Energy Ministry Launches SEF Grant for Rooftop Solar Systems

MINISTRY OF ENERGY AND MINERAL RESOURCES

THE REPUBLIC OF INDONESIA

PRESS RELEASE

NUMBER: 70.Pers/04/SJI/2022

Date: 10 February 2022

Energy Ministry Launches SEF Grant for Rooftop Solar Systems

The Indonesian Ministry of Energy and Mineral Resources (EMR) and the United Nations Development Program (UNDP) Indonesia launched an incentive program for rooftop solar systems under a Sustainable Energy Fund (SEF) grant.

Through the Market Transformation for Renewable Energy and Energy Efficiency through Design and Implementation of Appropriate Mitigation Actions in Energy Sector (MTRE3) project, the SEF funds from the Global Environment Facility (GEF) will be managed and distributed by the Environmental Fund Management Agency (BPDLH). Based on Regulation of Minister of Finance Number 137/2019, BPDLH is a Public Service Agency (BLU) under the Ministry of Finance that manages funds and financing related to the environment, including energy.

This incentive is aimed to encourage people to install rooftop solar systems, especially for the customers of state electricity utility PLN from households, businesses and small and medium enterprises (SMEs), and social category (schools/educational buildings, hospitals, houses of worship).

The Minister of EMR, Arifin Tasrif, in his remarks said that the financing innovation will increase the interest of investors and the public to use solar energy. "We hope the incentive will make investment in rooftop solar systems more attractive, encourage the massive installation of rooftop solar systems, and contribute to the fulfillment of the new, renewable energy targets as well as the reduction in greenhouse gases emissions," Arifin explained.

Arifin also expressed his wish that the rooftop solar incentive would trigger the birth of funding innovations from the banking sector, other financing institutions, cooperation institutions, and donors. "Hopefully, it will facilitate people to make investments. Therefore, I would like to thank the UNDP for continuously supporting the implementation of new, renewable energy in Indonesia," commented Arifin.

To attract public interest to install rooftop solar, the government has amended the regulation on rooftop solar through the issuance of Regulation of Minister of EMR Number 26 of 2021 on Rooftop Solar Power Systems that are Connected to the Electricity Networks of the Holder of IUPTL for Public Interest. The changes include the percentage of electricity export from the rooftop solar systems to the grid, from previously 65% to 100% of the export volume recorded at the export-import meter, shorter application time for rooftop solar, the formation of a rooftop solar customer service center, and carbon trading opportunities from rooftop solar.

Arifin went on to explain that the development of rooftop solar will positively impact on the public. For instance, it will provide jobs for over 120,000 people, attract an investment of Rp50 trillion, develop the domestic supporting industries for rooftop solar, promote green products from the service sector and green industries to avoid carbon border tax at the global level, and cut carbon emissions by 4.5 million CO2.

On the same occasion, Director General of Budget Financing and Risk Management of the Ministry of Finance, Luky Alfirman, said the grant is a financing model released to design and implement appropriate actions to mitigate climate change in the energy sector. "I hope the SEF can answer the needs of off-grid as well as small and medium scale renewables projects. This financing support comes in the forms of loan guarantee, project financing, and validity funds," Lucky explained.

Meanwhile, UNDP Resident Representative in Indonesia, Norimasa Shimomura, expressed his appreciation to the government for the trust given to the UNDP in achieving the Sustainable Development Goals (SDGs), especially in clean energy and climate change. "This incentive program is an example of a green recovery strategy because it focuses on small and medium-sized businesses, medium-sized homes, and the social sector. Incentive support is provided to encourage green investment, which will encourage economic activity, create jobs, lower electricity costs, and reduce greenhouse gas emissions," said Shimomura.

Director General of New, Renewable Energy and Energy Conservation of the Ministry of EMR Dadan Kusdiana and Senior Advisor for Sustainable Energy of UNDP Indonesia Verania Andria, who were also present at the launching, hoped that the grant will provide relief from the investment costs of rooftop solar systems. This way, it will encourage massive installation of rooftop solar systems. "By involving national financing institutions such as the BPDLH, I hope there will be a continuation or replication of the program after the collaboration with the UNDP ends," added Dadan.

Criteria, Requirements, and Application Flow

The SEF grant for rooftop solar systems will be given based on a performance-based payment mechanism using e-vouchers. Applicants must pass a verification stage by meeting the requirements and criteria. If an application is approved, the incentive will be paid in a lump sum according to the e-voucher value via bank transfer to the applicant's account number.

There are three requirements for the incentive. First, the applicant is a PLN customer who will/is in the process of installing a rooftop solar system, and the rooftop system has not yet been operational (have not installed net-metering) as of December 1st, 2021. Second, the applicant must submit a National Identification Number (NIK) or Business Identification Number (NIB), where one NIK/NIB can only be used to apply for the incentive once. Third, incentives will not be given to rooftop systems that are financed by government funding sources (State Budget/APBN or Regional Government Budget/APBD) or aid/donors.

To qualify for the incentive, applicants must have a contract with a business entity/Engineering, Procurement, and Construction (EPC) solar company that is listed on the category of 'having a business license' at the Ministry of EMR. Please refer to https://siujang.esdm.go.id/Dokumen/Daftar-Badan-Usaha-Detail to see the complete list. Applicants must also show PLN approval, copy of NIK/NIB, copy of the applicants' bank account number, Operation Worthiness certificate or document from the manufacturer, Statement of Installation and Payment Completion issued by the business entity/EPC solar company, and a picture of the installed rooftop solar system with GPS coordinates. For rooftop solar systems bought in installments, applicants must provide proof of transfer to the lender.

Please refer to the ISURYA application (www.isurya.mtre3.id) for complete information on the criteria, requirements, and flow of application of the SEF grant for rooftop solar systems incentives. (IY)

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