Solar Power Generation Costs Fell 19% in 2022

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Adi Ahdiat 14/06/2023 13:10 WIB

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In 2022, the average cost of solar power generation in Indonesia was Rp1,034.52 per kWh, a 19% decrease compared to 2021.

Average Electricity Generation Costs of Solar Power in Indonesia (2020-2022)

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Solar Power Generation Costs Fell 19% in 2022

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Average Electricity Generation Costs of Solar Power in Indonesia (2020-2022)

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Many countries are striving to achieve energy transition through the utilization of solar power. According to the International Energy Agency (IEA), solar energy is widely relied upon because its generation technology is relatively inexpensive.

"The price of photovoltaic modules has fallen by 80% over the last decade thanks to continuous innovation across the supply chain. Solar photovoltaic energy has become the most affordable electricity generation technology in many regions," stated the IEA in its *World Energy Outlook* report, October 2022 edition.

This decrease in solar energy prices appears to be occurring domestically as well.

According to the *PLN 2022 Statistical Report*, throughout last year, the average cost of generating solar power (PLTS) in Indonesia was Rp1,034.52 per kilowatt-hour (kWh).

This cost has decreased by approximately 19% compared to 2021, and is even 91% cheaper than in 2020, with details as shown in the graph above.

However, the production cost of PLTS is still more expensive than that of steam power plants (PLTU), which generally use coal as fuel. In 2022, the cost of electricity generation from PLTU was only Rp737.52 per kWh.

Meanwhile, PLN continues to strive to accelerate the energy transition and make it affordable. One of these efforts is through collaboration with Kreditanstalt für Wiederaufbau (KfW), a German development bank.

On March 1, 2023, KfW signed an agreement to provide PLN with Rp10.7 trillion in financing support to accelerate the energy transition in Indonesia.

"Cooperation in the decarbonization of the energy sector will be one of KfW's main focus areas in the coming decades. We hope this support will make PLN more focused," said Bernd Loewen, Head of Finance at KfW, in a press release on PLN's official website (1/3/2023).

"We support Indonesia in developing a sustainable and climate-friendly energy sector to secure a long-term and cost-effective electricity supply for the entire population," Loewen added.

Editor : Adi Ahdiat

"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."