Table 3 Key features and comparison of regulations on SHP in Indonesia

Sector targets

Small business/cooperative

Private investors allowed

Aims

Electrification

Commercial and business, contributing to the achievement of national RE target

Improve investment, accelerate RE and GHG emission reduction target

Procurement

Direct appointment

Direct selection

Direct Appointment or direct selection depends on the cases

Max. allowed capacity (MW)

1 MW

10 MW

Allow more than 100 MW

Tariff

Business-to-business

FIT at Rp 656/kWh multiplied by a factor of F ranging from 1.0 to 1.6 referring project location. F (Java) is 1.0, the F is higher for outside Java, esp. Eastern Indonesia

FIT at Rp 1.075/kWh multiplied by a factor of F

USD-based FIT at US 12c/kWh aiming at increasing attractiveness

Business-to-business

The tariff is set in cents USD/kWh (payment will be Rupiah denominated). The tariff is set based on capacity, staging, and multiplied by F

Asset transfer scheme

Not regulated refers to build-own-operate (BOO)

BOO and later transfer to PLN at the end of the PPA period (BOOT). Under the 2020 amendment that BOOT/BOO shall follow negotiation and not be regulated, this is also applied to PR No. 112/2022

Additional remarks

The first RE regulation in Indonesia, known as small-scale distributed RE generation/PSK Tersebar

Obligation for PLN to purchase RE-based electricity

• Obligation for PLN to purchase RE-based electricity

• Incentivize private investment in Eastern Indonesia with higher F

• Beginning of dispute between MEMR and PLN regarding the FIT price

The regulation was ineffective and was held by PLN due to a tariff dispute

Some regions become unfavorable for the MHP project due to too-low tariffs

Covers broad ranges of capacity and types of RE technology, The F (as a location factor) is re-introduced, similar to the previous FIT regulation in 2009–2012