A Technical and Economic Potential of Solar Energy Application with Feed-in Tariff Policy in Indonesia

Abstract This paper presents a technical and economic potential of Solar Energy Application in Indonesia. Indonesia consists of thousands islands. Meanwhile, according to the latest data from the Department of Energy and Mineral Resources in 2012, Indonesia's electrification ratio is only around 74%. Renewable energy especially solar energy is one of the most potential energy sources as Indonesia lies in the equator line where the daylight is abundant and available throughout the year. The solar energy technologys is also eco-friendly and its application has the potential to reduce the greenhouse gas emission. A review of solar energy potential in Indonesia based on the solar resource data is presented. Estimation of solar resource in Indonesia was done using solar radiation data from NASA Surface Meteorology and Solar Energy (SSE). Retscreen software was used for all of the calculation in the study. It is found that the proposed system can generate electricity annually vary from 0.46 GWh/year in Denpasar to 217 GWh/year in Pontianak. This paper also calculates the economic viability through pre-tax IRR and simple payback indicator. It was observed that the highest IRR was observed in Makassar and the lowest IRR was observed in Banjarmasin. Meanwhile, it can be observed that Makassar got the shortest payback period for 11 years and Banjarmasin got the longest payback period of 17.6 years. From the side of environmental impact, the proposed system can reduce the GHG emission up to 243252 tons per year in particular selected location.