Minister of Energy and Mineral Resources Regulation No. 2 of 2024: The Recent Regulation on Rooftop Solar Power Plants
Authors
Quota Determination
Previously, MEMR Reg 26/2021 imposed restrictions on the capacity of rooftop solar power plants installed by customers of PT Perusahaan Listrik Negara (Persero) (“PLN”) to be a maximum of 100% of the connected power. Under the new regulation, such limitation has been excluded and instead, Article 7 of the MEMR Reg 2/2024 requires Business Licenses for the Provision of Electrical Power for Public Interests (Usaha Penyediaan Tenaga Listrik untuk Kepentingan Umum or “IUPTLU”) holders to arrange the quota for the development of Rooftop PLTS Systems for each Electrical Power System.
These quotas are to be prepared for a period of five years, broken down annually from January to December, with due consideration to the direction of national energy policy, the plan and realization of the electrical power supply business plan, and the reliability of the electricity system per the provisions in the grid code of IUPTLU holders. The IUPTL holder is required to propose and submit the quota proposal and its technical review documents to the Director General of Electricity (Direktur Jenderal Ketenagalistrikan) with a copy to the Director General of New and Renewable Energy and Energy Conservation (Direktur Jenderal Energi Baru, Terbarukan dan Konservasi Energi or “Dirjen EBTKE”) of the MEMR.
For the years 2024 to 2028, the quota proposal shall be submitted no later than three months after the promulgation of MEMR Reg 2/2024, namely no later than 31 April 2024. As for the proposed quota for the subsequent year, it shall be submitted no later than October before the current year. Failure to comply with the submission requirements may result in administrative sanctions in the form of a written reprimand.
The Director General of Electricity will evaluate such a proposal and stipulate a quota for the rooftop solar power plant development to the IUPTLU holders for the quota to be clustered based on the electrical power system at the customer’s service unit. Within ten business days of its stipulation, this clustered quota shall then be reported to the Director General of Electricity and the Dirjen EBTKE, and/or publicised through the IUPTLU’s official website, application and/or social media.
In the event that the development quota for the rooftop solar power plants at the end of the current year is still available, such excess becomes an additional quota for the following year.
Construction and Installation Application
Prospective customers of rooftop solar power plants will need to apply for the construction and installation to the IUPTLU holders with a copy to the Director General of Electricity and the Dirjen EBTKE. These submissions are to be made in January or July each year. The initial round of submissions should be made of one month after the publication of the clustered quota for rooftop solar power plant development.
Within thirty calendar days from the application deadline, IUPTLU holders are required to review and decide whether to approve or reject such application, with the following mechanism:
a. Approval: If approved within the above period, the IUPTLU holder shall submit a notification to the prospective customer of such approval.
b. Automatic Approval: If the application is neither approved nor rejected within the specified timeframe, the application shall be considered approved. In such cases, MEMR Reg 2/2024 serves as the basis for the approval from the IUPTLU holder to the customer. As a result, the MEMR through the Dirjen EBTKE shall deliver the notification of approval to the IUPTLU holder.
c. Rejection: If the application is rejected, the IUPTLU holder shall provide the customer with a written notification, along with the basis of the rejection. If the application is declined due to the unavailability of the rooftop solar power plant development clustered quota, the customer will be placed on a waiting list for processing in the subsequent period, provided the quota becomes available.
Unauthorised rooftop solar power plants that are operating connected to the IUPTLU holder’s network may be required by the IUPTLU holder to disconnect from the IUPTLU holder’s network and pay a penalty based on the calculation of the total capacity of the inverter multiplied by 240 (two hundred and forty) hours and multiplied by the electricity tariff. If such penalties are not satisfied within one month since its notification is delivered, the IUPTLU Holder may conduct a temporary termination of customer service which shall only elapse after the customer complies with its penalties.
Licensing and Requirements for Construction and Installation
Similar to the previous stipulation in the MEMR Reg 26/2021, the MEMR Reg 2/2024 also includes the licensing requirements for constructing and installing rooftop solar power plants. Article 17 of the MEMR Reg 2/2024 requires customers to obtain a Business License for the Provision of Electrical Power for Personal Interests (Izin Usaha Penyediaan Tenaga Listrik Untuk Kepentingan Sendiri or “IUPTLS”) for the construction and installation of rooftop solar power plants with a capacity of more than 500 kW (five hundred kilowatts) connected in one electricity installation system, which the MEMR or the governor shall grant.
On the other hand, customers who intend to construct and install rooftop solar power plants with a capacity of up to 500 kW (five hundred kilowatts) connected in one electricity installation system, shall have the reporting obligation to the MEMR or the governor.
Further, the construction and installation of rooftop solar power plants must be carried out by business entities per the laws and regulations regarding electricity and electricity safety. Rooftop solar power plants may only be constructed and installed after obtaining approval from the IUPTLU holders. If the rooftop solar power plants have been constructed and installed before its approval, they may only be operated by being connected to the IUPTLU holder networks after obtaining approval from the IUPTLU holders.
Operational Feasibility Certificates (Sertifikat Laik Operasi)
Similar to the provisions outlined in MEMR Reg 26/2021, MEMR Reg 2/2024 also contains requirements for the feasibility of rooftop solar power plants. According to Article 24 of MEMR Reg 2/2024, an Operational Feasibility Certificate (Sertifikat Laik Operasi or “SLO”) is required to be obtained for rooftop solar power plants with a total capacity of more than 500 kW (five hundred kilowatts) connected in one electrical power installation system and for rooftop solar power plants with a total capacity up to 500 kW (five hundred kilowatts) with the technical specifications of the control panel being one integral part. Such SLO must be obtained within a maximum period of six months after obtaining approval from the IUPTLU holder.
Further, rooftop solar power plants with a total capacity of up to 500 kW (five hundred kilowatts) with technical specifications of the control panel being one integral part and can be operated on a plug-and-play basis which have fulfilled certain technical conditions according to MEMR Reg 2/2024 may be declared to have fulfilled the mandatory SLO provision. Additionally, it must be equipped with a statement of responsibility for the electricity safety aspect from the owner of the electricity installation or the business entity that conducted its construction and installation. Such statement is evaluated and issued its registration number by the MEMR, within a maximum period of three months after obtaining approval from the IUPTLU holder.
If the prospective customers have not obtained the SLO or the registration number from the MEMR within the above-mentioned period, the IUPTLU Holders shall cancel the approval for the rooftop solar power plants.
Development of Electronic Applications and Complaint Centre
MEMR through Dirjen EBTKE shall develop an electronic application, which covers various aspects such as application processing, approval/rejection, reporting, and access to electricity production data.
Further, PLN is charged with developing a separate electronic application for its customers, integrated with the Supervisory Control and Data Acquisition (“SCADA”) system or smart grid distribution. Prior to this application’s development, PLN must prepare a roadmap, which should be finalized no later than three months after the promulgation of MEMR 2/2024.
MEMR shall also establish a complaint centre for rooftop solar power plants specified to be within the Dirjen EBTKE, dedicated to receiving and addressing complaints from both customers and IUPTLU holders involved in the rooftop solar power plants program. The centre's location is specified to be within Dirjen ETBKE. A complaint centre team to support the centre's operations shall be formed, consisting of representatives from the MEMR, the Finance and Development Supervisory Agency (Badan Pengawasan Keuangan dan Pembangunan), and independent organisations.
Carbon Pricing
MEMR 2/2024 contains minimal stipulations regarding the carbon pricing associated with the use of rooftop solar power plants, which shall be implemented per the provisions of laws and regulations concerning carbon pricing. However, MEMR 2/2024 introduces a new clause stating that if there are no applicable provisions of laws and regulations in this matter, it is determined that the carbon pricing from the utilisation of rooftop solar power plants shall belong to the government, thus creating limitations and uncertainty for customers who intend to claim or trade its carbon credits from the utilisation of rooftop solar power plants.
Weather Forecast Database
Industrial tariff class customers with rooftop solar power plant systems exceeding 3 MW (three megawatts) capacity are mandated to integrate weather forecast databases with the SCADA system or smart grid of IUPTLU holders. Failure to comply with this requirement may lead to administrative sanctions, specifically a written reprimand imposed by MEMR through Dirjen EBTKE.