Shaping Tomorrow’s Sun: Inecosolar’s Innovations in Indonesia’s Solar Industry – Benoît Prim, Founder And Managing Director, PT Inecosolar Solutions

1. Can you provide an overview of the current state of the solar technology market in Indonesia? How has it evolved in recent years, and what are the key factors influencing its growth?

The Indonesian solar market is picking up again. Covid and lack of harmonization between the regulator (Ministry of Energy and Mineral Resources – MEMR / ESDM) and the grid utility (Perusahan Listrik Negara (PLN)) resulted in a market contraction in 2021-2022. But in 2023, PLN started approving more rooftop solar projects and the drop in panel prices helped the market recovering. Moreover, a PLN subsidiary utility scale project tender for 1GWp+ is reviving utility scale projects. 

For the rooftop Commercial and Industrial (C&I) market, many multi-national companies (MNCs) need to reduce their carbon footprint to meet their Environmental, Social and Governance (ESG) targets. Given that ~86% of the electricity in Indonesia comes from fossil fuels, many MNCs see rooftop solar as an easy option to fulfill their ESGs commitments as solar energy is green, cheaper and cheaper, and with more financing options (zero upfront cost) available.

The residential market is also growing thanks to the dropping costs of solar panels and higher electricity prices for larger consumers, making attractive payback period of less than 4 years on the best projects!

So in a nutshell, the Indonesian solar market is growing again.

2. What challenges and opportunities do you see for Inecosolar in the solar technology deployment landscape in Indonesia? How is the company positioning itself to navigate these challenges and leverage the opportunities?

The main hurdle right now is the regulation / permitting misalignment between government stakeholders. Oversupply of electricity on the grid and coal being a dominant industry in the country also impair the energy transition for now. Our strategy is to maintain close contact with the government stakeholders, we want to work hand in hand with them to make every project a success. We ask permission before installing a project while the opposite used to be the norm among our competitors.

Another main hurdle of a solar project, everywhere in the world, is financing. Inecosolar started as a residential installer in Bali, gaining skills, experience and reputation for quality solar installation at competitive price with outstanding customer care. Thanks to our strategic investor, Yinson Renewables, the renewable business unit of Yinson Holdings Berhad, a global energy infrastructure and technology company headquartered in Malaysia, we can now offer zero upfront cost to our C&I customers. This only eases the decision-making process: we pay for the solar system, the customer only pays for the electricity generated.

Now how do we differentiate ourselves from the competition? There are many other solar developers with the same business model. But because we know how to design, procure and install solar systems from our residential activities, we propose a more efficient and aggressive business model where we cut the middlemen (financiers or contractors) and do everything ourselves. This results is a lower IDR/kWh for our customer and an ease of process: we are in charge of the project from start to finish. 

This innovative business model also allows us to offer financing options for smaller C&I projects, from 100kW+, while other developers usually need 500kW+, and reaching a wider customer base.

3. Indonesia has been making efforts to increase its renewable energy capacity. How, as the leader of Inecosolar, do government policies and initiatives impact the solar technology sector, and how is Inecosolar aligning its strategies with these policies?

Indonesia just revised its renewable energy target from 23% by 2025 to 17-19% to be more realistic. This, in my opinion, is lacking ambition given the climate risk emergency and the impact it will have on Indonesia and its people. This is mostly due to conflicting interests from decision makers who are involved in the coal industry and the need for energy transition benefiting the wider population. 

A new rooftop policy will remove the financial benefit of the net metering scheme: if energy is exported to the grid, it won’t be valued anymore. This will impact the financial attractiveness of solar, especially for residential users who consume less energy during daytime hours when the solar system generates the most electricity. For Inecosolar, this means sizing the solar system adequately, so the customer gets the best return on investment.

4. Could you share insights into the specific innovations that Inecosolar is implementing to stay at the forefront of the solar technology industry? How do these innovations contribute to the company’s competitive advantage?

Our business model is our best innovation: delivering the solar system by ourselves at cost allows us to keep control over the cost, quality and timing of the project. Better discounts on the electricity price and being able to finance smaller C&I clients stand us apart from the competition. Also, as we are the developer, financier and contractor, we look after all the regulatory approval ourselves which simplify the process for the customer: we provide them with solutions, not problems.

Finally, our team of friendly, motivated and skilled people is key to our success: we find solutions for our clients and make it happen. We found out that customers care was something missing in the market. and which could make a big difference. This gained us many returning clients on residential projects, and we are starting to see the same trend on the C&I ones. 

5. What is your vision for the future of solar technology in Indonesia? How does Inecosolar plan to contribute to the growth and sustainability of the solar industry in the country under your leadership?

Solar, like sustainability, is unstoppable because climate change is already having a tremendous impact on our lives. It’s like the internet 20 years ago, those who didn’t believe in it are not here to talk about it anymore.

Solar is still in its infancy in Indonesia, which is the fifth largest population in the word (~275 million people) and the powerhouse of Southeast Asia. This means that solar will only continue to grow and we are targeting to be one of the main energy-as-a-service providers in Indonesia. 

Outside grid connected residential and C&I projects, we are also looking at utility scale projects and came across opportunities for off-grid projects – reducing the consumption of diesel for generators or industrial estates looking at getting renewable energy to attract companies. We target to install 100MW+ over the upcoming years.