Solar Generator Market in Indonesia

Solar Generator in Indonesia Trends and Forecast

The future of the solar generator market in Indonesia looks promising with opportunities in the oil and gas, electrical, residential, commercial, government, and academic applications. The global solar generator market is expected to reach an estimated $0.8 billion by 2031 with a CAGR of 6.8% from 2025 to 2031. The solar generator market in Indonesia is also forecasted to witness strong growth over the forecast period. The major drivers for this market are the growing preference for clean and sustainable energy and the increasing demand for independent backup power.

• Lucintel forecasts that, within the installation category, off-grid is expected to witness the highest growth over the forecast period due to rising demand for solar generators in remote areas, the growing awareness of the benefits of solar generators, and government support for solar generators.

Emerging Trends in the Solar Generator Market in Indonesia

Indonesia solar generator market is experiencing significant transformation, driven by technological advancements, regulatory reforms, and increased investment. The government commitment to renewable energy, coupled with international collaborations, is accelerating the adoption of solar power across the nation. These developments are reshaping the energy landscape, offering new opportunities and addressing challenges in energy access, sustainability, and economic growth.

• Expansion of Rooftop Solar Installations: The Indonesian government has introduced a flexible quota system for rooftop solar installations, removing previous capacity restrictions. This change has led to a surge in public interest, with only 85 MW remaining out of the 900 MW quota by mid-2024. Innovations like zero-upfront investment schemes have further facilitated this growth, enabling industries to transition to solar energy more easily. This trend is democratizing energy access, particularly in urban areas, and contributing to the country renewable energy targets.
• Development of Domestic Solar Manufacturing: Indonesia is enhancing its solar manufacturing capabilities to reduce reliance on imports and strengthen the local supply chain. The Kendal solar panel plant, with an initial capacity of 1 GW and plans to expand to 3 GW, exemplifies this effort. This initiative supports the government target of 178 GW of installed solar capacity by 2060 and aims to boost local production of solar panels, creating jobs and fostering economic growth. However, challenges remain in achieving tier-1 certification for domestic modules to compete with imported alternatives.
• International Energy Export Initiatives: Indonesia is positioning itself as a renewable energy exporter, with plans to export solar power to neighboring countries. Agreements with Singapore to export up to 3.4 GW of solar electricity by 2030 highlight this strategy. These projects, valued at around $20 billion, involve solar photovoltaic and battery energy storage systems, facilitating Indonesia transition from a fossil fuel exporter to a renewable energy supplier. This move is expected to generate significant revenue and enhance regional energy security.
• Policy Reforms to Attract Investment: To attract foreign investment, Indonesia has relaxed local content requirements for renewable energy projects with at least 50% foreign funding. Solar projects can now use imported panels if operators obtain ministerial approval, sign power purchase agreements by the end of 2024, and start operations by mid-2026, provided panel suppliers invest in Indonesian production facilities. This policy change is expected to unlock over $20 billion in funding under the Just Energy Transition Partnership, accelerating the country renewable energy development.
• Ambitious Renewable Energy Targets; Indonesia aims to achieve net-zero emissions by 2050, a decade ahead of the previous target. The government plans to eliminate all coal and fossil fuel power plants within 15 years and significantly boost renewable energy capacity. However, experts remain skeptical due to Indonesia heavy reliance on coal and increasing energy consumption. The government acknowledges the logistical and technical challenges in transitioning to renewables but is working on solutions like developing a green smart grid to facilitate this shift.

These emerging trends are reshaping Indonesia solar generator market by enhancing energy access, fostering economic growth, and positioning the country as a regional renewable energy leader. While challenges remain, the government proactive policies, coupled with international collaborations, are paving the way for a sustainable and resilient energy future. Continued investment in infrastructure, technology, and human capital will be crucial to realizing the full potential of these developments.

Recent Developments in the Solar Generator Market in Indonesia

Indonesia solar generator market is undergoing significant transformation, driven by policy reforms, technological advancements, and strategic international collaborations. These developments are reshaping the energy landscape, enhancing sustainability, and positioning Indonesia as a key player in the global renewable energy sector.

• Relaxation of Local Content Requirements: In August 2024, Indonesia eased its local content regulations for renewable energy projects with at least 50% foreign funding. This policy change allows solar projects to utilize imported panels, provided operators obtain ministerial approval and commit to investing in domestic production facilities. This move aims to attract over $20 billion in funding under the Just Energy Transition Partnership and accelerate the country renewable energy transition.
• Kendal Solar Panel Plant Commencement: The Kendal solar panel plant in Central Java, developed by PT Daya Sukses Makmur Selaras, is set to begin operations by the end of 2024. With an initial production capacity of 1 GW, the plant aims to support Indonesia target of 178 GW of installed solar capacity by 2060. This development marks a significant step toward establishing a domestic solar manufacturing industry.
• Increased Rooftop Solar Deployment Targets: Indonesia Ministry of Energy and Mineral Resources has set a target of deploying 5,746 MW of rooftop solar between 2024 and 2028. This initiative is expected to be predominantly adopted by commercial and industrial consumers, following the abolishment of net-metering earlier in 2024. The move aims to enhance energy efficiency and reduce reliance on the national grid.
• Solar Power Export Agreements: Indonesia has signed agreements to export up to 3.4 GW of solar power to Singapore by 2030. These projects, valued at around $20 billion, involve solar photovoltaic and battery energy storage systems, facilitating Indonesia transition from a fossil fuel exporter to a renewable energy supplier. The electricity will be transmitted via a subsea transmission cable system.
• Surpassing 700 MW in Installed Solar Capacity: As of August 2024, Indonesia total installed solar capacity reached 717.71 MW. With 16.92 GW of projects in the pipeline, the country aims to achieve between 350 GW and 550 GW of solar capacity by 2050. This growth is supported by increased investments and policy reforms aimed at accelerating solar deployment.

These developments are significantly impacting Indonesia solar generator market by enhancing domestic manufacturing capabilities, increasing renewable energy exports, and setting ambitious deployment targets. While challenges remain, these initiatives position Indonesia as a growing force in the global renewable energy landscape, contributing to its economic growth and sustainability goals.

Strategic Growth Opportunities for Solar Generator Market in Indonesia

Indonesia’s solar generator market is rapidly evolving, driven by an increasing demand for clean energy and government incentives. The country’s vast geographical area and abundant sunlight make solar energy a viable and sustainable solution. With new technological innovations, regulatory support, and growing investments, several growth opportunities have emerged across key applications in the solar generator market. These opportunities promise to accelerate the adoption of solar technology and play a crucial role in meeting the nation’s renewable energy targets.

• Rooftop Solar Power for Residential and Commercial Sectors: Rooftop solar power systems present significant growth opportunities in Indonesia, especially in the residential and commercial sectors. With the government targeting over 5,746 MW of rooftop solar capacity by 2028, this market segment is set to expand. Rooftop solar installations reduce dependency on the national grid, lower electricity bills, and offer an environmentally friendly alternative. As net metering policies improve, more consumers are expected to adopt solar, driving long-term growth in the residential and commercial sectors.
• Solar Microgrids for Remote and Off-Grid Areas: Solar microgrids are becoming a crucial solution for providing electricity to Indonesia’s remote and off-grid areas. The vast archipelago with numerous islands and rural communities presents challenges in grid connectivity. Solar microgrids can deliver clean, reliable power to areas that are difficult to reach with conventional grid systems. These decentralized systems also contribute to energy independence and rural development. Government support and international partnerships in remote electrification projects are essential drivers of growth in this sector.
• Large-Scale Solar Farms and Utility-Scale Solar Projects: Large-scale solar farms and utility-scale solar projects offer immense potential to boost Indonesia’s renewable energy capacity. With significant solar resources and government backing, Indonesia aims to scale up large solar installations to meet its renewable energy targets. These projects have the advantage of economies of scale, enabling lower energy costs and providing stability to the grid. Furthermore, these large-scale projects are attracting both local and foreign investment, strengthening the country’s position in the global clean energy market.
• Solar-Powered Agricultural Solutions: Solar-powered solutions in the agriculture sector provide promising growth opportunities, especially in rural areas where access to electricity can be limited. Solar-powered irrigation systems, water pumps, and cold storage facilities are helping farmers improve productivity, reduce costs, and increase yields. Solar energy plays a crucial role in making agriculture more sustainable and resilient to climate change. The government’s increasing support for green technologies in agriculture further fuels the adoption of solar-powered applications in this sector.
• Solar-Powered Electric Vehicle Charging Stations: The rise of electric vehicles (EVs) in Indonesia opens up significant growth potential for solar-powered EV charging stations. As the country moves toward cleaner transportation solutions, integrating solar power into EV charging infrastructure provides a sustainable way to power electric vehicles. Solar-powered charging stations reduce grid demand and promote a greener transport system. The government’s push for electric mobility and the growing number of EVs will drive demand for solar-powered EV infrastructure in the coming years.

The solar generator market in Indonesia is being reshaped by strategic growth opportunities across various applications, such as rooftop solar, solar microgrids, large-scale solar farms, agriculture, and electric vehicle infrastructure. These opportunities offer a pathway to achieve the country’s renewable energy targets, support economic growth, and drive technological innovation. By focusing on these key applications, Indonesia is positioning itself as a leader in renewable energy, fostering sustainability, and reducing reliance on fossil fuels.

Solar Generator Market in Indonesia Driver and Challenges

The solar generator market in Indonesia is growing rapidly, fueled by technological advancements, favorable economic conditions, and supportive government policies. However, the market also faces various challenges, such as grid infrastructure limitations, financing issues, and regulatory hurdles. These factors impact the growth potential of the solar sector in Indonesia. Understanding the drivers and challenges that shape the market is essential for fostering sustainable growth and attracting both local and international investments to the solar industry.

The factors responsible for driving the solar generator market in Indonesia include:
• Technological Advancements: Technological innovations in solar panels, battery storage, and energy management systems have significantly boosted the efficiency and cost-effectiveness of solar generators. The development of bifacial solar panels, which capture sunlight from both sides, has increased energy production by up to 20%, making solar power more attractive to consumers. Battery storage solutions also allow users to store excess energy for later use, improving energy reliability and autonomy. These advancements are driving the widespread adoption of solar power across various sectors in Indonesia.
• Government Policies and Incentives: The Indonesian government has introduced several policies and incentives to promote the adoption of renewable energy, including solar power. These include tax incentives, subsidies, and feed-in tariffs for solar power generation, as well as a target of 23% renewable energy share in the energy mix by 2025. Such measures aim to reduce Indonesia’s reliance on fossil fuels and encourage investment in solar energy projects. These supportive policies make the solar generator market more attractive to both domestic and foreign investors.
• Rising Energy Demand: As Indonesia’s economy continues to grow, the electricity demand is increasing rapidly. The government’s efforts to electrify remote areas and the growing urban population are further intensifying this demand. Solar power is becoming an essential part of the solution, especially in off-grid regions and areas with unreliable electricity supply. The combination of rising energy needs and the push for clean energy has created a strong market for solar generators in Indonesia, accelerating the transition to renewable energy.
• Environmental Awareness and Sustainability: As global awareness about climate change and environmental degradation increases, Indonesia is under growing pressure to transition towards cleaner energy sources. Solar power offers a sustainable solution to reduce carbon emissions and improve environmental quality. With increasing public awareness and a growing emphasis on green energy, both individuals and businesses are more inclined to invest in solar generators. The desire to contribute to environmental sustainability is driving the demand for solar power solutions across the nation.
• International Investment and Partnerships: Indonesia has attracted significant international investment in its renewable energy sector, particularly from organizations and countries seeking to meet their sustainability goals. The government’s efforts to improve the ease of doing business, along with partnerships with foreign companies, are helping to accelerate the development of solar energy projects. The influx of capital and technical expertise from international investors is crucial for scaling up solar generation capacity in Indonesia and accelerating the market’s growth.

Challenges in the solar generator market in Indonesia are:
• Grid Infrastructure Limitations: One of the main challenges facing the solar generator market in Indonesia is the lack of sufficient grid infrastructure to accommodate the growing share of solar energy. Indonesia’s electricity grid, especially in remote areas, is often underdeveloped, making it difficult to integrate solar power into the national grid. This limits the ability to deliver solar-generated electricity to end users and causes significant energy losses. Expanding and modernizing grid infrastructure is essential for maximizing the potential of solar power in Indonesia.
• Financing and Investment Barriers: While there is growing interest in solar energy projects, access to financing remains a significant challenge in Indonesia. Many solar projects, especially in rural and off-grid areas, require substantial capital investment. However, financing options for solar energy projects can be limited, especially for smaller developers and local businesses. The availability of affordable financing options and clearer investment frameworks is essential to unlocking the full potential of the solar market in Indonesia.
• Regulatory and Policy Uncertainty: Despite supportive government policies, regulatory uncertainty remains a challenge for the solar generator market in Indonesia. The evolving regulatory landscape can confuse investors, project developers, and consumers. Issues such as unclear net metering regulations, bureaucratic delays, and inconsistent implementation of policies can undermine the growth of the solar sector. More transparency and stability in the regulatory environment are needed to encourage long-term investments and ensure the smooth development of solar energy projects.

The solar generator market in Indonesia is experiencing rapid growth due to technological advancements, government incentives, and rising energy demand. However, challenges such as grid limitations, financing barriers, and regulatory uncertainty need to be addressed to fully unlock the market’s potential. Overcoming these challenges will help Indonesia capitalize on the growing demand for solar power and accelerate its transition to a more sustainable energy future. By tackling these issues, the country can strengthen its position as a regional leader in renewable energy.

List of Solar Generator Market in Indonesia Companies

Companies in the market compete on the basis of product quality offered. Major players in this market focus on expanding their manufacturing facilities, R&D investments, infrastructural development, and leverage integration opportunities across the value chain. Through these strategies, solar generator companies cater to increasing demand, ensure competitive effectiveness, develop innovative products & technologies, reduce production costs, and expand their customer base. Some of the solar generator companies profiled in this report include:
• Company 1
• Company 2
• Company 3
• Company 4
• Company 5
• Company 6
• Company 7

Solar Generator Market in Indonesia by Segment

The study includes a forecast for the solar generator market in Indonesia by installation, power rating, battery type, and application.

Solar Generator Market in Indonesia by Installation [Analysis by Value from 2019 to 2031]:

• On-Grid
• Off-Grid

Solar Generator Market in Indonesia by Power Rating [Analysis by Value from 2019 to 2031]:

• Up to 500 W
• More than 500 W

Solar Generator Market in Indonesia by Battery Type [Analysis by Value from 2019 to 2031]:

• Lead-Acid
• Lithium-Ion

Solar Generator Market in Indonesia by Application [Analysis by Value from 2019 to 2031]:

• Oil and Gas
• Electrical
• Residential
• Commercial
• Government
• Academics

Features of the Solar Generator Market in Indonesia

Market Size Estimates: Solar generator in Indonesia market size estimation in terms of value ($B).
Trend and Forecast Analysis: Market trends and forecasts by various segments.
Segmentation Analysis: Solar generator in Indonesia market size by installation, power rating, battery type, and application in terms of value ($B).
Growth Opportunities: Analysis of growth opportunities in different installation, power rating, battery type, and application for the solar generator in Indonesia.
Strategic Analysis: This includes M&A, new product development, and competitive landscape of the solar generator in Indonesia.
Analysis of competitive intensity of the industry based on Porter’s Five Forces model.

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FAQ

Q.1 What are the major drivers influencing the growth of the solar generator market in Indonesia?
Answer: The major drivers for this market are growing preference for clean and sustainable energy and increasing demand for independent backup power.
Q2. What are the major segments for solar generator market in Indonesia?
Answer: The future of the solar generator market in Indonesia looks promising with opportunities in the oil and gas, electrical, residential, commercial, government, and academic applications.
Q3. Which solar generator market segment in Indonesia will be the largest in future?
Answer: Lucintel forecasts that off-grid is expected to witness highest growth over the forecast period.
Q4. Do we receive customization in this report?
Answer: Yes, Lucintel provides 10% customization without any additional cost.

This report answers following 10 key questions:

Q.1. What are some of the most promising, high-growth opportunities for the solar generator market in Indonesia by installation (on-grid and off-grid), power rating (up to 500 W and more than 500 W), battery type (lead-acid and lithium-ion), and application (oil and gas, electrical, residential, commercial, government, and academics)?
Q.2. Which segments will grow at a faster pace and why?
Q.3. What are the key factors affecting market dynamics? What are the key challenges and business risks in this market?
Q.4. What are the business risks and competitive threats in this market?
Q.5. What are the emerging trends in this market and the reasons behind them?
Q.6. What are some of the changing demands of customers in the market?
Q.7. What are the new developments in the market? Which companies are leading these developments?
Q.8. Who are the major players in this market? What strategic initiatives are key players pursuing for business growth?
Q.9. What are some of the competing products in this market and how big of a threat do they pose for loss of market share by material or product substitution?
Q.10. What M&A activity has occurred in the last 5 years and what has its impact been on the industry?
For any questions related to Solar Generator Market in Indonesia, Solar Generator Market in Indonesia Size, Solar Generator Market in Indonesia Growth, Solar Generator Market in Indonesia Analysis, Solar Generator Market in Indonesia Report, Solar Generator Market in Indonesia Share, Solar Generator Market in Indonesia Trends, Solar Generator Market in Indonesia Forecast, Solar Generator Companies, write Lucintel analyst at email: helpdesk@lucintel.com. We will be glad to get back to you soon.