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Issuance of Minister of Energy and Mineral Resources No. 26 of 2021 to Increase the Use of Rooftop Solar Systems in Indonesia.

I. Introduction

In connection with Indonesia’s commitment to achieve Net Zero Emission, the Government has actually taken steps to spur the development of new and renewable energy through the National Energy General Plan which targets 23% new and renewable energy by 2025 through three channels, namely electricity, utilization of non-fossil energy-based fuels or biofuels, and direct use of new and renewable energy. Realizing the consistent potential of solar resources in Indonesia, the Government is aggressively encouraging the utilization of Solar Power Plant through Rooftop Solar. However, the implementation such program have not achieved optimal results. Therefore, as an effort to increase the utilization of Rooftop Solar by the community, the Government then issued the latest regulation, namely Minister of Energy and Mineral Resources Regulation No. 26 of 2021 concerning Rooftop Solar Power Plants Connected to the Electric Power Network Holders of Electricity Business Licenses for the Public Interest which revoked Minister of Energy and Mineral Resources Regulation No. 49 of 2018 concerning Use of Rooftop Solar Power Generation Systems by Consumers of PT Perusahaan Listrik Negara (MEMR 49/2021)  (MEMR Regulation 26/2021)

II. Key Points

Rooftop Solar Customers

MEMR Regulation 26/2021 expands the definition of the Rooftop Solar System, which in the previous regulation of the MEMR Regulation 49/2018 was only limited to PLN customers, to be as follows “the process of generating electricity using photovoltaic modules that are installed and placed on the roof, walls, or other parts of buildings belonging to PV mini-grid customers. roof and distribute electrical energy through the electrical connection system for Rooftop Solar customers.” This definition then includes PLN customers as well as IUPTLU holders who have their respective business area.

Capacity

For Rooftop Solar to be installed in the territory of SOEs holding IUPTLU, the capacity is limited to a maximum of 100%, while for those other than SOEs the capacity of Rooftop Solar Systems to be installed is limited by the local electricity system which declared by the IUPTLU holder. Such declaration shall be reported to the Director General of New and Renewable Energy (EBTKE) with a copy to the Director General Electricity.

Licensing

Rooftop Solar customers who build and install Rooftop Solar systems with a total capacity:

1. more than 500 kW (five hundred kilowatts) connected in 1 (one) electrical power installation system, must have a business license to provide electricity for their own interests, which is granted by the Minister or the Governor;
2. up to 500 kW (five hundred kilowatts) connected in 1 (one) electric power installation system, must report to the Minister or Governor before the commencement of constructions and instalation.

Issuance of a business license to provide electricity for self-interest as referred to in Article 10 paragraph (2) and submission of reports as referred to in Article 11 paragraph (2), is carried out through the application of an integrated service and reporting system to the Rooftop Solar System electronically.

In addition, the obligation for each Rooftop Solar System to have an Operation Worthiness Certificate will still be applied.

III. The Effect

With the revision of this Rooftop Solar regulation, the Government hopes that the utilization of Rooftop Solar in Indonesia can be accelerated and will achieve 23% of the new and renewable energy target by involving Solar Rooftop consumers. This is reflected in the Government’s focus on prioritizing convenience for Rooftop Solar customers by shortening the period of approval or rejection by IUPTLU holders to 5 working days and for those requiring PJBL adjustments to 12 days.

And not to mention the MEMR Regulation 26/2021 also requires an application-based service mechanism, both requests and complaints or reports, all integrated with a digital-based system so that it is easier to track the progress of Solar Rooftop related matters.

IV. Transition Clause

When this MEMR Regulation 26/2021 comes into force, the Minister of Energy and Mineral Resources Regulation No. 01 of 2017 concerning Parallel Operation of Power Plants with the Electric Power Network of PT Perusahaan Listrik Negara (Persero) and the MEMR Regulation 49/2018 are declared invalid.

However:

1. The Rooftop Solar system that has been built and installed before this MEMR Regulation 26/2021 comes into force and has not been reported to the IUPTLU Holder, is declared to have complied with the provisions in this MEMR Regulation 26/2021 after the Rooftop Solar Customer reports to the IUPTLU Holder and complies with the provisions of the legislation in the electricity sector.
2. Rooftop Solar customers from the tariff class for industrial purposes who have installed a Rooftop Solar System with a capacity greater than 3 MW (three megawatts) prior to the enactment of this Ministerial Regulation, remain valid and within a maximum period of 1 (one) year must comply with this MEMR Regulation 26/2021;
3. The Rooftop Solar system that has been built and installed prior to the enactment of this MEMR Regulation 26/2021, within a maximum period of 1 (one) month, the IUPTLU holder must:

1. make adjustments to the value of the Export kWh and the value of the Import kWh of electricity as referred to in Articles 6 paragraph (1); and
2. make adjustments to the calculation of the excess as referred to in Articles 6 paragraph (4).

This publication is intended for informational purposes only and does not constitute legal advice for specific issues, transactions, or matters. Any reliance on the material contained herein is at the reader’s own risk. Any process may reproduce no part of this publication without prior written permission MLO.