Solar PV and Cooperatives Combined to Achieve Energy Democracy

Jakarta, 24 June 2021, IESR survey shows that more people are interested in adopting rooftop solar power plants, especially if an attractive financing scheme is available. It will be a huge opportunity to expand the rooftop solar PV market answering the challenges of the climate crisis on a practical level done individually by transitioning to renewable energy.

The urge to develop renewable energy to protect the earth from rising temperatures above 1.5 degrees C, especially by utilizing solar PV has been started in 2017, through the National Movement of One Million of Solar Rooftops (Solar Archipelago).  IESR together with 13 other institutions initiated this movement. The target of this movement is to achieve 1 GW of rooftop solar PV in Indonesia by 2020, assuming one house installs 1 KWp of rooftop PV. Compared to the potential of solar power in Indonesia, whose official number is 207 GW, but the actual technical potential is way bigger up to 20.000 GW according to IESR, the 1 GW target is a small target.

“This target was made as a benchmark, considering that at that time there was no ministerial regulation, nor a market that looked potential. When we reach 1 GW, it means that there is a combination of supportive regulations, reliable EPC companies, and a mature market. So this target is not only to install 1 GW of solar PV rooftop but also to fight for the supporting ecosystem,” explained Marlistya Citraningrum, IESR’s Sustainable Energy Access Program Manager, in an online workshop entitled “Cooperatives as Agents of Change in Financing Climate Change Mitigation and Adaptation”.

The initiation of Solar Archipelago projects missed their target in achieving 1 GW of rooftop solar in Indonesia’s residential area, however, there has been a rapid increase in terms of the number of rooftop solar PV users.

“When this initiative was launched, there were around 200s new rooftop solar PV customers. Currently, there are around 3000s households of PV mini-grid. It has not reached the target of one million roofs, but there is a significant increase,” said Marlistya

The increase in PV mini-grid customers indicates that the interest and information received by the public about this technology is increasingly widespread. Since 2018 IESR has conducted market studies in the following cities, Greater Jakarta, Surabaya, seven cities in Central Java, and three cities in Bali. The survey shows that there are various potential PV mini-grid markets in each of these cities.

In Jabodetabek 13% of respondents fall into the category of early followers and early adopters. This group is respondents who have knowledge of rooftop PV and are financially able to afford it. This group only needs comprehensive information covering PV mini-grid technology, installation procedures, as well as service providers for rooftop PV installations. This group of early followers and early adopters is quite large in various cities, 19% in Surabaya, 9.6% in Central Java, and 23.3% in Bali.

Another interesting thing about IESR’s market survey is that the issue of price is still the second most frequently asked question by potential consumers. Questions about savings are the most frequently asked questions by potential customers. This phenomenon shows that price is still the main consideration for prospective solar PV customers.

The attractive rooftop solar PV mini-grid scheme is an opportunity for financial institutions, including cooperatives.

“At least, there are 3 opportunities that can be taken by cooperatives to participate in this rooftop solar PV scheme. First, by collaborating with EPC companies and providing financing schemes. Of course, you need to choose a trusted EPC company. The second is by selling solar panels as well as providing a financing scheme. Third, providing a financing scheme as well as after-sales service,” explained Marlistya.

Attractive and affordable financing schemes for PV mini-grid are still difficult to find at this time because currently EPC companies just work with banks. Of course, this should be seen as an opportunity for cooperatives to develop their programs.

Closing the first session of the morning workshop, Fitrian Ardiansyah, chairperson of the Sustainable Trade Initiative Foundation, stated that the financing of rooftop solar power plants would be one of the business niches for cooperatives.

“The green economy is aggregated at the local community level, cooperatives are the right financial institutions to pick up the ball at this opportunity,” he said. 

Beyond 207 Gigawatts : Accelerating solar development in Indonesia

Seeing the need for an update for solar power technical potential in Indonesia, the Institute for Essential Services Reform (IESR) with technical support from the Global Environmental Institute (GEI) conducted a nationwide geographic information system-based (GIS-based) solar photovoltaic (PV) technical potential assessment in the country.

Technical potential estimates represent the achievable electricity generation potential (terawatt-hours), including its capacity potential (gigawatt-peak) and suitable land area (square kilometers), given the topographical (geographical) and land-use constraints as well as PV system performance. The technical potential is different from economic or market potential, as it does not consider projected costs and policy and regulatory limits (other than those related to land-use), and thus, do not represent the level of the generation that might actually be deployed, but rather an upper-boundary estimate of development potential. Using publicly available GIS data, this report covers both national- and provincial-level results of Indonesia’s spatial analysis and focuses on large-scale (utility-scale) ground-mounted solar PV applications.

The analysis of this report is the first step of a series of activities to assess potential solar PV projects in Indonesia and provides an overview of national solar power potential before zooming in to the potential regions. The estimation of the technical potential starts with first assessing the suitable areas and terrain for solar PV development. Then, by considering the solar resource potential in the areas and taking some technology-specific assumptions, the technical potential can be calculated. Several constraints to determine the suitable areas include certain terrain features (e.g., ground slope), protected areas, land-use restrictions, water bodies, and others.

Our findings show that Indonesia’s solar PV technical potential ranges between 16 to 95x larger compared to the current national estimates by the Ministry of Energy and Mineral Resources (MEMR), which is 207 GW (see Table 4).

As the assessment goes into provincial and cities/regencies level, the findings can be used to inform policymakers, PLN, business players, and other relevant stakeholders to accelerate solar development in Indonesia, starting by updating Indonesia’s solar potential figure and identifying potential solar projects across the country.

Here are some of the key recommendations that policymakers and PLN could do:

  1. The government could update their nationwide solar technical potential figure, to reflect the more detailed potential for solar energy development in Indonesia. The current assessment shows Indonesia’s solar potential is higher (16 to 96x) than the current official figure (207 GW) and it has the potential to supply Indonesia’s future energy demand.
  2. The municipal government and its respective PLN’s regional office could work together on identifying prospective locations in their jurisdictions. Case studies such as for Bali and Sumba could be entry points to more detailed planning. Assessment should include current and projection of electricity supply and demand in the area, grid study, financing needs, as well as related policies and incentives.
  3. Further technical assessments can be conducted, particularly to zoom in on specific locations at the cities/regencies level and even smaller, not only for utility/large-scale solar but also for floating solar and rooftop solar.