Solar Power Investment in Indonesia: 2026 Investor Guide

Solar power investment in Indonesia covers capital invested in solar generation, rooftop systems, equipment manufacturing, project development, and supporting services. Indonesia is planning far more solar capacity than it has built so far, but national targets alone do not tell you whether a particular project can earn revenue.

For an investor, the practical starting point is the business model. A utility scale power producer, an industrial company installing rooftop solar, a module manufacturer, and an EPC contractor may all operate in the solar sector, yet they face different investment, licensing, and commercial requirements.

Why Is Indonesia Attracting More Solar Investment in 2026?

Indonesia has put solar at the center of its next electricity expansion cycle. The Ministry of Energy and Mineral Resources states that RUPTL PLN 2025-2034 plans 69.5 GW of additional generation capacity. Renewable energy accounts for 42.6 GW, while solar alone accounts for 17.1 GW.

Solar is therefore the largest individual renewable generation category in the current RUPTL. Hydro follows at 11.7 GW, while the plan also includes wind, geothermal, bioenergy, nuclear, and energy storage.

The investment numbers need a little care. The Directorate General of Electricity puts the overall RUPTL investment opportunity at about Rp2,967.4 trillion. Of that amount, around Rp2,133.7 trillion is associated with power generation. These are systemwide RUPTL figures, not estimates of how much capital will flow into solar alone.

The plan also expects a large role for Independent Power Producers. That matters to private investors because a substantial portion of generation development is expected to sit outside PLN’s own balance sheet.

If you are still comparing solar with geothermal, hydro, wind, or other technologies, start with InvestinAsia’s renewable energy investment overview. The rest of this guide deals specifically with solar.

What Does Indonesia’s 100 GWp Solar Program Mean for Investors?

The 100 GWp solar program gives investors another policy signal, but it should not be confused with a fully allocated project pipeline. The government launched the program on August 25, 2026, alongside 14 initial solar projects totaling about 5.3 GWp across six provinces.

The Ministry of Energy and Mineral Resources also reported the President’s target of building 100 GWp of solar capacity within three years.

The implementation framework is still developing. As of September 8, 2026, the proposed Presidential Regulation for accelerating the program was still being discussed among ministries and government agencies. Tendering for projects under the program was also reported as awaiting that framework.

For investment screening, treat the 100 GWp figure as a policy target until a specific project has a defined procurement route, project company structure, site, grid connection, offtake arrangement, and tender timetable.

Which Solar Investment Model Fits Your Strategy?

A solar investment works differently depending on who pays the Indonesian business and what the company sells. Sorting this out early prevents licensing and corporate structure decisions from being based on an overly broad description such as “renewable energy company.”

A third party rooftop structure needs extra attention if the project company earns revenue by supplying electricity to another party. The commercial label used in a contract does not determine the electricity licensing treatment. The actual activity does.

Can Foreign Investors Set Up a Solar Company in Indonesia?

Foreign investors can establish a PT PMA for eligible solar activities, but foreign ownership should be checked against the exact activity, generation capacity, and current OSS mapping.

Presidential Regulation No. 10 of 2021, as amended by Presidential Regulation No. 49 of 2021, remains the core investment list framework. It broadly liberalized foreign investment, but it does not make every electricity activity available on identical terms.

One important exception applies to small generation. Under the investment list framework, electricity generation below 1 MW is allocated to cooperatives and MSMEs. Because that restriction was drafted against the earlier KBLI structure, investors should confirm how it is currently mapped in OSS after the introduction of KBLI 2025.

Generation above that threshold, equipment manufacturing, construction, engineering, trading, and maintenance can each follow a different ownership and licensing analysis. Check the Positive Investment List guide against the specific activity rather than relying on the general label “solar business.”

Which KBLI Applies to Solar Power Generation?

Under KBLI 2025, renewable electricity generation falls under KBLI 35120. The classification includes electricity generation from renewable sources such as solar photovoltaic systems.

This is a change from KBLI 2020. Under the older classification, code 35111 broadly covered electricity generation. BPS split that activity in KBLI 2025:

• 35111 now covers non-renewable electricity generation that produces emissions.
• 35112 covers specified non-renewable generation that does not produce emissions.
• 35120 covers renewable electricity generation.

This distinction matters when reading older investment guides, deeds, licenses, or feasibility documents. A reference to 35111 in an older document does not automatically mean the project has the wrong activity classification today.

BPS stated in April 2026 that business licenses issued before KBLI 2025 remain valid. Where the underlying purpose and scope of the business have not changed, the government can convert the numerical code through OSS and AHU without requiring a new license solely because the classification changed.

For a deeper explanation of how classification affects licensing, read InvestinAsia’s KBLI guide for foreign investors.

How Much Capital Does a Solar PT PMA Need?

A solar PT PMA has two separate capital concepts to plan for: issued and paid-up capital, and total investment value.

Minister of Investment and Downstreaming/Head of BKPM Regulation No. 5 of 2025 generally requires at least Rp2.5 billion in issued and paid-up capital per PT PMA, unless another rule sets a different amount.

The general investment value remains above Rp10 billion, excluding land and buildings, per five-digit KBLI per project location. The regulation contains special calculation rules for certain activities, so investors should confirm the formula that applies to their project rather than treating Rp10 billion as a universal project budget.

InvestinAsia explains the distinction between these two figures in its guide to PT PMA minimum capital requirements.

Once the business model, ownership eligibility, and KBLI have been checked, the company can move into incorporation and OSS registration. InvestinAsia’s PT PMA setup guide covers the wider registration sequence.

What Licenses Can a Solar Project Need in Indonesia?

Solar projects do not share one universal permit package. Government Regulation No. 28 of 2025 sets the current risk based business licensing framework, while Minister of ESDM Regulation No. 7 of 2026 provides current business activity standards for the energy and mineral resources sector.

The required approvals depend on what the Indonesian company does, its risk classification, generation or service activity, location, and project configuration.

Company Activity and OSS Registration

The deed and OSS profile should cover the activities that will actually generate revenue. Electricity generation, equipment manufacturing, construction, trading, and maintenance should not be treated as interchangeable activities.

Site and Environmental Requirements

A ground mounted solar project may need to address land control, spatial conformity, environmental approvals, access, and building or infrastructure requirements. The exact requirements depend on the project site and physical footprint.

Electricity Sector Business Licensing

Electricity activities can require additional Business Licensing, Business Licensing to Support Business Activities, technical standards, certification, or operational approvals depending on the activity and risk level. For activities that require these additional approvals, an NIB by itself may not be sufficient.

Technical Readiness

Generation projects can also face technical requirements relating to interconnection, installation, testing, commissioning, and certification. A corporate registration timeline should therefore be kept separate from the project development timeline.

Investors can review the broader framework in InvestinAsia’s guide to industry specific licenses after PT PMA registration. For filing assistance, see the business licensing service.

What Happens If the KBLI or Permit Structure Does Not Match the Project?

A classification that does not match the company’s actual operations can lead to OSS, corporate, or licensing adjustments. It can also affect compliance with activity specific permits and standards.

The consequences depend on the requirement involved and the risk classification. Government Regulation No. 28 of 2025 replaced Government Regulation No. 5 of 2021, so licensing checklists built around the older regime should be reviewed before they are reused for a 2026 project.

InvestinAsia’s guide to the risks of operating without the required permits explains why corporate registration and operational licensing should be treated as separate compliance steps.

How Do PLN Procurement and PPAs Affect Utility Scale Solar?

For a utility scale solar project selling electricity to PLN, a national capacity target does not create an automatic right to sell electricity. Investors need a procurement path and an offtake structure that can support the project’s revenue assumptions.

Presidential Regulation No. 112 of 2022 provides an important part of the renewable electricity development, procurement, and pricing framework. Minister of ESDM Regulation No. 5 of 2025 then sets the current guideline for renewable electricity PPAs.

The PPA regulation covers subjects such as contract term, rights and obligations, risk allocation, commercial operation, electricity transactions, project performance, termination, price adjustment, disputes, force majeure, domestic product use, environmental attributes, and refinancing.

A signed PPA still needs project specific review. Investors and lenders will usually care about tariff mechanics, completion obligations, interconnection, dispatch or curtailment exposure, payment security, change in law, termination compensation, and other provisions that affect projected cash flow.

How Do Indonesia’s Rooftop Solar Rules Affect Project Economics?

For rooftop systems governed by Minister of ESDM Regulation No. 2 of 2024, project economics now depend much more heavily on electricity consumed at the site. Surplus electricity exported to the IUPTLU network is no longer credited against the customer’s electricity bill under the new regime.

The old connected load cap was also replaced with a quota based system. The relevant quota therefore becomes part of project feasibility alongside roof area, technical design, and customer demand.

There is an important transition rule. Article 47 preserves the previous export-import calculation and, where relevant, capacity charge treatment for certain rooftop systems that were already operating or had obtained approval before the new regulation took effect. That treatment can continue for 10 years from the relevant approval.

Before modeling a rooftop investment, first determine whether the installation falls under the new regime or a qualifying legacy approval.

For a new industrial project, the site’s hourly electricity demand is especially important. A facility that consumes most solar output during operating hours may capture much more value than one that exports a large share of afternoon production without receiving bill credit for the surplus.

What Should Solar Investors Know About TKDN in 2026?

TKDN should be checked during procurement planning, not after equipment suppliers have been selected. Minister of ESDM Regulation No. 11 of 2024 governs domestic product use for electricity infrastructure, while Minister of ESDM Decision No. 191.K/EK.01/MEM.E/2024 sets minimum combined domestic content values for electricity infrastructure projects.

Official ESDM material on that implementing decision states a 20% minimum combined goods and services TKDN value for PLTS projects. Investors should still verify the threshold and tender requirements that apply when procurement starts because implementation rules and project documents can add practical conditions.

The temporary PLTS relaxation should no longer be treated as available for a new 2026 procurement. The transitional arrangement allowed qualifying projects to use imported solar modules only through June 30, 2025, subject to conditions that included a PPA signed by December 31, 2024 and planned commercial operation by June 30, 2026.

A current procurement model should therefore check module sourcing, component certification, combined TKDN calculation, verification requirements, and tender specific provisions rather than copying assumptions from an older project.

For the wider compliance context, see InvestinAsia’s guide to TKDN requirements for foreign companies.

What Should You Verify Before Investing in an Indonesian Solar Project?

A useful solar investment screen has six gates. Clearing them will not eliminate development risk, but it can expose weak assumptions before they become sunk costs.

For a project acquisition or joint venture, these solar specific checks should sit alongside corporate, land, tax, employment, litigation, and contract diligence. InvestinAsia’s Indonesia investment due diligence checklist covers that broader transaction review.

Can Solar Projects Receive Investment Incentives in Indonesia?

Eligible renewable energy investments may qualify for fiscal or non-fiscal facilities under Indonesia’s investment and renewable energy framework. Eligibility is not automatic.

The result depends on the business activity, investment profile, project location, applicable incentive instrument, and the rules in force when the application is made. Investors should therefore keep incentives outside the base financial case until the specific facility and eligibility conditions have been confirmed.

For a wider overview, see InvestinAsia’s guide to green technology and renewable energy investment incentives.

Is Solar Power Investment in Indonesia a Fit for Your Strategy?

Indonesia’s solar policy direction is stronger in 2026 than it was a few years ago. RUPTL assigns 17.1 GW to solar, private participation is expected across much of the generation pipeline, and the government has added a separate 100 GWp policy initiative.

That does not make every solar proposal investable. A utility scale developer still needs a procurement and offtake route. A rooftop investor needs a usable quota and enough on-site demand. A manufacturer needs the right industrial activity and supply chain plan. Every foreign investor also needs to check ownership, KBLI, capital, and licensing against the activity that will produce revenue.

The practical sequence is to define the business model, clear the project gates, confirm the regulatory route, and only then build the Indonesian corporate structure around it.