10-Feb-2022 | Market Research Store
Indonesia's electricity supply is still largely reliant on coal, despite a small track record on renewable sources. However, if early signs of a surge in solar adoption are supported, it could have a significant effect on Southeast Asia's largest economy.
Indonesia intends to transition away from coal source energy and become carbon-free by 2060, if not sooner. Even with a tropical archipelagic country of 17,000 islands graced with year-round sunlight, Indonesia ranks last out of G20 countries when it comes to solar power capacity. However, changes in policy, a significant decline in the cost of Chinese-made photovoltaic panels (PV), and environmentally aware middle-class users such as Aji, an engineer at a dairy company, are driving up requirements in the world's fourth most populated nation.
As per the government power utility Perusahaan Listrik Negara, the number of independent rooftop solar panel customer has about sevenfold increased from 2018 to around 4,500, with an installed capacity of 44 MW, slightly higher compared to 1.5 MW (PLN).
MOUNTING ELECTRICITY REQUIREMENTS
According to the Indonesia Solar Energy Association (ISEA), installed volume for –roof-mounted solar panels can reach up to 1,000 MW next year and increase by 3,000 MW to 5,000 MW each year beginning in 2025.
"Citizens have become more aware of the significance of renewable energy," stated “Amarangga Lubis, co-founder of SolarKita. "Since COVID-19 pandemic, a work-from-home tradition has emerged, and domestic electricity consumption is increasing."
Lubis predicts that solar power implementations will skyrocket within next 5 years. "Users will be pickier, and they will invest in things that are more environmentally beneficial," he predicts.
To be sure, solar energy is still a minimal supply of energy in Indonesia, which is the world's largest exporter of thermal coal used in power plants.
Coal accounts for approximately 60 percent of Indonesia's 73,000 MW of energy production capabilities, while solar accounts for 180 MW, which involves solar farms and personal rooftop PV cells. Indonesia, on the other hand, has the capacity for 400,000 MW of solar energy, according to the country's energy department.
Reducing prices of China-made PV cells have boosted the private installations, as power generation by the solar panels is less expensive compared to power marketed in PLN.
Western structures, which were earlier the only things available, were also significantly more costly, according to Ilham Rizky, founder of the solar installer Batara Energi.
According to Solarkita's Lubis, innovative financial methods, such as solar panel leasing for commercial users, have also aided companies in investing in solar systems.