The Government of Indonesia (“GOI”) continues its efforts to stimulate increased use of renewable energy, and from the regulatory perspective, the most recent attempt is the issuance of Minister of Energy and Mineral Resources (“MEMR”) Regulation No. 26 of 2021 on Rooftop Solar Power Plants Connected to the Electricity Grid of Holders of Electricity Supply Business License for Public Interest (“MEMR Reg. 26/2021”), which replaces the previous MEMR Regulation No. 49 of 2018 (“MEMR Reg. 49/2018”).
MEMR Reg. 26/2021 sets out various provisions on the use of grid-connected rooftop solar power plants in Indonesia, covering the construction and installation, operation, examination and testing of the rooftop solar power plants. Although MEMR Reg. 26/2021 has yet to regulate off-grid rooftop solar power plants, at least it builds positive momentum for Indonesia’s renewable energy-based power supply, especially the use of rooftop solar power plants.
As discussed in the comparison table below, MEMR Reg. 26/2021 introduces a number of breakthrough provisions that offer considerable flexibility and relaxation compared to MEMR Reg. 49/2018 with the aim of encouraging private entities to use rooftop solar power plants.
The comparison table below shows some key differences or changes between the former and the new regulations on rooftop solar power plants.
| No. | Matters | Former Regulation (MEMR Reg. 49/2018) |
New Regulation (MEMR Reg. 26/2021) |
| 1. | Coverage of Users or Customers | Only applicable to rooftop solar power plants installed by PLN’s customers.
|
Applicable to rooftop solar power plants installed by:
|
| 2. | Approval for Construction and Installation | Approval Request: Submitted to PLN (State Power Company), copied to the Director General of EBTKE[2] and the Director General of Electricity. | Approval Request:
Submitted to the IUPTLU holder, copied to the Director General of EBTKE and the Director General of Electricity. |
| Approval/Rejection Notification Timeline: 15 business days. | Approval/Rejection Notification Timeline:
5 business days. |
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| 3 | Maximum Capacity | 100% of the connected power capacity. |
|
| 4. | Net-metering Policy on Excess Electricity [3] | Customers can receive only a maximum of 65% credit on the excess electricity exported to PLN’s grid. | Customers can receive a full (100%) credit on the excess electricity exported to either PLN’s grid or the IUPTLU holder’s grid (leading to a greater reduction in their electricity bills). |
| 5. | Integrated Electronic Services and Reporting System (“Integrated Electronic System”) | Not regulated. | The MEMR will establish the Integrated Electronic System to simplify the licensing process and provide more transparency.
The Integrated Electronic System is expected to run by the first quarter of 2022 and will enable online application for rooftop solar system construction and installation. |
| 6. | Carbon Trading | Not regulated. | Carbon trading between customers and IUPTLU holders is now allowed, and the implementation thereof will be regulated further in a MEMR regulation. |
| 7. | Weather Forecast Data | Not regulated. | Customers with more than 3 MW installed capacity are required to provide weather forecast database settings integrated into the Supervisory Control and Data Acquisition (SCADA) system or distribution smart-grid owned by the relevant IUPTLU holder. |
Although many people and businesses positively respond to the issuance of MEMR Reg. 26/2021, it remains interesting to see how the GOI will seek to strike the balance between the interests of PLN/IUPTLU holders and those of the customers in the rooftop solar power industry. Our team will continuously and closely monitor the development and will update you on any development or progress.
If you have further inquiries about this newsletter, please reach out to us at info@wplaws.com or any of our lawyers.
[1] Power supply by an IUPTLU holder instead of PLN is especially common in industrial estates where the IUPTLU holder is the sole electricity supplier.
[2] Directorate General of New and Renewable Energy and Energy Conservation (Energi Baru Terbarukan dan Konservasi Energi (“EBTKE”).