The Institute for Essential Services Reform (IESR) assesses that government policy certainty is the primary factor in driving the acceleration of solar energy investment in Indonesia. According to the institute, the vast potential of solar energy will not develop optimally without the support of consistent regulations and an investment climate that provides certainty for business actors.
The Chief Executive Officer (CEO) of IESR, Fabby Tumiwa, stated that investors’ decisions to commit capital are not solely based on the scale of renewable energy resource potential. Investors also weigh regulatory certainty, project viability, risk levels, and long-term profit prospects before making an investment decision.
Fabby explained that the construction of solar power plants (PLTS) must go hand in hand with the strengthening of national electricity infrastructure. The development of transmission networks, interconnection, system digitalization, and the provision of energy storage technologies are vital factors ensuring that the generated electricity can be optimally absorbed.
According to him, policy certainty needs to be materialized through consistent development targets accompanied by transparent information regarding project schedules, development locations, and the generation capacities to be built each year. This step is deemed capable of sending a positive signal to investors to prepare financing, supply chains, and labor requirements from an early stage.
IESR also evaluates that the availability of bankable projects and support from financing schemes such as concessional loans and blended finance will increase investment attractiveness in the solar energy sector. Furthermore, efficient procurement processes, contract clarity, proportional risk sharing, and definitive electricity purchase mechanisms are considered essential in creating business certainty.
During the Indonesia Solar Summit (ISS) 2026, IESR presented the results of a study on the potential of floating solar power plants (floating PLTS) in Indonesia. The study indicates that the financially viable generation potential reaches 77.8 gigawatts (GW) across 179 locations, consisting of 42.5 GW in reservoirs and lakes as well as 35.3 GW in near-shore coastal waters.
Fabby assesses that the development of floating PLTS could serve as one of the solutions to support the national target of building 100 GW of PLTS, while simultaneously providing a clean electricity supply for industrial estates, special economic zones, regional grid systems, and replacing fossil-fueled power plants entering retirement.
To accelerate investment realization, IESR encourages the simplification of licensing processes, the integration of potential locations into energy planning and spatial planning documents, clarity on marine space utilization rules, and the implementation of a price-based reverse auction mechanism supported by government feasibility studies. This approach is believed to be capable of creating more competitive electricity tariffs while accelerating solar energy development in Indonesia.
