New energy rule a bane for rooftop solar systems – The Star Online

JAKARTA: A newly revised ministerial regulation makes installing rooftop solar panels at residential homes even less attractive for local users than it was before, while it saddles future adopters of the clean energy technology with complicated bureaucratic procedures.

“My electricity bill could be cut 70% by installing on-grid solar (system),” Anak Agung Bagus Putra Utama, a user in Bali, told The Jakarta Post.

“But with the export stipulation gone and the enactment of a quota, who will be interested?” he said, referring to the government’s newly approved revision to Energy and Mineral Resources Ministerial Regulation No. 26/2021 on on-grid solar systems and energy distribution businesses.

The revised rule scraps a previous provision that allows residential users of rooftop solar panels to sell their surplus solar energy to state-owned electricity firm PLN for a deduction on their electricity bill, thereby speeding up their return on investment.

The new rule, whose enactment date has not been announced, also introduces a quota system for on-grid solar installations based on the remaining quota on the PLN grid for a particular area.

According to the prevailing regulations, a customer can install solar panels with generation capacity that reaches up to 100% of their electricity consumption.

Bagus, who used to promote the use of solar panels via his social media account AjikOnline, criticised the quota system in the revised regulation, saying this would make it less effective in increasing solar adoption.

“The quota system is still unclear and lacks transparency (in terms of) its selection and calculation,” he said, wondering whether the quota would apply per substation or per region.

Agung Kayon, another user who has been providing solar power planning and installation services in Bali since 2015, said the new quota system meant uncertainty for users.

He also pointed out that it would be difficult for users to obtain information on the available quota and PLN’s technical capabilities, and that only the company would possess this data.

The regulation comes amid lackluster adoption of solar photovoltaic (PV) panels in Indonesia, which has solar potential of 3,295 gigawatts (GW) but only used 0.57 GW last year, according to data from the energy ministry.

The ministry’s renewable energy director Andriah Feby Misna said on Feb 5 that the capacity of rooftop PV systems “should be adjusted to the needs of the consumers themselves” and adhere to the PLN-approved quotas in each region, Bisnis.com reported.

The government pointed to a need to protect PLN from the risks of renewable energy intermittency as its reason for revising the rule.

The revised rule would also allow PLN to focus on addressing the electricity oversupply on Java and Bali due to the over-development of coal-fired power plants.

Fabby Tumiwa, executive director of the Indonesian Solar Energy Association said on Feb 6 that the new quota system would allow only a limited number of users to connect to the PLN grid, which had a fixed capacity.

This could present a problem in the future, he added, as PLN and the government might not update the quota for a particular region after it had been exhausted by users.

Meanwhile, new quota applicants would have to wait until the grid capacity had been expanded through means like network upgrades and building new transmissions, he said, which would require a long time to complete.

“It will lead to a waiting game where users and businesses cannot get electricity (from renewable sources),” said Fabby, who urged the government to design the quota system carefully to avoid discouraging solar adoption.

Bhima Yudistira, executive director of the Centre of Economic and Law Studies, lamented the new quota system, alleging that PLN viewed private and residential solar systems as rivals.

Indonesia had vast solar energy potential, Bhima said on Feb 6, but this would take ages to develop if it were left solely to the government, especially after the recently revised rule.

The new rule also eliminates net metering, a billing scheme that allows users to export excess daytime electricity to PLN to offset their evening usage, as residential customers typically consume 30% to 40% of their total electricity during the day and log heavy use at night.

For on-grid solar energy users, the previous regulation supported cheaper installation because they did not need to invest in costly battery storage and could instead offset their costs by selling electricity to PLN.

Fahmi, a solar energy user who built his own 500-watt off-grid rooftop solar system at his house in Bojonegoro, East Java, said that after the regulatory revision, he would now have to wait 15 years to break even.

His payback period could be as short as 5 years if he went on-grid, but this effort had been hampered by licensing delays.

“This (new rule) will definitely discourage people from installing solar panels,” Fahmi said.

“Most start small and (then) connect to the grid for economic reasons. It’s a shame there are incentives for electric vehicles but not for solar panels.”

Dendi Ramdani, head of regional industry research at Mandiri Bank said last Friday that the new quota system might indicate that the government was wrestling with electricity oversupply of from coal plants as well as its overly ambitious renewable energy targets with a short timeframe.

“Chasing the renewable energy goals will be tough in the next five years,” he said.

“Only when economic growth rebounds to 6% to 7% and electricity demand rises can we seriously pursue it again.”

The energy ministry did not respond to the Jakarta Post’s request for comments by the time of publishing. — The Jakarta Post/ANN

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