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“In those places, people still use a lot of diesel generators. But it’s expensive and difficult to get the diesel to these islands. One litre of diesel costs at least 1 US dollar, which means that a kilowatt hour of electricity can cost more than 25 cents. We can already supply solar energy to customers at that same price, or even less,” states Susanto
. “A lot of customers are generally scared off by the initial investment. But we rent out the installations, instead of just selling them. We ask the customer what they are now paying for electricity and make a solid financial plan to cut those costs down by switching to solar energy.”
“In the 80s and 90s, solar energy was expensive,” says Horst Kruse of PT Kaltimax, who’s been involved in solar energy in Indonesia for more than 20 years. “Now, in Indonesia, it’s cost-effective in remote areas. The price of diesel will continue to rise. There is a high demand for energy from companies and the population. Solar energy systems are so much simpler than diesel generators. Right now, the best solution for remote areas is to make use of solar energy during the day and to only switch to diesel generators during the night. This can save a lot of money on diesel.”
The conditions for solar energy are perfect in Indonesia, as the country is blessed with daily sunshine. Still, its potential is not yet being tapped there. “It’s been ignored for a very long time,” says Horst Kruse. “Indonesia has its own reserves of oil, gas and coal. Fossil fuel and power are also heavily subsidised, which makes it hard to compete for renewable energy.” Furthermore, solar energy doesn’t have the best reputation. “A lot of installations are poorly constructed,” explains Susanto. “This means the systems can be unsafe or unreliable, which of course damages trust.”
Though solar energy is still in its infancy, there has been a change brewing in the last couple of years. “Ten years ago I would have said: ‘Forget Indonesia!’ But things are changing,” claims Horst Kruse. The government has set a goal to generate a quarter of its energy through renewable sources by 2025. The ministry of energy has recently issued a tender to supply renewable energy to the national energy utility PLN. “This is a big breakthrough,” according to Kruse.
Anthony Anderson , consultant at PwC in Jakarta, is noticing a lot of interest for the tender from companies. “Especially last year, we’ve seen a growing number of solar energy-related companies entering Indonesia. For now, it will remain a small market, but there are definitely possibilities.”
From 23 to 27 September the ‘Solar PV Trade Mission: Indonesia ’ will take place in Jakarta , focusing on the development of solar energy in Indonesia. “Indonesia has a strong need for knowledge and know-how,” says Anderson. “If the quality of solar systems increases, the trust in solar energy’s potential will grow.” Susanto wholeheartedly agrees: “There needs to be some kind of certification system for contractors. There’s also a great need for education. Many people and companies don’t have the faintest idea what solar energy is or simply don’t consider it.”
Right now, solar energy is particularly interesting for remote areas without grid connection. But in the future it will also become increasingly interesting for all other areas, as the subsidies on power and fuels will gradually disappear. “This will certainly cause the solar market to grow,” says Anderson. Susanto believes Indonesia is ready for more solar energy. “Consumers and companies do not want to pay too much for their power and are looking for alternatives.” According to Kruse, solar energy has great potential. “In Indonesia, we could generate 50 to 80 percent more solar energy than in Germany, for example.” Solar energy could be a huge source of power for Indonesia, and it’s just waiting to be tapped.
International Solar PV Trade Mission
The Solar PV Trade Mission: Indonesia will take place from 23 to 27 September 2013 in Jakarta. The focus of the trade mission will be the new conditions and opportunities in the Indonesian Solar PV market.
For programme and speakers see: www.pvtrademissionindonesia.com