Dianing Novita Nurmala Putri, Fariz Maulana Rizanulhaq , Tyas Kartika Sari, Maula Sukma Widjaja, Chairul Gagarin Irianto

Techno-Economic of Rooftop Solar Power Plants for Residential Customer in Indonesia

Introduction

Techno-economic of rooftop solar power plants for residential customer in indonesia. Analyze residential rooftop solar PV techno-economics in Indonesia. Larger systems (7.7kWp+) achieve positive NPV, sub-10yr payback, and significant savings vs. PLN, guiding policy.

Abstract

This study evaluates the financial viability of grid-connected rooftop photovoltaic (PV) systems across seven Indonesian residential types (2.75-19.8 kWp) under current market conditions. Using a discounted cash flow model with 8% discount rate and a 20-year project lifetime, key metrics including Net Present Value (NPV), Levelized Cost of Electricity (LCOE), and payback period have been analysed. Results demonstrate that system economics improve significantly with scale: while small systems (2.75 kWp) yield negative NPV (-Rp 9.71 million) and 12.4-year payback, larger installations (>7.7 kWp) achieve positive NPV (up to Rp 89.95 million for 19.8 kWp systems) and sub-10-year payback periods. The LCOE ranges from Rp 1,082-1,205/kWh, representing 11-36% cost savings compared to PLN's tiered tariffs (Rp 1,352-1,699.53/kWh). Monthly savings scale proportionally with system size, from Rp 323,378 (2.75 kWp) to Rp 2.84 million (19.8 kWp). A critical 7.7 kWp capacity threshold emerges for self-sustaining viability without subsidies, with 3500+ VA customers benefiting most due to higher avoided tariffs. These findings provide policymakers with evidence to design tiered incentive programs targeting underperforming market segments (<6 kWp systems), while confirming the commercial readiness of larger residential-commercial hybrid systems in Indonesia's solar transition.

Review

This study presents a timely and detailed techno-economic evaluation of grid-connected rooftop photovoltaic (PV) systems for residential customers across seven distinct capacity types in Indonesia. Leveraging a robust discounted cash flow model over a 20-year project lifetime with an 8% discount rate, the authors provide a comprehensive assessment of financial viability through key metrics such as Net Present Value (NPV), Levelized Cost of Electricity (LCOE), and payback period. A significant strength lies in its clear demonstration of economies of scale, identifying a critical 7.7 kWp threshold for positive NPV and sub-10-year payback periods, while also quantifying substantial cost savings (11-36%) compared to PLN's tiered tariffs. This granular analysis, including monthly savings, offers practical insights into the commercial readiness of larger installations and the financial barriers for smaller systems. While the abstract presents a compelling case, a full review would ideally scrutinize certain underlying assumptions and limitations. For instance, the choice of an 8% discount rate could be further justified or subjected to sensitivity analysis, given potential variations in the local financial landscape and perceived investment risks. The abstract mentions "current market conditions" but does not detail potential future shifts in PV component costs, PLN tariff structures, or evolving net metering regulations, all of which could significantly impact long-term financial viability. Additionally, while LCOE and cost savings are calculated, the abstract does not explicitly detail the breakdown of initial capital expenditures, operational and maintenance costs, or the specific net metering policy, which are crucial for a complete understanding of the financial model's robustness and applicability. Despite these potential areas for further elaboration, this study delivers highly valuable and actionable insights for stakeholders involved in Indonesia's renewable energy transition. The identification of specific capacity thresholds and the varying financial performance across system sizes offers a strong empirical basis for policymakers to design targeted incentive programs, particularly for underperforming market segments (e.g., <6 kWp systems). Furthermore, the confirmation of commercial readiness for larger residential-commercial hybrid systems provides confidence for developers and investors. Overall, this research significantly contributes to the understanding of rooftop solar economics in a key emerging market, serving as an important evidence base for accelerating solar adoption and fostering a more sustainable energy future in Indonesia.

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