Community-Based Solar Power Development Requires Large Funding
The development of community-based solar power plants (PLTS) requires substantial funding and broad support, according to Muslims for Shared Action on Climate Impact (Mosaic). Hidayat Tri Sutardjo, General Treasurer of Mosaic, stated in Jakarta on Wednesday that a breakthrough is needed to realise this development. “This development requires a funding strategy and broad support so that the 2060 net-zero emissions target can be achieved,” he said during a discussion on the potential of Islamic finance for community-based PLTS funding.
He noted that new renewable energy has not been optimally utilised, and the country still relies heavily on coal for electricity. Hidayat added that Indonesia possesses abundant sources of new renewable energy, but the initial investment required is significant.
Mosaic is currently seeking funding sources, particularly those based on Islamic finance, given the substantial benefits of new renewable energy. Hidayat explained that the biggest barrier to accelerating renewable energy is often the continued dependence on coal, necessitating strong policies and a gradual transition. “Furthermore, low public literacy due to a lack of education results in minimal support for green economic products and policies,” he said.
In addition, the high investment costs for green energy infrastructure require a comprehensive funding strategy and extensive support. Mosaic is therefore examining how policy, technology, and Sharia financial instruments can collaborate to facilitate community access to solar panel technology. “We hope this discussion can produce concrete recommendations, new collaborations, and real steps that can be implemented immediately,” he added.
Mosaic Program Director Aldy Permana stated that the investment needed to build a 1-megawatt capacity PLTS is approximately Rp22 billion, with an operational lifespan of 20 years. Annual maintenance costs are around Rp330 million. He suggested that Sharia financing could be one source for developing community-based PLTS. “This is one of the efforts to support the government’s plan to build 100 Gigawatts (GW) of PLTS,” he said.