Indonesia’s new law could make rooftop solar less attractive


Rooftop solar panels in Makassar, Indonesia. (Photo: iStock)

The Indonesian President Joko Widodo is amending regulations to prohibit the resale of excess electricity generated from rooftop solar panels to the state-owned electricity company, PLN (Perusahaan Listrik Negara). This move aims to alleviate PLN’s debt issues but has sparked controversy. Experts argue that this action is detrimental to the country’s renewable energy development and goes against policies to accelerate energy transition.

Fabby Tumiwa, the Executive Director of the Institute for Essential Services Reform (IESR) and the Chairman of the Indonesian Solar Energy Association (AESI), believes that the new regulations will increase operational and investment costs, reducing the willingness of small and medium enterprises or household users to install solar panels.

Before the revision, rooftop solar users could sell excess electricity to PLN and receive a reduction in their electricity bills. He stated that small and medium enterprises as well as household users consume more electricity at night than during the day. Therefore, prohibiting the sale of excess electricity to PLN would make installing these rooftop solar panels economically unfeasible for users.

The regulation of prohibiting the sale of excess electricity to PLN has been difficult to reach a consensus on, especially as it involves the state budget. However, the Director of Energy and Mineral Resources, Andriah Feby Misna, stated that all differences of opinion between ministries could be overcome after the new law is enacted.

In response to external criticisms that the new regulation is detrimental to energy transition, Andriah stated that the government would remove the capacity limit for rooftop solar installations to stimulate investment in the electricity industry.

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