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Using Solar PV, Commercial and Industrial Sector Play a Strategic Role Reaching Target of 23% Renewable Energy

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Semarang, 6 October 2021With the technical potential of solar energy reaching 193–670 gigawatt peak (GWp), and the potential for generation from solar power plants of around 285–959 terawatt-hours (TWh) per year, the Central Java Provincial Government is earnestly encouraging the use of solar PV. Increasing consumer awareness of environmentally friendly products, the availability of regulations, and a supportive ecosystem, as well as the benefits of using PV mini-grid is gravity for the commercial and industrial sectors to install PV mini-grid. The more industrial sectors involved in the utilization of solar PV will be the catalyst for the fulfillment of Central Java Solar Province and the achievement of the national renewable energy mix target of 23% in 2025. 


Chrisnawan Anditya, Director of Various New Energy and Renewable Energy, Directorate General of New, Renewable Energy and Energy Conservation, Ministry of Energy and Mineral Resources said that until August 2021, there were 4,133 rooftop solar PV users in various sectors in Indonesia with a total capacity of 36.74 MWp. Based on these data, the number of solar PV rooftop users in Central Java and DIY is the third-largest in Indonesia (5.88 MW). The Indonesian government through the Ministry of Energy and Mineral Resources itself has tried to accommodate the needs of the industrial and commercial sectors in installing rooftop solar panels with several strategies, including a clause on reducing parallel capacity costs for industrial customers from 40 hours to 5 hours per month which has been in effect since 2019.


Chrisnawan added that the role of various parties, including the commercial and industrial sectors, is crucial for the achievement of Indonesia’s climate targets, while encouraging the competitiveness of green operations and products.


“The commercial and industrial sectors will face global challenges in the future, especially if the European Union implements a carbon border tax in 2026. In the future, the economy will grow towards a green economy supported by a green industry. RUPTL currently contains 51% of the power plants to be built are new and renewable plants. In its transition period, the industry is encouraged to balance it with the use of rooftop solar power plants,” he explained in a webinar organized by IESR with the Central Java Government entitled “Roof Solar Energy for the Commercial and Industrial Sector in Central Java” (6/10/2021).


Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR) revealed that the potential for rooftop solar PV in the industrial sector in Central Java and Yogyakarta reaches 3.5 GWp or 10 percent of the PV mini-grid market potential from industrial sector customers throughout Indonesia.


“The IESR market survey shows that there is a potential of 9.8% or 16 thousand businesses in Central Java to utilize rooftop solar power. To succeed the decarbonization efforts and climate control efforts, the industrial and commercial sectors can identify the needs and strategies for implementing the energy transition by having an energy transition roadmap, including the use of rooftop solar power plants and encouraging collaboration and synergy of various parties to create a supply chain to produce competitive green products,” explained Fabby.


Central Java itself, since declaring Central Java Solar Province in 2019, until mid-September 2021 recorded 48% (4.3 MWp of 8.8 MWp) of the total installed solar PV capacity coming from the commercial and industrial sectors. Supporting policy and regulatory packages have also been prepared, including the Regional Energy General Plan, the Central Java Provincial Energy, and Mineral Resources Strategic Plan, and the Governor’s Circular Letter for the use of rooftop solar power plants in government, public, commercial, and industrial buildings. However, in his opinion, the most important thing besides policies and regulations is market demand.


“Market demand (market-driven) due to global demands to reduce house gas emissions is effective in encouraging the industrial sector towards a green industry that uses renewable energy sources,” said Head of the Central Java Province Energy and Mineral Resources and Minerals Agency (ESDM), Sujarwanto Dwiatmoko.


“Several industries in Central Java have independently implemented green and sustainable industrial practices, including the use of renewable energy in the form of solar energy. The Central Java Provincial Government will continue to provide training support, certification facilitation, and green industry awards,” continued M. Arif Sambodo, Head of the Industry and Trade Office of Central Java Province.


At the same event, M. Irwansyah Putra, General Manager of PLN Central Java and DIY Distribution Main Unit, revealed that there are 20 businesses and industries that have installed rooftop solar power plants. The five highest rankings in terms of capacity, respectively, are PT Tirta Investama (2.3 MWp), CV Jaya Setia Plastik (0.48 MWp), PT Djarum (0.26 MWp), PT. Busana Rejeki Agung (0.17 MWp) , PT Busana Remaja Agracipta (0.15 MWp), and PT Prambanan Dwipaka (0.04 MWp).


“PLN certainly supports solar PV optimization by providing various facilities, such as easy access to information, billing systems, providing sufficient reserve margin, running a fair business scheme for consumers as well as PLN, preparing solar PV rooftop Total Solution service products,” said Irwansyah.


Experienced the direct benefits of using rooftop PV in his industry, Syaiful, Manager at CV Jaya Setia Plastik targets to increase the PLTS capacity from 0.48 MWp to 1.3 MWp to reduce electricity costs, especially during the day.


“Moreover, with the on-grid system, excess electricity can be exported to PLN, the cost of maintaining solar PV is also low, and this is proof of the use of environmentally friendly energy,” he said.


With investment costs still considered expensive, several solar energy developers in Indonesia have offered to install rooftop solar power plants with financing schemes other than direct purchases. With a performance-based rental scheme, for instance, the company does not need to invest upfront but has a long-term contract (15-25 years) with the developer for the production of electricity generated from the installation of rooftop solar power plants. Some developers offer leasing or installments over 5 years.

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