Roofs of residential and commercial buildings in Indonesia's major cities face incredible challenges.
Phoebe, a typical middle-class worker who likes to plan for the future, has started a project to use sunlight as energy by installing solar panels on the roof of her house to help the environment by using green energy.
But despite the measures taken, PLN rules and procedures put these plans on hold, leaving Phoebe without a PLN permit for nine months, leaving her worried whether her promise to use solar power as opposed to conventional power would be fulfilled. Phoebe is not alone.
Many customers, including businesses, have to wait months to start the process of installing solar panels, especially on-grid projects. Consumers and companies are facing frustration, especially after the Indonesian Solar Association called for urgent action. Solar advocates struggle with frustration at the wide gap between government promises and actual results.
The end result is that there may be negative changes in Ministerial Regulation No. 1. 26/202 in On-Grid Solar Systems. If these changes are implemented, installing and converting to solar power will be extremely difficult and frustrating.
For example, consumers can no longer export and sell solar energy through PLN (net metering), capacity tariffs for all consumers (not just companies) will change, and the approval process for solar installations depends on PLN's policy and timing. Registration of solar power plants will be strict.
Due to these unfortunate changes, the future of solar energy looks bleak. Net metering changes have direct economic consequences, making solar power less attractive.
Policies that allow the sale of excess energy from solar panels have been shown to dramatically increase solar use, as seen in Brazil, where rates increased 110-fold in six years.
While other countries are starting to adopt sun-friendly regulations, Indonesia is doing the opposite. Abolishing net metering has hurt Indonesia's solar panel industry. Apart from regulation, Indonesia has not made significant changes in terms of investment. For example, the government is investing US$113 million (RM526 million) in the electric car industry by 2023.
In contrast, the solar sector will see a relatively small increase of $1 million in 2022 through various tax incentives, including tax credits and tax credits. This gap shows that government support for clean energy is limited to certain groups. A lack of investment and unfavorable regulations mean that only 213 megawatts of Indonesia's 2025 target of 35 GW will be achieved, which includes the installation of rooftop, floating and shore-based solar panels for power generation. One of the biggest challenges in going solar is financing. In Indonesia, there is a lot of uncertainty about who is responsible for funding, because the transition to solar energy involves risks that no one wants to take.
Without such commitment from the government, the private sector may not be willing to invest. Lessons from other countries show that governments can play an active or passive role in this regard. But the Indonesian government's reluctance to take the first big step is understandable. The country's heavy dependence on coal as a major source of energy has been a major obstacle. Coal as an energy source has grown from 54 percent in 2016 to 67 percent in 2022.
Rakmat Fatoni is a senior consultant at Mandala Consulting, a policy advocacy firm. The opinions expressed here are those of the author.
