 350.org Indonesia.

Community enthusiasm for rooftop solar power installation in rural and urban areas is relatively high, according to Reka Maharwati, Coordinator of Enter Nusantara. For instance, the people of Sembalun Village in West Nusa Tenggara and the Al-Muharram Mosque community in Taman Tirto, Yogyakarta, have installed rooftop solar power to achieve their dream of energy independence.

“I’m sure many other communities want to install rooftop solar panels in their homes or even be empowered to work collectively in the community. The government should be able to collaborate with these enthusiasts and create new schemes more beneficial to the community,” said Reka.

Similarly, Hadi Priyanto, a Renewable Energy Campaigner of Greenpeace Indonesia, revealed that an equitable energy transition can only be realized if the community is involved. “Community participation is one of the keys to achieving the energy mix target, but various revisions to existing regulations show the government’s lack of seriousness in energy transition efforts. The principles of fairness and democratization of energy that have been echoed in the JETP program will only be a platitude without real steps to break away from fossil energy dependence,” he added. 

 

Similar to the updated regulations about rooftop solar PV, the draft RPP KEN containing a reduction in the renewable energy mix target from 23% to 17-19% in 2025 also hinders the acceleration of the energy transition. In the National Energy Council (DEN) document on the draft RPP KEN, the renewable energy mix until 2030 is targeted at 19-21% and will only increase in 2040 to 38-41%.

Deon Arinaldo, Program Manager of Energy Transformation, Institute for Essential Services Reform (IESR), explained that the draft KEN RPP only allows Indonesia to reach peak emissions in 2035, which is 7-10 years later than what is needed to limit the increase in global average temperature below 1.5°C, as recommended by the Intergovernmental Panel on Climate Change (IPCC) report. This puts the achievement of the Paris Agreement and carbon-neutral commitments by 2060 or sooner, which the government has aimed for, at risk.

The delayed peak emission in Indonesia means that the country will have to speed up its energy transition in a shorter time frame than previously anticipated, resulting in higher costs and more significant social impacts that will be difficult to mitigate. The draft policy has also affected the perspectives of various actors, including renewable energy investors and developers, regarding the government’s commitment to promoting renewable energy development.

“This also marks the reduction in primary energy mix targets in 2025 and 2030, especially the share of renewable energy such as solar and wind, which can hamper the cooperation of the energy transition. This is because renewable energy that can enable energy democratisation, such as solar energy, has a small portion. Greater support is given to large-scale projects such as fossil plants with carbon capture storage (CCS) or nuclear technology. So the draft KEN RPP does not favour energy transition with the community,” said Deon Arinaldo.

 

The plan to change KEN also contradicts Indonesia’s JETP Agreement commitment, which targets a renewable energy mix of more than 44% by 2030. It is feared that changes to KEN will impact the revision of the JETP commitment. In addition, as a large umbrella for national energy planning, the draft KEN RPP also has the potential to undermine efforts to transition to renewable energy that have been carried out in the regions.

Red Carpet for False Solutions

Not only does it disincentivize renewable energy development, but government policy encourages false solutions as an energy transition strategy. This step is fatal because it can lock Indonesia into fossil energy dependence, which leads to failure to achieve carbon neutrality.

 

In the revised KEN, for example, until 2060, the government still plans to operate fossil energy-based power plants and ‘green’ them with carbon capture and storage (CCS) technology. In addition, the government intends to operate nuclear power plants (PLTN) by 2032 and use gas fuel for transportation and households until 2060.

The government’s support for fake solutions is also shown by the issuance of Presidential Regulation No. 14 of 2024 concerning implementing Carbon Capture and Storage Activities. This regulation allows companies to inject and store carbon emissions into underground reservoirs. The IEEFA Report shows that out of 13 CCS projects with a total of 55% of the world’s capacity, seven projects performed poorly, two failed, and one stopped operations. The application of CCS technology is feared to be a greenwashing effort that perpetuates fossil energy-based power plants.

These three regulations raise questions regarding how serious the government is about encouraging renewable energy development. This is because the national renewable energy mix has always been below the target in the last five years. 

“Regulations will be a long-term legal basis to ensure that energy transition steps are carried out legally. If the legal basis is made exactly the opposite of the target stated by the government, then where is the commitment to the energy transition? If the regulations are continuously directed to continue utilising fossil energy, investors interested in doing renewable energy business will withdraw because they do not have legal certainty. Our problem is in legal certainty,” said Agung Budiono, Executive Director of the CERAH Indonesia Foundation.

Kata Data | Rooftop Solar Power for Households will be More Expensive due to New Rules

The government has just issued Minister of Energy and Mineral Resources Regulation Number 2 of 2024 which regulates rooftop solar power plants. Secretary General of the Ministry of Energy and Mineral Resources, Dadan Kusdiana, admitted that household consumers will find it difficult to adopt rooftop PTS after the new regulation is issued.

Read more on Kata Data.

MEMR Regulation No. 2/2024 Limits Public Participation to Support Energy Transition through Rooftop Solar PV

press release

Jakarta, February 23, 2024 – The Indonesian government has officially issued Minister of Energy and Mineral Resources (MEMR) Regulation No. 2 of 2024 concerning Rooftop Solar Power Plants Connected to the Electricity Network of Holders of Electricity Supply Business License for Public Interest, which is a revision of MEMR Regulation No. 26 of 2021. 

In this new regulation, the net-metering scheme is abolished so that excess electrical energy or export of electrical power from users to State Electricity Company (PT PLN Persero) cannot be calculated as part of the reduction in electricity bills.  The regulation also stipulates a quota mechanism for rooftop solar power systems in the electricity system of owners of Electricity Supply Business License for Public Interest (IUPTLU) for five years. In addition, this regulation stipulates the registration period twice a year and the compensation provided by the state to PLN if the cost of electricity supply is affected due to the penetration of rooftop solar PV.

The Institute for Essential Services Reform (IESR) considers that the elimination of the net-metering scheme will make it difficult to achieve the National Strategic Project (PSN) target of 3.6 GW of rooftop solar PV by 2025 and the 23% renewable energy target in the same year. The impact of the elimination of this scheme is a decrease in the economic level of rooftop solar power plants, especially in the household segment, which generally experiences peak loads at night. 

Fabby Tumiwa, Executive Director of IESR said that household or small business customers will tend to delay the adoption of rooftop solar PV because their peak electricity demand occurs at night, while solar PV generates peak energy during the day. Without net-metering, rooftop solar PV investment becomes more expensive, particularly when users have to spend additional funds for battery energy storage.

“Net-metering is actually an incentive for household customers to use rooftop solar systems. With PLN’s controlled electricity tariffs, net-metering helps improve the economic viability of rooftop solar systems installed at a minimum capacity of 2 – 3 kWp for R1 category consumers. Without net-metering and the relatively high cost of batteries, this minimum capacity cannot be met, resulting in higher investment costs per kilowatt-peak unit. This will reduce the economics of rooftop solar systems,” said Fabby Tumiwa.

For rooftop solar PV with a capacity greater than 3 MW (three megawatts), this regulation requires users to provide weather forecast database settings that are integrated with the Supervisory Control and Data Acquisition (SCADA) system or distribution smart grid owned by the Holder of Electricity Supply Business License for Public Interest (IUPTLU).

“The regulation removes the obligation to pay parallel generation charges, i.e. capacity charges and emergency service charges previously applied to industry – equivalent to 5 hours per month. The elimination of this parallel charge adds to the attractiveness for industrial customers, but the obligation to provide weather forecasting for systems of more than 3 MW will also add to the installation cost component,” said Marlistya Citraningrum, Program Manager of Sustainable Energy Access, IESR.

Marlistya also highlighted the regulation of the term for submission of applications by prospective customers, which is carried out twice per year, namely every January and July.

“This arrangement and the determination of quotas per network system raise questions regarding the transparency of quota determination and approval, especially for industrial customers who want to install rooftop PLTS on a large scale, while the IUPTLU mechanism to add quotas when the system quota has run out is not clearly regulated in this regulation,” he continued.

This regulation guarantees that customers who have utilized rooftop solar power systems before this regulation is enacted, remain bound by the previous regulation, for the next 10 years. This includes still benefiting from the rooftop solar power export system.

“As an on-grid rooftop PV user, I actually have questions about this transitional rule – considering that during installation, rooftop PV exports are still calculated as equivalent to 0.65 of the electricity tariff based on Permen ESDM No. 49/2018, not 1:1 like Permen ESDM No. 26/2021. This transitional rule needs to be clearly informed to current rooftop solar power users,” said Marlistya.

IESR regrets that this regulation is too favorable to the interests of PLN, which can have an impact on hindering the participation of electricity consumers in supporting the government’s goal of accelerating Indonesia’s energy transition, efforts to reduce GHG emissions at low cost and not burdening the state because renewable energy investments are made by electricity consumers without the need for state subsidies.

Fabby Tumiwa hopes that this new regulation can be implemented by paying attention to the benefits obtained by the state if rooftop solar PV is allowed to grow rapidly, namely increasing renewable energy investment, growing the solar PV industry, creating jobs, and reducing GHG emissions. For this reason, IESR urges an evaluation after a year of the Ministerial Regulation’s implementation to determine its effectiveness in encouraging the utilization of renewable energy in Indonesia. The government needs to openly revise it in 2025 as the threat of electricity overcapacity faced by PLN in Java-Bali decreases.