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Jakarta Post

New solar panel regulation discourages public use

  • Stefanno Reinard Sulaiman

    The Jakarta Post

Jakarta   /   Fri, February 22, 2019   /   11:16 pm
New solar panel regulation discourages public use Engineers working on solar panels. (Shutterstock/File)

The government has been criticized for issuing a regulation on photovoltaic solar panels, which has discouraged homeowners and businesses from installing and using the environmentally friendly energy source.

Instead of allowing consumers to enjoy lower electricity bills, the regulation has forced them to pay more, according to the Indonesia Rooftop Photovoltaic Users Association (PPLSA).

PPLSA chairman Yohanes Bambang Sumaryo said the electricity bills of his association members had jumped 50 to 100 percent.

"The new regulation on electricity export-import has caused our electricity bills to soar by up to 100 percent. It makes the PV solar panels for residential use unattractive,” he said recently.

The regulation is Energy and Mineral Resources Ministerial Regulation No. 49/2018 on the utilization of rooftop solar panels for state electricity company PLN customers in homes or in industry.

Under the regulation, PLN only pays for 65 percent of the electricity produced by a solar panel. For example, if one panel produces 100 kilowatt hours (kWh), PLN only pays for 65 kWh.

Given the unfair stipulation, Yohanes said, some association members had decided to go “off-grid” by disconnecting from PLN.

“They’ve taken the decision regardless of loss and they are not reporting to PLN either. Even though we have to invest more to realize it [using the off-grid system],” he said, referring to the additional investment required to buy new batteries to store the electricity once a user goes off-grid.

He said around 300 homes had decided to go off-grid.

Based on PPLSA estimates purchasing a battery could increase the total cost of installation by around 50 percent.

Moreover, Yohanes said the obligation to report to PLN for those who wanted to install solar panels in their homes also discouraged potential users.

“The requirement is that only certified photovoltaic suppliers or service firms can submit the permit to install PV panels to PLN,” he said, adding that there were fewer than 10 such companies across the country.

In short, solar PV panel owners who wish to sell electricity to PLN must get approval from the state utility on administration and technicality issues.

They then must obtain a certificate indicating that the installation is good to operate (SLO), which is issued by a state electricity inspection institution (LIT).

Besides the hassle of the administration process for using solar PV panels, there is also the high interest rate charged by banks to finance the purchase of the solar panels, says Yohanes.

“High interest rates for the commercial sector of around 10 percent are a disincentive for customers looking to buy rooftop solar panels,” he added.

Previously, Miroslav Dijakovic, the deputy for renewable energy from the European Business Chamber of Commerce in Indonesia (EuroCham), said the regulation still did not accommodate small customers of PLN.

“This is not the best deal for current PLN small customers,” he said in an e-mail.

However, he noted an improvement in that PLN’s business customers are included in the regulation. “But it's welcome that now we can export no matter what size the solar rooftop system, and PLN business customers are included,” he added.

Responding to the criticism, the Energy and Mineral Resources Ministry defended the regulation, saying it would keep the regulation in place for at least a year and then the ministry would evaluate the implementation.

The ministry’s directorate for renewable energy Rida Mulyana said the association should only compare the current electricity bills with the situation when they were not using solar panels at all.

“It’s true that the electricity bill will be higher. However, our survey found that a lot of people want to install solar panels [since the ministerial regulation issuance],” he said.

Under the previous regulation, PLN would pay the full amount for power produced by solar panels, not 65 percent.

Regarding the complaint on the “hassle” of installing solar panels, Rida said the government needed to ensure the safety of any installation by only accepting certified solar panel suppliers.

“If the association complains about the lack of certified suppliers then it should work on it, see it as an opportunity to do business,” he said.

Based on the latest government data, the country has only installed 0.09 gigawatts peak (GWp) of solar PV power plant or 0.02 percent of the total potential installed capacity of 207.8 GWp.