Licensing for Rooftop Solar PV Installation in Indonesia

Minister of Energy and Mineral Resources (ESDM) Regulation No. 2/2024 governs the installation of Rooftop Solar Power Plants (PLTS Atap) connected to the grid of PT PLN (the holder of Electricity Supply Business License – IUPTLU). This regulation, effective since January 2024, aims to reduce electricity bills, promote renewable energy utilization, and decrease greenhouse gas emissions.

In general, rooftop solar systems are categorized into three types:

• On-Grid: Directly connected to PLN’s grid. Electricity generated by solar panels offsets electricity consumption from PLN.

• Off-Grid: Not connected to PLN and uses batteries to store energy, making the system fully independent.

• Hybrid: A combination of On-Grid and Off-Grid. The system remains connected to PLN while also equipped with batteries. When solar production is sufficient, loads are supplied from the panels; excess energy is stored in the batteries. If the batteries are depleted and solar is insufficient, the system automatically draws power from PLN, providing higher reliability and flexibility.

  
  

Nevertheless, every On-Grid and Hybrid rooftop solar installation requires authorization from the competent authority in accordance with ESDM Regulation No. 2/2024 to ensure compliance with electrical safety standards. One of the main requirements is obtaining an Sertifikat Laik Operasi (SLO) from an accredited Technical Inspection Institution to verify that the rooftop solar system is safe and operable.

For Off-Grid systems, although not regulated under this ESDM regulation, installations are still recommended to follow applicable national electrical safety standards.

On-Grid Rooftop Solar PV: Licensing Requirements

ESDM now requires every On-Grid rooftop solar installation to secure prior approval. The Secretary General of ESDM has stated that On-Grid rooftop solar owners must obtain approval from PT PLN, as the IUPTLU holder, before installing solar panels. The latest regulation also introduces installation quotas to maintain grid reliability due to the intermittent nature of solar power.

On-Grid Solar Panel Project

Key provisions under ESDM Regulation No. 2/2024 for On-Grid rooftop solar include:

1. Annual Quota: Rooftop solar capacity is determined based on quotas set every five years. Quotas for each PLN UP3 (regional distribution unit) are announced via PLN’s official application or website.

2. No Net-Metering: The export-import mechanism is removed, meaning excess electricity from rooftop solar will not be credited against the customer’s bill.

3. Service Mechanism: Rooftop solar quota applications are served by PLN based on the first-in, first-served (FIFS) principle.

4. Smart Meters: PLN provides and covers the cost of advanced meters to replace conventional export-import meters.

Additionally, the regulation differentiates licensing obligations based on system capacity:

• Customers with a total rooftop solar capacity of more than 500 kW are required to obtain a Izin Usaha Penyediaan Tenaga Listrik untuk Kepentingan Sendiri (IUPTLS).

• For capacities up to 500 kW, customers are only required to report the installation plan to the Minister of ESDM or the Governor before construction.

SMSolar can assist customers in administrative processes such as quota applications to PLN, reporting to ESDM, and obtaining IUPTLS.

Off-Grid Rooftop Solar PV: Requirements

ESDM Regulation No. 2/2024 only regulates rooftop solar systems connected to PLN’s grid (On-Grid). Off-Grid systems are excluded from the scope of this regulation but are still encouraged to comply with national electrical safety standards.

Off-Grid Solar Panel Project

Key points for Off-Grid systems:

1. Exempt from PLN Licensing: Since the system does not export electricity to PLN’s grid, no PLN licensing is required.

2. Self-Sufficient System: Electricity is generated and stored independently (using batteries), making it suitable for remote areas.

   
   

Hybrid Rooftop Solar PV: Smart Combination for Efficiency and Reliability

Hybrid rooftop solar systems combine the characteristics of On-Grid and Off-Grid. Simply put, they generate electricity from solar panels, remain connected to PLN’s grid, and include batteries for energy storage. This allows hybrids to supply electricity during the day and use stored energy at night or during outages.

Although some hybrid systems are designed without an export-import mechanism, their connection to PLN still requires approval from PLN to ensure grid safety and compliance with technical standards.

As with other rooftop solar types, hybrid systems must also meet additional technical requirements, such as obtaining an Sertifikat Laik Operasi (SLO) from the relevant authority.

Solar Inspection

Conclusion

In summary:

• On-Grid and Hybrid rooftop solar systems must obtain approval from PLN in accordance with ESDM Regulation No. 2/2024, which includes quota requirements and the removal of the export-import mechanism.

• Off-Grid rooftop solar systems, being fully independent and not connected to PLN’s grid, do not require PLN approval.

Property owners planning to install rooftop solar must pay attention to their system type. On-Grid and Hybrid systems require approval from PLN and adherence to regulatory procedures. By understanding these licensing differences, building owners can install rooftop solar legally, in compliance with regulations, and maximize the benefits of solar energy.