Indonesian state-owned banks have launched several special financing schemes for rooftop photovoltaic (PV) panels this year to help the government achieve its renewable energy targets.

Bank Mandiri, Bank Rakyat Indonesia (BRI) and Bank Negara Indonesia (BNI), which are among the Southeast Asian country’s five biggest banks, launched their respective financing schemes between January and June. The loans are intended to reduce the upfront costs of installing solar panels.

Indonesia Solar Energy Association (AESI) chairman Fabby Tumiwa told the Jakarta Post on July 13 that residential rooftop solar panel use had increased from about 200 to 3,000 households over the past three years.

“More affordable financial schemes will help spur this growth,” said Fabby, who is also the executive director of the Institute for Essential Services Reform (IESR), an energy think tank.

He added that such financing schemes would be best suited to middle-class households whose power capacities were over 2,200 volt-amperes (VA) and whose monthly power bills were over 700,000 rupiah ($48).

Rooftop solar power could serve roughly seven million households, he added, and was a potentially lucrative market.

The government expects solar power, one of the world’s fastest growing renewable energy technologies, to lead the way to achieving at least 23 per cent renewable energy in the country by 2025 and at least 31 per cent by 2050, as dictated by the National General Energy Planning (RUEN) road map.

In 2017, the AESI, the Indonesian Renewable Energy Society (Meti), the ministries of Industry, and Energy and Mineral Resources, and several other organisations launched a separate initiative to have one million Indonesian households with rooftop solar panels by 2025.

Bank Mandiri, the country’s largest bank by asset value, launched a programme in May that offers Greater Jakarta residents solar panel loan packages that range from a 20 million rupiah loan for a one kilowatt peak (kWp) PV unit to a 70 million rupiah loan for a 5kWp unit.

The loans are being offered in collaboration with the National Energy Council (DEN) and state-owned electronics manufacturer PT LEN Industri.

“Indonesia’s solar panel market has quite a lot of potential. Moreover, the use of solar cells is a form of long-term investment for households, as it allows customers to obtain energy sources that are more prudent and efficient,” said Bank Mandiri Corporate Secretary Rudi As Aturridha on July 14.

BRI, the country’s second-largest bank by asset value, launched a similar programme in January in collaboration with DEN and LEN Industri. The lender offers a solar panel loan with a duration of up to 15 years and an interest rate of around 0.92 per cent.

BRI corporate secretary Aestika Oryza Gunarto said on July 14 that the scheme would be implemented through the Briguna credit programme, wherein the bank deducts loan installments from borrowers’ payrolls.

“BRI projects an increase in interest income from Briguna loans in the rooftop solar power plants market, in line with the development of similar collaborations with other companies that are using BRI payroll,” he said.

BNI launched its own solar panel loan programme in June in partnership with publicly listed solar panel producer PT Sky Energi Indonesia.

The state-owned lenders’ programmes were only preceded by Singapore-based private lender UOB Indonesia, which launched its U-Solar financing scheme in November 2019 in partnership with PT Selaras Daya Utama and TML Energy. The U-Solar programme is offered throughout Southeast Asia.

Energy ministry renewables director-general Dadan Kusdiana said on April 15 that the government aimed to have 2.14GW of solar power capacity installed by 2030, 648.7MW of which would be installed at households, 742MW at state-owned enterprises and 624.2MW in industries and business.

“We are optimistic that the addition of new PV cells can reduce greenhouse gas emissions by 3.2 million tonnes of carbon dioxide equivalent,” he said.