Indonesian Photovoltaic Policy 2025
Major Relaxation of Entry Barriers: Comprehensive Adjustment of TKDN and Trade Restrictions
In April 2025, Indonesian President Prabowo Subianto announced market-oriented reforms in the photovoltaic sector, with key breakthroughs concentrated in three key areas:
Flexibility of TKDN certification: The unified localization requirement for photovoltaic modules will be abolished, replaced by a "project-differentiated assessment" approach. PV projects with foreign financing exceeding 50% are exempt from TKDN review, while ordinary commercial projects only need to submit a "localization improvement plan" to participate in bidding. This represents a significant relaxation compared to the previous implicit 47.6% requirement for hydropower plants.
Full Elimination of Import Controls: The three-year-old import quota system for photovoltaic equipment will be abolished. The technical review process for key components such as inverters and energy storage batteries will be streamlined, reducing the average customs clearance time from 14 days to 3 days. Foreign ownership liberalization: Foreign investors are allowed to hold 100% of the shares in PV manufacturing projects, eliminating the need to form joint ventures with Indonesian state-owned enterprises (previously requiring a minimum of 20% local ownership). LONGi's 1.6GW module factory has benefited from this policy, achieving full ownership.
Project Expansion: From Millions of Villages to Full Coverage in the New Capital
In August 2025, the Indonesian Ministry of Energy announced three landmark project policies:
"Million PV Villages" initiative: With an investment exceeding US$20 billion, the project will deploy "1MW PV + 4MWh energy storage" microgrids in 80,000 remote villages. The first 10,000 villages will be connected to the grid by the end of 2025, with priority given to sourcing locally manufactured modules (Chinese companies' Indonesian factories can directly participate).
New Capital Green Power Mandatory Policy: All new buildings in the new capital of Nusantara must install rooftop PV. All government-funded projects must utilize integrated PV and energy storage solutions. Huawei has already entered the market with a 50MW PV and energy storage project, and plans to add a 2GW floating PV cluster. The RUPTL 10-Year Plan has been implemented: The 2025-2034 electricity plan specifies 17.1 GW of new photovoltaic capacity, including 12 GW for centralized power plants and 5.1 GW for distributed photovoltaics, a 40% increase compared to the 2024 version.
Subsidies and Incentives: A Two-Pronged Approach of Fiscal Increases and Market Cultivation
Indonesia's PV Subsidy System in 2025 Demonstrates "Precision Drip Irrigation" Features:
Electricity Subsidies Significantly Expanded: Electricity subsidies in the national budget will increase from IDR 73.24 trillion in 2024 to IDR 90.22 trillion, 30% of which will be earmarked for photovoltaic project tariff subsidies. The feed-in tariff (FIT) for commercial and industrial photovoltaics will be increased to US$0.06/kWh. Special Subsidies for Enterprise Exhibitions: Small and medium-sized enterprises participating in the Indonesian International Solar Energy Exhibition can receive a 50-80% booth fee subsidy. The November 2025 exhibition attracted a large number of Chinese companies, including Longi and Sungrow, demonstrating a significant policy stimulus effect.
Technology Innovation Incentives: New technology projects such as floating photovoltaics and perovskites can receive an additional 30% land use subsidy. The Cirata project has passed the technology innovation certification and received an additional 12 billion rupiah in funding.
Upgraded Energy Targets: Accelerating Transformation in Accordance with International Frameworks
Based on the JETP (Just Energy Transition Partnership) plan, Indonesia has updated its policy targets:
By 2030, the proportion of renewable energy will be increased from 23% to 34%, and the photovoltaic installed capacity target will jump from 5.3GW to 17.1GW.
PV will be included in the downstream development roadmap for 28 strategic commodities, developing in tandem with nickel ore deep processing and green manufacturing, with the goal of forming a photovoltaic industry cluster worth hundreds of billions of yuan.
*The above policies can be found in their original texts on the official websites of Indonesian government departments (Presidential Office, ESDM, Ministry of Finance, BKPM) or authoritative international organizations (JETP Secretariat, ASEAN Energy Center).