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Why Indonesia struggles to tap its solar energy potential

Why Indonesia struggles to tap its solar energy potential

Indonesia has about 208 gigawatt solar energy potential, but in 2019 has only installed about 0.05 per cent of its capacity. (Photo: Suhendri)

JAKARTA: Opened to the public in 1978, Jakarta’s Istiqlal Mosque was built to commemorate Indonesia’s independence.

But over the years, the biggest mosque in Southeast Asia has become more than just a symbol of independence.

It also represents tolerance and pluralism in Indonesia, as it was built by a Christian architect and stands just across Jakarta’s cathedral. World leaders such as Angela Merkel, Narendra Modi and Barack Obama have visited the mosque.

A recent major renovation is sending yet another important message to the world: renewable energy and climate change. There are now 504 solar panels that have been installed, generating an equivalent of 150,000 watt-peak (Wp).

“They help to save our monthly electricity usage,” said Suhendri, the mosque’s technician who like many Indonesians goes by one name.

Jakarta's Istiqlal Mosque has installed 504 solar panels which are equivalent to 150,000 watt-peak. (Photo: Suhendri)

While solar panels on mosques or houses of worship are still relatively rare in Indonesia, the Jakarta government pledged last year to install more solar panels in the city, especially on government buildings and schools.

The step was taken in line with the need to combat climate change and reduce illnesses caused by Jakarta’s notorious air pollution.

Launching Jakarta's clean air initiative in September, city governor Anies Baswedan said: "Experts estimate that air pollution has caused over 5.5 million cases of air pollution illness in Jakarta every year. That is nearly 11 cases every minute ... In recognition of the importance of clean air, I issued the governor instruction number 66 in July last year which put in place seven solutions the Jakarta government has to do for clean air." 

"Among the solutions, we strive to install more solar panels in government buildings, accelerate the development of mass rapid transit as well as increasing the use of clean energy for transportation," he added.

READ: Commentary: Indonesia’s clean energy ambitions hit fresh obstacles

Back in 2017, the Indonesian government initiated a movement called The National Movement of One Million Solar Roofs to encourage buildings to use solar energy.

These are all measures taken to ensure Indonesia can reach its target to use 23 per cent renewable energy by 2025 while cutting emissions by as much as 29 per cent by 2030.

But despite various efforts, solar energy adoption is still low in Indonesia.

Experts interviewed by CNA said financial constraints and inconsistent policies are the main reasons. However, they still believe in the potential of solar energy in the archipelago.


Lying on the equator, Indonesia has abundant sources of solar energy, said Satrio Swandiko Prillianto, Greenpeace Indonesia Renewable Energy Campaigner.

There is about 208 gigawatt (GW) of solar energy potential in the country. But in 2019, only about 100MW, or 0.09 per cent of its potential has been installed, said Mr Prillianto.

The energy density is on average 4.8 kWh/sq m/day.

Mr Fabby Tumiwa, executive director of energy and environment think tank Institute for Essential Services Reform (IESR) said that according to existing data, the intensity of solar radiation in Indonesia is "quite good". He added that some countries in Europe only have half of the intensity.

A view of state-owned oil giant Pertamina's refinery unit IV in Cilacap, Central Java, Indonesia, Jan 13, 2016. (File photo: REUTERS/Darren Whiteside)

To better understand the issue, it is useful to revisit the development of Indonesia's energy market and policies, said Mr Tumiwa.

In the 1980s, Indonesia’s energy mix was heavily reliant on oil and gas.

“At that time, we were an oil producer. We exported it and used it for domestic consumption. In the 80s there were not a lot of vehicles like today,” he said. 

“So it was enough for domestic consumption, including for energy use.”

Over time, technology evolved and the government started to introduce coal because it realised it had coal reserves. Indonesia also became a coal exporter.

In the 1990s, the country saw a decline in its oil and gas reserves but the use of vehicles increased. Thus, coal became the dominant energy source locally.

READ: Jakarta residents sue Indonesia government over air pollution

“This pattern persisted. And in the 90s, (early) 2000s, renewable energy technology such as solar energy was still very expensive," Mr Tumiwa recounted.  

Today, Indonesia is among the world's top coal producers. In fact, it is the world's second-biggest coal exporter after Australia.

“The price of solar cell technology only became cheaper during the last ten years. Previously it was very expensive,” Mr Tumiwa noted. He added that in Indonesia's case, solar cell technology only became affordable around five years ago.


The current price of a solar module in Indonesia is at around 3.5 million rupiah (US$235) per kilowatt.

Depending on the location, size and quality of the inverter, installing a solar system may cost around 14 to 20 million rupiah per kW.

The head of Indonesia’s Association of Solar Energy (AESI) Andhika Prastawa said that financial constraint is a reason why solar energy has not been widely used in the country.

“There are limited government projects because of a limited budget, and the same goes for projects of state-owned electricity company PLN," he said.

Mr Prastawa explained that the projects are constrained by the price of the solar power plants which cannot compete with the tariff imposed by PLN. Independent power producers have also difficulties growing because the relevant regulation requires that their electricity selling price is 85 per cent of PLN's cost of production, he added.

Mr Prillianto, the energy campaigner, also said that solar technology is not as competitive in terms of pricing and market incentives.

“First, we shall divide the system into large scale solar and private solar. In large scale solar, the current policy, Ministry Law No. 4/2020, the price cap of 85 per cent from the local average electricity generation base cost is above the national, it is somehow unappealing for independent power producers.

“In private solar, the current policy, Ministry Law No. 16/2019, again, the price cap of 65 per cent of electricity feed to the grid, is unappealing for private consumers. Thus the market is not developing well in recent years,” he said.

An Indonesian power plant A fisherman takes a rest as the state power plant is seen in the background in Jakarta. (Photo: AFP)

Meanwhile, Mr Tumiwa of IESR posited that solar energy adaption in Southeast Asia’s biggest economy is still low because people argue they need power plants that can operate 24 hours.

Only thermal energy such as coal and hydropower meet this requirement as solar energy can only be used throughout the day if energy is stored in a battery. This technology is still expensive in Indonesia, he added.

Some also argue that is it advantageous to continue using coal because the power plants already exist in many regions of Indonesia.

READ: Indonesian coal plant taints South Korea's green pledge

Mr Tumiwa added that the dependency on coal has made it harder for the government to pivot towards renewable energy.

“Coal has become a commodity. It can be mined, exported or used domestically. So, there is an advantage for the mine owners and also for the country because they (the miners) pay a royalty fee and tax. While with renewable energy, there is no tax. Sunlight is free,” he said.  


Nevertheless, the government claims it is still committed to increasing the adoption of solar energy.

The Ministry of Energy and Mineral Resources is optimistic that it can achieve the target of one million installations of Rooftop Solar Power Plants since the global price has now become more competitive.

When the initiative was launched three years ago, there were 268 consumers of rooftop solar power plants nationwide and by mid-2020, the number of users has increased to 2,346. 

"This movement is very supportive of the target to use 23 per cent of new and renewable energy by 2025," said the Director-General of Electricity Rida Mulyana during a virtual Reflection on the Third Year of the One Million Solar Roofs National Movement on Sep 24.

READ: Indonesia's B30 biodiesel plan a boost to domestic palm oil consumption

Furthermore, the Director of Energy Conservation Hariyanto said that the Ministry of Energy and Mineral Resources is currently consolidating a list of buildings where solar panels could be deployed on the roof.

"We are not only listing residential buildings but also commercial buildings, such as hotels, hospitals, office buildings, airports, ports and warehouses. So far, there is quite a large potential for rooftop solar," said Mr Hariyanto during the same event.

File photo of the business district in Jakarta, Indonesia, May 2, 2019. (Photo: REUTERS/Willy Kurniawan) FILE PHOTO: A general view shows the business district in the capital Jakarta, Indonesia, May 2, 2019. REUTERS/Willy Kurniawan/File Photo

Mr Agung Murdifi, PLN's Executive Vice President for Corporate Communications also reiterated the company's commitment to use green energy.  

"PLN is committed to continuing to encourage the use of renewable energy. Solar power plant is one of it. A total of 7,992 MW capacity of renewable energy has been installed so far. 

"As part of our commitment, PLN has successfully signed a contract to build a floating solar power plant in Cirata (West Java) with a capacity of 145 MW. This solar power plant will be the largest in Southeast Asia," Mr Murdifi told CNA.

The construction of the floating solar power plant is planned to start in 2021.

READ: Construction begins on Tengeh Reservoir floating solar farm, touted as one of world’s largest

However, Mr Prastawa of AESI said the government needs to do more.

It needs to push for a renewable energy law which will make the use of it mandatory, he said.

The government also needs to issue regulations that will allow renewable energy to develop rapidly by easing of licensing, providing incentives and banking regulations to finance renewable energy, among others.

“Politically, renewable energy must become the mainstream of national energy development,” Mr Prastawa said.

“At the moment, the mainstream of energy development is energy that is equitable to society, which is translated as the provision of affordable or cheap energy, and it does not question the source of it. So, of course, fossil fuel will be superior compared to renewable energy.”

Mr Prillianto of Greenpeace added that the society can play a role.  

“Solar panels could be installed in big capacity or in small scale like private houses. So, even individuals could contribute to increasing the installed capacity of solar energy in Indonesia's energy mix.

“Vietnam, for example, managed to add about 5.5GW installed solar capacity in two years.”

READ: COVID-19 has prompted stimulus measures, but Southeast Asian governments may be missing the chance to go green, say experts

Mr Prillianto said this may be the best solution amid the COVID-19 pandemic which has become a health and economic crisis.

“The government should try to develop solar energy as a way to recover from the economic crisis. It is a pathway towards a greener future and the government should see this as an opportunity.”

Source: CNA/ks(aw)


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