Solar power plants (PLTS) in Indonesia have garnered significant attention following the establishment of the Cirata floating solar plant in Purwakarta Regency. Spanning 200 hectares, it is the largest solar plant in ASEAN, boasting a capacity of 192 Megawatt-peak (MWp).
This initiative is part of a broader movement to promote the installation of rooftop solar systems for both household and industrial use. Although the trend has only become visible in recent years, the concept of developing solar energy in Indonesia dates back to the 1980s.
Development and Change of Solar Power Regulations in Indonesia
Marlistya Citraningrum, Program Manager for Sustainable Energy Access at the Institute for Essential Services Reform (IESR), outlined the long history of solar energy development in Indonesia.
Prior to 2018, the board of directors of PT PLN (the state electricity company) had already issued regulations regarding the use of photovoltaic-generated electricity by PLN customers. These rules permitted rooftop solar installations to operate in parallel with the PLN grid and allowed for the export of excess electricity under a net-metering scheme with a 1:1 tariff ratio.
Marlistya noted that following the issuance of the Minister of Energy and Mineral Resources (ESDM) Regulation No. 49 of 2018—which governs the use of rooftop solar systems by PT PLN consumers—new rules were established. These regulations permitted grid-connected rooftop solar installations with a maximum capacity of 100% of the customer's installed power (measured by inverter capacity) and allowed for the export of excess electricity via net-metering at a 1:0.65 tariff ratio.
Additionally, the regulations introduced end-of-month offset calculations and allowed excess energy credits to be carried over for up to three months; they also outlined technical and licensing procedures and mandated parallel operation fees for industrial customers. “Essentially, that Ministry of Energy and Mineral Resources (ESDM) regulation could be considered the ‘original’ rooftop solar regulation. However, changes occurred in 2019; while rooftop solar installations previously required an operating permit, Ministry of Energy and Mineral Resources Regulation No. 12/2019 stipulated that installations under 500 kVA did not require one. Additionally, the parallel operation charge for industrial customers was reduced from 40 hours/month to 5 hours/month, and the emergency charge was eliminated,” explained Marlistya.
These rules spurred growth in rooftop solar installations between 2018 and 2020, with various factories beginning to install rooftop solar systems.
This growth led to the introduction of the latest regulation: Ministry of Energy and Mineral Resources Regulation No. 26 of 2021. This regulation permitted grid-connected rooftop solar systems across all service areas held by holders of the Public Electricity Supply Business License (IUPLTU). It set the maximum rooftop solar capacity at 100% of the installed power capacity (measured by inverter capacity), allowed the export of excess electricity via a net-metering scheme with a 1:1 tariff ratio, mandated offset calculations at the end of the month, and permitted the banking of excess energy for up to six months.
“Unfortunately, the regulation was only announced in 2022. When Ministry of Energy and Mineral Resources Regulation No. 26 of 2021 was issued, capacity installation limits of 10–15% (or lower) were actually imposed across Indonesia, and the electricity export tariff remained at 0.65, consistent with the old regulation. Consumers encountered these restrictions when applying for permits to install rooftop solar at their homes, receiving a response letter from PLN detailing the limitations,” said Marlistya.
Marlistya noted that these capacity restrictions were applied nationwide, prompting consumer complaints through industry associations. Consequently, 2022 became the first year in which rooftop solar development actually declined compared to the previous year. Citing 2023 data from the Ministry of Energy and Mineral Resources (ESDM), Marlistya noted that the number of rooftop solar (PLTS) customers grew from 609 in 2018 to 1,064 in 2019, 1,334 in 2020, 1,787 in 2021, and 1,667 in 2022. Regulations governing rooftop solar are based on ESDM Ministerial Regulation No. 26 of 2021.
ESDM Ministerial Regulation No. 26 of 2021—concerning Rooftop Solar Power Plants connected to the electricity grids of holders of Public Electricity Supply Business Licenses (IUPTLU)—has been in effect since August 20, 2021.
However, this regulation has not yet been implemented because the government is still assessing its potential impact on PLN's existing electricity supply system.
The key provisions of ESDM Ministerial Regulation No. 26 of 2021 are as follows:
The electricity export rate (kWh) has been increased from 65% to 100%;
The period for carrying over accumulated billing surpluses has been extended from 3 months to 6 months;
The application processing time for rooftop solar installations has been shortened (5 days without Power Purchase Agreement (PPA) adjustments, and 12 days with PPA adjustments);
An application-based service mechanism has been introduced to facilitate application submission, reporting, and program monitoring;
Opportunities for carbon trading derived from rooftop solar installations have been opened up;
A Rooftop Solar Complaint Center has been established to handle complaints from customers or IUPTLU holders; and
The scope of regulations has been expanded to include not only PLN customers but also customers within non-PLN business areas (served by IUPTLU holders).
On Monday, February 5, 2024, President Joko Widodo approved the revision of the Ministry of Energy and Mineral Resources (ESDM) Regulation No. 26 of 2021 concerning Rooftop Solar Power Plants (PLTS) connected to the electricity grids of holders of Public Electricity Supply Business Licenses.
The revision stipulates that any increase in PLN's Basic Cost of Production (BPP) resulting from this arrangement will be borne by the state, subject to negotiation.
Going forward, the electricity capacity generated by rooftop solar systems will be tailored to consumer needs. However, quotas will still be established by PLN, subject to approval by the ESDM Directorate General of Electricity and review by the ESDM Directorate General of New and Renewable Energy and Energy Conservation (EBTKE), for each system within a given region.
Regulations regarding solar power plants in Indonesia are evolving in tandem with the growing interest in and demand for new and renewable energy, particularly through the utilization of solar power.