Indonesia launched the PV feed-in tariff

July 2016, the Indonesian Minister of Energy and Mineral Resources (MEMR) has released the first round of the domestic photovoltaic feed-in tariffs, to support the development of 250MW of solar power capacity. This news also is good for solar powered portable generator. Following the unsuccessful auction in 2013, this round of subsidies to Indonesia fledgling photovoltaic industry has brought new hope. This article will explore the effect of this policy, and who are most likely to benefit from it.

This is the first time in Indonesia to provide feed-in tariff for the photovoltaic power generation. In particular, the Indonesian government to provide this power purchase agreement (PPA) for a period of 20 years, the developer can get the price between $ 0.145-0.25 / kWh, mainly due to the different specific price and location of the project vary. The Indonesian government will provide subsidies for the current round of 250MW PV capacity, adopt a "first come first served" approach. Maximum quota share of the island of Java (150MW), but enjoy the lowest tariff ($ 0.145 / kWh). Individual projects can enjoy subsidies capacity is limited to 20MW.

In accordance with policy requirements, Indonesia photovoltaic project must be at least 43.85% of the minimum local content requirements to be eligible to get subsidies. It failed to meet the photovoltaic project can only get a much lower tariff. For example, if the local component of a project is only 22% ( only reach half of the requirements), the project can only get folded after the tariff. However, the specific measures of local content requirements, and this policy will give local PV project imported PV modules, inverters and LifePO4 battery pack bring what impact in the end, we don’t know.

Our cost of electricity (LCOE) analysis shows that, to meet the local content requirement, compared with other parts of Indonesia, Java, Bali and Sumatra higher returns photovoltaic power generation projects. Accordance with the provisions of the tariff, photovoltaic power generation projects can achieve 14-19% return on equity in these areas, while projects in other areas that it is difficult to ensure a good return.

Currently, Indonesia local PV equipment manufacturers of an annual capacity is 90MW, equivalent to the total local feed-in tariff quota (250MW) of 36%. This means that once the local content requirements beginning to affect the import of photovoltaic units, these local manufacturers must begin to increase production.

However, the biggest problem of photovoltaic projects in Indonesia must face the question is whether to get the bank's PV assets investment, especially some international investment banks. In addition, a handful of manufacturers comply with the requirements of the loan in the end whether there is sufficient financial strength increase production, which is a problem. To address these challenges, local enterprises in Indonesia is likely to choose to establish partnerships with international companies.

Currently, Indonesia's photovoltaic feed-in tariffs have been identified to promote the program and the main point of time this policy, but did not specify a specific start time. This is most likely to make start-up time of some projects delayed to the fourth quarter of 2016. Since the registration from the project as well as to at least 16 months lead time between the real beginning of construction, the local wind turbine manufacturers should have sufficient time to increase productivity.

Now it seems to Pertamina, PLN and LenIndustri company headed by Indonesian local project developers and Sedayu and Optimal Power Solutions and other projects the general contractor (EPC) are most likely to benefit from this policy. SGI-Mitabu (Australia), AkuoEnergy (France), Enfinity (Belgium), and has completed three projects Conergy and other international players have also been prepared.

Six local manufacturers in Indonesia will benefit from feed-in tariff policy, including LenIndustri and Swadaya Prima Utama. Canadian Solar has been through the establishment of local partnerships involved in the construction of a 30MW power plant will be the first international developers to enter the Indonesian market, hope it also help for portable solar power generator market.

The following are several sets of data we get:

•In July 2016, the total capacity of the Indonesian Government quota PV feed-in tariff is 250MW.

•Government provides tariff from $ 0.145 / kWh to 0.25 / kWh range, the term power purchase agreement for 20 years.

• Indonesia PV project cost of electricity at $ 0.089 / kWh to $ 0.229 /kWh.