Government: US 114% Tariff Opens Opportunities for Local Solar Panel Market
The Indonesian government views the imposition of additional import duties of up to 114 per cent by the United States on Indonesian solar panel products as an opportunity to increase production absorption within the domestic market.
Elen Setiadi, Deputy for Energy and Mineral Resources Coordination at the Coordinating Ministry for Economic Affairs, stated that this condition presents an opportunity to strengthen the domestic solar panel market.
“Our solar panel industry previously exported to America. However, following the imposition of additional duties of up to 114 per cent, this potential and opportunity can now be absorbed domestically,” Elen said in Jakarta on Wednesday.
According to Elen, the national solar module industry has currently developed with a production capacity of approximately 11 gigawatts (GW) per year. This capacity can be utilised to support the accelerated development of solar power plants (PLTS), including the 100 GW solar power programme.
The 100 GW solar programme is projected to potentially create 5.5 million green jobs, reduce emissions by approximately 140 million tonnes of CO2, and generate savings of up to around Rp74 trillion per year.
She noted that the development of solar power plants needs to go hand-in-hand with the strengthening of the national solar panel industry, ensuring that the increase in power generation capacity also creates added value within the country.
Currently, the Coordinating Ministry for Economic Affairs records 34 domestic solar module manufacturers with an annual production capability reaching 10,994 megawatt peak (MWp). The maximum capacity of modules that can be produced reaches approximately 720 watt peak (Wp) per module, with an average local content requirement (TKDN) of around 40-55 per cent.
However, the development of this industry still faces several challenges, including low solar power plant project realisation and minimum TKDN regulations that still allow for the use of imported solar modules.
Additionally, the government noted that the provision of quotas for rooftop solar power remains limited, and applications for rooftop solar use from the industrial sector cannot yet be fully accommodated.
According to Elen, strengthening the domestic market must be accompanied by the development of the supply chain to reduce dependence on the global market, particularly for raw materials such as wafers and ingots.
The government has proposed non-fiscal incentives to encourage the use of domestic solar modules, including providing larger rooftop solar quotas for users of local products.
“If our 100 GW target can be implemented, our industry can also be developed; currently, our potential stands at 11 GW,” she added.
Furthermore, the government is encouraging partnerships between local and global companies to support investment, technology transfer, and the strengthening of the national solar panel industry supply chain.