Indonesia Renewable Energy Solar Rooftop Market

Indonesia Renewable Energy Solar Rooftop Market Overview

• The Indonesia Renewable Energy Solar Rooftop Market is valued at USD 1.1 billion, based on a five-year historical analysis. This growth is primarily driven by increasing energy demand, supportive government policies such as MEMR Regulation 26/2021, and heightened awareness of environmental sustainability among consumers. The market has experienced a notable rise in installations, especially in urban centers, as businesses and homeowners seek to reduce energy costs and carbon emissions. Industrial and commercial sectors have shown strong momentum, with distributed rooftop solar capacity expanding rapidly in recent years .
• Key cities such asJakarta, Surabaya, and Bandungcontinue to dominate the market due to their high population density, substantial energy consumption, and concentration of commercial and industrial activities. These urban centers benefit from targeted government incentives and infrastructure development, making them prime locations for solar rooftop adoption. The presence of major businesses and export-oriented industries further accelerates the uptake of solar energy solutions in these regions .
• TheMinister of Energy and Mineral Resources (MEMR) Regulation No. 26/2021on Rooftop Solar PV Systems for Consumers of PT PLN (Persero), issued by the Ministry of Energy and Mineral Resources, provides the current binding regulatory framework for rooftop solar in Indonesia. This regulation establishes operational requirements for grid-connected rooftop solar, including net metering, capacity thresholds, and mandatory registration for new installations. The policy aims to increase the share of renewable energy in the national mix and reduce reliance on fossil fuels, supporting Indonesia’s broader renewable energy targets and energy security objectives .

Indonesia Renewable Energy Solar Rooftop Market Segmentation

By Technology:The market is segmented into two primary technologies:Solar Photovoltaic (PV) SystemsandConcentrated Solar Power (CSP). Solar PV systems overwhelmingly dominate the market, driven by their versatility, ease of installation, and declining costs. The ongoing shift toward decentralized energy generation has led to increased adoption of PV systems in both residential and commercial sectors. CSP remains a niche segment, primarily considered for utility-scale projects where energy storage and dispatchability are required .

By Panel Type:The market is further segmented by panel type intoMonocrystalline Solar Panels,Polycrystalline Solar Panels, andThin-Film Solar Panels. Monocrystalline panels lead the market due to their higher efficiency and compact form factor, making them ideal for space-constrained urban rooftops. Polycrystalline panels are favored for their cost-effectiveness, while thin-film panels are increasingly adopted in applications requiring flexibility and lightweight materials, such as certain commercial and industrial rooftops .

Indonesia Renewable Energy Solar Rooftop Market Competitive Landscape

The Indonesia Renewable Energy Solar Rooftop Market is characterized by a dynamic mix of regional and international players. Leading participants such as PT. Surya Energi Indotama, PT. ATW Solar, PT. Sky Energy Indonesia Tbk, PT. TML Energy, PT. Selaras Daya Utama (SDU), PT. Xurya Daya Indonesia, PT. TotalEnergies Indonesia, PT. Trina Solar Indonesia, PT. Canadian Solar Indonesia, PT. JinkoSolar Indonesia, PT. SUN Energy, PT. Hanwha Q CELLS Indonesia, PT. LONGi Green Energy Technology Indonesia, PT. JA Solar Technology Indonesia, and PT. First Solar Indonesia contribute to innovation, geographic expansion, and service delivery in this space.

Indonesia Renewable Energy Solar Rooftop Market Industry Analysis

Growth Drivers

• Increasing Energy Demand:Indonesia's energy consumption is projected to reach 1,000 terawatt-hours (TWh) in future, driven by urbanization and industrial growth. The country's population is expected to exceed 277 million, leading to a 4–5% annual increase in energy demand. This surge necessitates alternative energy sources, positioning solar rooftop installations as a viable solution to meet the growing energy needs while reducing reliance on fossil fuels, which currently account for approximately 83% of energy consumption.
• Government Incentives and Subsidies:The Indonesian government has allocated approximately IDR 1.3 trillion (around USD 85 million) for renewable energy initiatives in future. This includes subsidies for solar rooftop installations, which can cover up to 25% of installation costs. Additionally, the government aims to achieve a 23% renewable energy share in the national energy mix in future, further encouraging investments in solar technologies through favorable policies and financial support.
• Technological Advancements in Solar Technology:The efficiency of solar panels has improved significantly, with average conversion rates reaching 20–21% in future. Innovations in energy storage solutions, such as lithium-ion batteries, are also becoming more affordable, with prices dropping by over 60% since 2018. These advancements enhance the viability of solar rooftop systems, making them more attractive to consumers and businesses looking to reduce energy costs and increase energy independence.

Market Challenges

• High Initial Investment Costs:The average cost of installing a solar rooftop system in Indonesia is approximately IDR 15 million (around USD 950) per kilowatt. This high upfront investment can deter potential customers, especially in a country where the average household income is around IDR 4.5 million (USD 290) per month. Despite long-term savings, the initial financial barrier remains a significant challenge for widespread adoption of solar technology.
• Regulatory Uncertainties:The regulatory landscape for renewable energy in Indonesia is often inconsistent, with frequent changes in policies and incentives. For instance, the implementation of net metering regulations has faced delays, affecting consumer confidence. In future, only 15% of potential solar rooftop users are aware of existing regulations, leading to confusion and hesitance in adopting solar solutions, which hampers market growth.

Indonesia Renewable Energy Solar Rooftop Market Future Outlook

The future of the solar rooftop market in Indonesia appears promising, driven by increasing energy demands and supportive government policies. In future, the integration of smart grid technologies is expected to enhance energy efficiency and reliability. Additionally, the rise of community solar projects will facilitate broader access to solar energy, particularly in urban areas. As awareness grows and technology becomes more affordable, the market is likely to witness accelerated adoption, contributing to Indonesia's renewable energy goals.

Market Opportunities

• Expansion of Urban Areas:With urbanization rates projected to reach 57% in future, there is a significant opportunity for solar rooftop installations in densely populated cities. This growth can lead to increased demand for sustainable energy solutions, making solar rooftops an attractive option for urban dwellers seeking to reduce energy costs and carbon footprints.
• Partnerships with Local Governments:Collaborating with local governments can enhance the deployment of solar rooftop systems. By leveraging government resources and incentives, private companies can facilitate installations in public buildings and low-income neighborhoods, expanding access to renewable energy and fostering community engagement in sustainability initiatives.