Indonesia Solar Energy Market Size (2024 - 2029)

Indonesia Solar Energy Market Size Summary

The Indonesia solar energy market is poised for significant growth, driven by increasing demand for renewable energy and the declining costs of solar photovoltaic (PV) technology. Despite the initial setbacks caused by the COVID-19 pandemic, the market is expected to recover to pre-pandemic levels. The country's unique geographical challenges, with a vast archipelago and substantial off-grid regions, necessitate the adoption of solar energy solutions, particularly in rural electrification efforts. The Indonesian government's commitment to enhancing the electrification ratio and the potential for solar to become a central component of the energy system by 2030 further bolster the market's prospects. However, the heavy reliance on fossil fuels remains a significant challenge, although environmental concerns are prompting a shift towards renewable sources.

The market landscape is moderately fragmented, with key players such as Canadian Solar Inc. and PT. Surya Utama Nuansa actively participating in the sector. Recent developments, including international collaborations and financing agreements, are expected to support the expansion of solar PV projects, particularly off-grid installations. Despite the promising outlook for solar energy, the growth of alternative renewable energy sources like wind and hydro power could pose competitive challenges. Nonetheless, initiatives like the Sustainable and Inclusive Energy Programme aim to enhance the regulatory framework and financial incentives for solar energy, potentially mitigating these challenges and fostering market growth during the forecast period.