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Six Reasons Why Solar Power Plants are Difficult to Develop in Indonesia

Based on RUPTL PLN 2018, installed capacity of solar power plants in Indonesia is only 78.5 MW. It is the lowest capacity among other type of renewable energy sources. I wonder what makes this happened.

[Read more: Small Scale Geothermal Power Plant is My Project of the Year!)

Based on Indonesia vice minister of energy and mineral resources, there are six reasons why solar power plants are difficult to develop in Indonesia.

[1] Land/Area

In Indonesia, it is very difficult to have free land or area to build solar power plants, especially in Jakarta, capital of Indonesia. It is different from Uni Emirat Arab who gives free land for investors to develop solar power plants.

[2] Quality of Sunlight

Quality of sunlight in Indonesia is not as large as in Arabic countries. Capacity factor from solar energy is Indonesia is 18% in average, while in Arabic countries, it can be as high as 24%. Capacity factor is ratio of electricity generated during certain period to installed capacity.

[Read more: Potential Geothermal Projects in Indonesia]

[3] High Interest Rate

Interest rate applied to investors who develop renewable energy in Indonesia is higher than Arabic countries. Interest rate in Indonesia is about 10%-11%, while in Arabic countries, the interest rate is below 2%.

[4] High Tax

In Indonesia, income tax is about 25%. In Arabic countries, the investors are relieved from tax.

[5] Operation system is still using manual system

Right now, solar power plants in Indonesia are still operated manually. Smart grid is not applied yet.

[6] Electricity Consumption Pattern

In Arabic countries, peak consumption of electricity occurs during daytime. This is match with solar power plants characteristics, which work optimally at night. In Indonesia, peak load occurs at night. Therefore, batteries are required to store energy generated duringtime to be used at night.

Those problems caused electricity price from solar power plants in Indonesia is expensive. In Uni Emirat Arab, the electricity price is below US$ 3 cents per kWh.

[Read more: Difference between Base Load, Peak Load, and Load Following Power Plants]


Arcandra Ungkap Enam Sebab PLTS Sulit Berkembang di Indonesia (

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