Indonesia’s solar panel industry faces challenges amid COVID-19

Jakarta (VNA) - Demand for commercial photovoltaic (PV) panels in Indonesia was down up to 70 percent in the March-April period as the country’s government cut back electrification projects and businesses aborted installation plans.

According to a recent survey conducted by energy think tank Institute for Essential Services Reform (IESR), demand for PV systems in resident areas dropped by up to 100 percent compared to the same period last year.

Speaking at a recent virtual press conference, IESR executive director Fabby Tumiwa said the outlook over the next six months will be largely negative with no new orders.

The challenges faced by Indonesia’s solar power industry are similar to those across developing renewable markets in Asia.

The Indonesian government announced in late March a plan to reallocate 62.3 trillion Rp (4.15 billion USD) from the state budget to tackle the COVID-19 pandemic. The freed funds would focus on health care, the disbursement of relief funds and financial incentives for enterprises.

Local producers imported 40 percent of the materials used to produce solar PV panels. Domestically produced solar PV costs rose between 15 and 20 percent per unit in the March-April period.

Hariyanto, an official from the Indonesian Energy and Mineral Resources Ministry, confirmed that the government was slashing state-funded renewable energy project targets but not cancelling them entirely.

The ministry had revised down its target for government-funded solar rooftop installations from 800 units to 144 units and for solar-powered streetlamps from 40,000 to 26,000, he said./.