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Indonesia is geographically located at the equator and boasts abundant solar resources with its average Global Horizontal Irradiance (GHI) surpasses China and Singapore. However, solar power generation in Indonesia accounts for less than 1% of the nation's total electricity production. Some venture capital firms believe that Indonesia's photovoltaic potential is underdeveloped and estimate annual demand could reach as high as 36 GW, which is seven times the total investment from 2018 to 2021.
Currently, Indonesia relies primarily on fossil fuels for electricity, with coal-fired power plants making up about 60% of the energy mix. The local government is working to retire these high-carbon-emission power plants ahead of schedule, which will create a significant energy gap. Helen Wong, a managing partner at AC Ventures in Indonesia, stated that excessive investment in coal mines has resulted in an oversupply of cheap electricity.
