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Navigating Indonesia's solar development dilemma
The government faces a complex dilemma in providing affordable energy to everyone, which means coal, while aligning with the global transition to cleaner energy, such as solar.
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Hot stuff: A technician checks a solar panel on the rooftop of a house in Denpasar, Bali, on June 15, 2023. Indonesia has failed to take full advantage of its huge solar energy potential due to regulatory problems. (Biosolarfarm)
A striking problem looms over the rooftops of residential and business buildings alike in Indonesia’s big cities.
Febby, a typical middle-class employee who likes to plan for the future, started a project that uses sunlight for energy by installing solar panels on his roof, hoping to help the environment by using cleaner energy.
However, despite taking action, the rules and processes of state electricity company PLN have delayed his plans. Febby has been nine months without approval from PLN, which has made him lose hope and wonder if the promise to use solar energy instead of conventional energy will be fulfilled.
Febby is not alone. Many customers, including businesses, are stuck waiting painfully for months just to start the process of installing solar panels, primarily for on-grid projects. This is occurring even though the regulations of the Energy and Mineral Resources Ministry state that the issue should be resolved within 65 working days.
Consumers and enterprises are experiencing heightened frustration, particularly in light of the Association of Solar Energy Indonesia (AESI) urging expedited measures. Supporters of solar energy are grappling with disillusionment due to the significant gap between government commitments and actual outcomes.
The final nail in the coffin would be the unfavorable potential changes to Ministerial Regulation No. 26/202 regarding on-grid solar systems. If enforced, these changes would make installing and transitioning to solar energy extremely difficult and discouraging.
For instance, consumers would not be able to export and sell surplus solar energy to PLN (net metering), capacity charges would change for all customers (instead of only businesses), the process of approving solar installations would depend on PLN’s discretion, and the time frame for registering solar installations would become more stringent. Due to these unfavorable changes, the future of solar adoption seems bleak.
