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. 

Supported by IESR, Central Java Provides Attractive Opportunities For The Community To Install Rooftop Solar PV

Semarang 16 Februari 2021 – The Central Java provincial government, through the MEMR (Ministry of Energy and Mineral Resources) Office, in collaboration with the Institute for Essential Services Reform (IESR), held a webinar on Central Java Solar Day 2021 (16/2). This event, presenting the Governor of Central Java, represented by the Acting Regional Secretary of Central Java Province, Prasetyo Aribowo, Dadan Kusdiana Director-General of EBTKE, Ministry of Energy and Mineral Resources, Sujarwanto Dwiatmoko, Head of the ESDM Office of Central Java Province, Manager of Revenue Assurance & Trading Mechanisms, M. Khamzah representing GM PLN UID Central Java and DIY. Also attending were Fabby Tumiwa – Executive Director of IESR, Chairiman VP Residential Market ATW Solar, and Karyanto Wibowo, Sustainable Development, Director Danone. 

On this occasion, several stakeholders explained that there is a great opportunity available for Central Java to seize the big goals i.e: to be the first solar province in Indonesia. Central Java Solar Province was initiated in 2019, the webinar is also meant to track the progress of the initiative.

Consistently, the Acting Regional Secretary of Central Java Province, Prasetyo Aribowo, who delivers the Governor of Central Java’s remarks, revealed that the regional government continues to support the efforts to meet the renewable energy mix target stated in the Regional Energy General Plan (RUED).

Dadan Kusdiana said that Solar PV is one of the priority solutions for fulfilling the clean energy mix by 23% in 2025 while reducing greenhouse gas emissions by 29% in 2030. He said that this is his concern in preparing a grand national energy strategy, to achieve an energy mix target of 23% by 2025.

“We only have five more years to go, so if renewables are not achieved, surely the target of reducing greenhouse gases will not be achieved,” he said.

Dadan also explained that to attract public interest to install rooftop solar PV, currently, the Director-General of EBTKE is revising MEMR Regulation No. 49/2018, especially for 3 main points: improving net-metering rates, extending the reset of electricity exports, and accelerating the provision of export-import (Exim) meters.

Executive Director of IESR, Fabby Tumiwa, in his presentation, explained that based on the studies that have been conducted by IESR, the potential for solar energy development in Central Java is high, both for ground-mounted PV as well as for floating PV.

“According to the Ministry of Public Work and Public Housing Regulation No. 6/2020 that part of the reservoir area can be used for floating PV, we see that the technical potential of floating PV can reach more than 700 MW if the 10 largest reservoirs in Central Java are also used for floating PV mini-grid, “said Fabby. 

Head of the Central Java MEMR, Sujarwanto Dwiatmoko, explained that despite the difficult situation due to the outbreak of Covid-19, Central Java in 2020 managed to exceed the target of the renewable energy mix, from the target of 11.60% to 11.89%. In 2025, Central Java has set a renewable energy mix target of 21.35%.

He emphasized that in the future, “Central Java Solar Province” should not just be a slogan, but to achieve the highest possible results. One of the ways that his office will encourage in 2021 is by opening a consultation room for those who are interested in installing rooftop PV.

Sujarwanto also targets that the industrial and commercial sectors will be the main target to develop rooftop solar power plants. To make the investment cost for the rooftop PV more attractive, Sujarwanto encourages various financial institutions to get involved and explore the potential of a zero Capex financing scheme, or without the initial investment cost with soft credit. 

“To support the national government program of battery-based electric motorized vehicles (Kendaraan Bermotor Listrik Berbasis Baterai – KBLBB), we also plan to build a charging station from solar PV in a hybrid manner,” he said.

Furthermore, he said that for 2021, the development agenda would focus on economic recovery after Covid 19 through the construction of roof-top PV at MSMEs and Islamic boarding schools. The construction of the rooftop PV 2021 will be carried out in 31 units in around eight districts/cities in Central Java.

Muhammad Khamzah from PLN UID Central Java and DIY also gave an illustration of the distribution of rooftop PV users in Central Java, which are generally dominated by households in the R2 class (customers of 2200 VA and above). PLN UID Central Java and DIY are trying to accelerate the process of customer requests to use grid-connected solar rooftops and supply export-import kWh.

Industrial customers such as Danone are one of the groups that have a great interest in using renewable energy, including rooftop solar power plants. Karyanto Wibowo underlined the commitment of various multinational companies to use 100% renewable energy in a certain year. Many of the RE100 members also have operational facilities in Indonesia, so the government must also look at this condition in planning and adjusting the electricity system. 

According to Chairiman from ATW Solar, product knowledge from prospective users determines the level of adoption of the rooftop PV, so service and product providers (EPC companies) must ensure to build public awareness and that the quality of the product offered is assured. Comprehensive information regarding benefits, costs, and maintenance, and operational certainty are important factors for users to install roof-top PV mini-grid. The portal is an IESR initiative that is expected to be able to answer the imbalance of information for the public about solar energy in general and rooftop PV in particular.

Considering that Indonesia has a target to achieve a renewable energy mix of 23% by 2025, the penetration of rooftop solar is important because this is the most strategic way to do it at this time. Collaboration from various parties supported by clear policies and regulations will accelerate the penetration of solar energy in the national energy mix.