Govt prepares feed in tariff for solar power plants

The energy and mineral resources ministry is preparing an attractive feed in tariff for solar power plants in order to attract more investors to provide renewable energy especially those from solar energy, Kompas reported on Monday.

The ministry?s director general of newest and renewable energy Rida Mulyana said in Jakarta last week that the development of solar power plants would be intensified in the future in order to reduce the costly electricity produced from diesel-fired power plants.

Rida said that his office was still discussing the draft of the feed in tariff for solar energy with the Finance Ministry and the office of the coordinating minister for the economy. The discussion also included the plan to exclude negotiation process in determining the sales prices from solar power plants to state electricity company PLN, he said.

He said that the government was currently preparing the tariff for electricity provided by non-battery solar power plants. For the electricity produced by non-battery solar power plants, the government would propose feed in tariff of between 25 and 30 US cent per kilowatt hour (kWh), far lower than the price of electricity from diesel fired power plants which reached 35 US cent per kWh, he said.

In addition, the government will also determine the rate of the local component of the solar power plants which could receive the government?s financial incentives. For a solar power plant with local content of up to 40 percent, the price could reach 30 US cent, he added.

Such an incentive is needed so that the development of the solar power energy could also encourage the development of the local industry, he added. (*)