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ECN publication
Policy Brief - Indonesian Feed-in Tariffs: challenges & options
Published by: Publication date:
ECN Policy Studies 30-6-2014
ECN report number: Document type:
ECN-O--14-012 Other
Number of pages: Full text:
8 Download PDF  

The Indonesian government uses Feed-in Tariffs (FiTs) to accelerate the deployment of renewable energy, in particular for small and medium scale projects up to 10 MW. FiTs provide private investors with known, guaranteed and consistent revenue that can help make a viable business case for renewable energy projects, which may have higher generation costs. However, the success of a FiT system depends on its design, adequate tariffs and the flexibility of the system to adjust to macroeconomic changes. The recent variability in the value of the Rupiah and rising domestic interest rates in Indonesia has had serious negative impacts on the viability of renewable energy projects. This policy brief introduces the Indonesian FiT system, analyses the impact of recent currency depreciation and monetary inflation, as well as provides some options for revising the FiT system to improve its effectiveness.

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