Shell Solar Indonesia launches trial sales on solar power motors
Shell Solar Indonesia launches trial sales on solar power motors
Phelim Kyne, Dow Jones/Jakarta
The Indonesian unit of Royal Dutch Shell PLC has begun trial sales of consumer solar power generators as part of efforts to diversify the country's energy supply sources, a senior company executive said recently.
Shell Solar Indonesia began door-to-door sales operations on the island of Sumatra in August, targeting rural households currently unconnected to the national electricity grid, Roberto Moran, Country Chairman of Shell Companies of Indonesia, told Dow Jones Newswires.
World Bank data indicate roughly 43 percent of Indonesia's 220 million people don't have electricity and that electrical connection costs in rural areas are 33 percent higher than in urban areas.
"Indonesia is similar to China, the Philippines and Sri Lanka in that we're looking at (selling to) homes in areas where there's significant rural populations not linked to electrical power grids," Moran said.
Shell Solar, part of the overall parent's Shell Renewable division, has been active for more than 30 years and has operations in 75 countries.
The company is marketing its photovoltaic Solar Home Systems product, which includes a solar panel that converts sunlight into electricity, and a storage battery.
Shell currently markets engine lubricant products in Indonesia and is poised to launch a branded line of retail gasoline filling stations in the country.
The company's entry into the renewable energy field in Indonesia coincides with the government's launch of an ambitious energy diversification and conservation campaign aimed to reduce Indonesia's domestic crude oil consumption to 30 percent of the country's total energy mix from the current level of 60 percent within 10 years.
The government plans to cut crude oil consumption by increasing the use of domestically-sourced liquid natural gas and coal. That plan is essential to reduce Indonesia's skyrocketing import costs for crude oil while global prices hover around a record high of US$65 a barrel.
But Moran cautioned that while solar power is an alternative energy source that offers "grassroots quality of life impact", it isn't a quick fix for Indonesia's energy supply challenges.
"In the end, solar's contribution will never be a significant (proportion of Indonesia's energy mix), but it does make significant impact on the customer...in that children can have light at night to study and people can be more productive," he said, without elaborating on what proportion of Indonesia's energy needs solar power could provide.
Shell Solar is targeting lower-income households in Sumatra with cash or access to credit to pay for the firm's Solar Home Systems, Moran said, without elaborating on a price-per-unit.
The company is working with at least one financial institution to provide credit financing for such purchases, Moran said, without naming any respective banks or credit finance companies.
Shell Solar will evaluate consumer demand for its products in Sumatra before considering any possible expansion of its marketing efforts in other parts of Indonesia.
"Within two years we intend to provide 2,000 (units)," Moran said.
"We'll see how it goes, and if we are successful we can move on to other areas."