Coal-dependent Indonesia is starting to exploit a huge solar energy potential


JAKARTA – Aji Tri Atmojo lives in a traditional Javanese house with wooden walls on the outskirts of Indonesian the capital of Jakarta, but his rustic home took on a modern feel after he installed a number of solar power panels on his roof.

Since setting them up in 2020 at a cost of 10 million rupiah ($ 702.25), he has halved his monthly electricity bill, and within five years, the investment should balance.

With a spread track record on renewable energy, Indonesia‘s energy mix is ​​still heavy dependent on coal but if early signs of a leap in the recording of solar power is sustained, it could have a transformative impact on Southeast Asia’s largest economy.

“Because almost all electricity production in Indonesia … comes from coal. This way (my family) can reduce greenhouse gas emissions, ”Aji told Reuters. Indonesia aims to get used to itself coal and become CO2 neutral by 2060 or earlier.

Despite being a tropical archipelago with 17,000 islands blessed with sunshine all year round, Indonesia rows last for solar power power capacity among the G20 nations.

But demand is starting to rise in the world’s fourth most populous country, driven by political change, a steep fall in prices of Chinese-made solar cells (PV) and environmentally conscious middle-class consumers like Aji, an engineer at a dairy company.

From the end of 2018 to November 2021, the number of private rooftop solar power panel users have increased more than seven times to around 4,500 with an installed capacity of 44 megawatts (MW), up from just 1.5 MW, according to state-owned power public electricity company (PLN).


That Indonesia Solar The Energy Association (ISEA) predicts installed capacity for roof terraces solar power panels can peak 1,000 MW next year and increase by between 3,000 MW and 5,000 MW per year from 2025.

“People are becoming more aware of the importance of renewable energy,” said Amarangga Lubis, co-founder of the Engineering, Procurement and Construction Company (EPC) SolarKita. “Since the pandemic, work from home has been established and the need for electricity in the home is increasing.”

Lubis predicts massive growth in solar power power installations over the next five years. “People want to be more picky and they want to invest in things that are more beneficial” to the environment, he said.

To be sure, solar power remains a smaller energy source in Indonesia, the world’s largest exporter of thermal coal used in power plants.

Coal powers about 60% of Indonesia‘s 73,000 MW electricity generation capacity compared to solar power‘s 180 MW, which incl solar power farms and private solar cells on the roof.

But, Indonesia have potential to 400,000 MW of solar power power, has its energy ministry predicted.

Falling prices for Chinese PV cells have driven the rise in private installations since solar power power made from the panels is cheaper than power sold from PLN.

The systems from Western countries, which were the only ones previously available, were also 10 times more expensive, said Ilham Rizky, founder of solar power Batara Energy Installer.

New financing methods, such as solar power panel leasing to commercial users, has also helped companies invest in solar power, said Solarwe are Lubis.


Regulatory changes have also spurred growth, with PLN reducing its minimum energy taxes at the end of 2019, reducing the amount of time to solar power users to have their installation costs covered.

Commercial solar power users can also fully export their surplus power to PLN from August, up from only 65% ​​previously, and they can participate in one Indonesian carbon market expected to be launched in 2025.

These changes, as well as agreements by multinational companies to limit carbon emissions, mean higher solar power demand from companies, factories and commercial buildings in the coming years, said Fabby Tumiwa, ISEA’s CEO.

In addition to commercial demand, Tumiwa also expects at least 2% of PLN’s 77 million household customers to show up. solar power PV cells for the next three to five years. – Reuters

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