Indonesia's Ambitious Renewable Energy Expansion Hindered by PLN Quotas
Indonesia is planning a significant expansion of its renewable energy capacity, aiming to add around 53 gigawatts (GW) of generating capacity and storage over the next decade. However, strict quotas by the state-owned utility PLN are currently limiting the growth of rooftop solar installations, which is dampening investor enthusiasm.
China's LONGi Green Energy Technology has recently announced a tie-up with Pertamina to manufacture solar panels in West Java. Similarly, Trina Solar has opened a factory in Central Java, producing 1 GW of next-generation solar panels, with the capacity to triple production if needed. These investments are part of a broader trend of Chinese clean energy firms investing in solar panel manufacturing in Indonesia. Since 2022, Chinese firms have pledged about $70 billion in Indonesian renewables, EV, and battery ventures.
Despite these investments, Indonesia's slow uptake of clean energy risks slowing Chinese investment in the country. Indonesia currently has only 560 MW of solar power feeding the grid, with nearly 15 GW of utility-scale solar projects in the pipeline. PLN's quotas cap rooftop solar capacity at 3 GW annually, ranging from 162 MW to 410 MW. This underdevelopment in the renewables market contrasts with China's 198 GW of total solar capacity installed in the first five months of 2025.
Indonesia's ambitious renewable energy targets require a supportive regulatory environment to attract and maintain investor interest. While Chinese firms are investing in solar panel manufacturing, the slow growth of solar power installations may hinder further investment. Addressing PLN's quotas and accelerating the grid connection of utility-scale projects could help Indonesia achieve its clean energy goals.
