The Current State of Solar Energy in Indonesia

The Current State of Solar Energy in Indonesia

Sandra Morales
May 21, 2024 0 Comment

Indonesia, an archipelago with abundant sunlight, has significant potential for solar energy. Yet, despite this potential, the development and utilization of solar power in Indonesia have been relatively modest compared to its renewable energy resources. Below are four key facts about solar energy in Indonesia:

1. Solar Energy Potential

Indonesia is located near the equator, giving it high solar insolation levels of about 4.8 kWh/m²/day on average, making it ideal for solar energy generation. The country has an estimated technical potential of 207.8 GW for solar photovoltaic (PV) energy. However, as of 2021, only around 200 MW of solar capacity had been installed. This discrepancy between potential and actual utilization underscores the need for more aggressive development strategies and investments to harness solar energy efficiently.

2. Government Initiatives and Policies

The Indonesian government has recognized the importance of solar energy and has introduced various policies to encourage its development. The National Energy Policy (KEN) aims to increase the share of renewable energy to 23% by 2025 and 31% by 2050. Specific to solar energy, the government has implemented feed-in tariffs and offered incentives such as tax allowances and reductions in import duties for solar equipment. Additionally, the Ministry of Energy and Mineral Resources (MEMR) has launched the “1,000 Islands” program to promote solar energy in remote and underdeveloped areas. Despite these initiatives, bureaucratic hurdles and regulatory uncertainties have often slowed progress.

3. Challenges in Solar Energy Deployment

Several factors have impeded the rapid deployment of solar energy in Indonesia. One major challenge is the high upfront cost of solar energy Indonesia systems, which can be prohibitive for widespread adoption, particularly in rural and less economically developed regions. Additionally, the country’s energy infrastructure is heavily oriented towards fossil fuels, with coal still dominating the energy mix. This existing infrastructure poses a significant barrier to the integration of solar power. Furthermore, there are regulatory and bureaucratic obstacles, such as complex permitting processes and inconsistent policy implementation across different regions, which can deter investors and developers from pursuing solar projects.

4. Emerging Trends and Future Prospects

Despite the challenges, there are promising trends in the Indonesian solar energy sector. Technological advancements and decreasing costs of solar PV modules are making solar energy more economically viable. In recent years, there has been an increase in rooftop solar installations in urban areas, supported by regulations allowing net metering, which lets consumers sell excess power back to the grid. The private sector is also showing growing interest, with several large-scale solar projects in the pipeline. For example, the Cirata Floating Solar Plant in West Java, which, upon completion, will be one of the largest floating solar installations in Southeast Asia with a capacity of 145 MW.

The Indonesian government’s recent announcement of a carbon tax and a roadmap towards net-zero emissions by 2060 further highlights the country’s commitment to transitioning to renewable energy sources, including solar power. International collaborations and financing mechanisms, such as those provided by the Asian Development Bank (ADB) and other global institutions, are also expected to play a crucial role in accelerating solar energy development in Indonesia.


Solar energy in Indonesia is a sector with immense potential, hindered by significant challenges but also buoyed by promising developments and strong government commitments. As technological costs decline and policies become more supportive, solar energy is poised to play a crucial role in Indonesia’s renewable energy landscape, contributing to the country’s sustainable development goals and reducing its reliance on fossil fuels. With continued focus and investment, Indonesia can leverage its solar potential to meet its growing energy needs while addressing environmental concerns.