Indonesia’s proposed 100 GW solar program could trigger one of the country’s largest reallocations of energy investment as rising coal-generation costs improve the commercial case for solar, wind and battery energy storage systems.
IEEFA analysis of Indonesia’s 100 GW solar program shows coal is losing its cost advantage, while renewable technologies are becoming increasingly competitive. The transition could create major opportunities for independent power producers, solar developers, battery suppliers, transmission companies and grid-technology providers.
Indonesia’s Electricity Supply Business Plan, known as RUPTL 2025–2034, already targets 69.5 GW of additional generation capacity. This includes 42.6 GW of renewable energy and 10.3 GW of energy storage.
Indonesia’s 100 GW solar and 320 GWh battery-storage roadmap would represent a significant acceleration beyond the 17.1 GW of solar currently included in the RUPTL.
Coal Generation Cost Rises 46 Percent
Indonesia’s coal-fired electricity generation cost increased 46 percent from IDR637 per kWh in 2020 to IDR930 per kWh in 2025, according to IEEFA. The average cost could reach approximately IDR1,060 per kWh in 2026.
Coal’s apparent cost competitiveness is also supported by Indonesia’s Domestic Price Obligation, which limits the price paid by power producers for domestic coal.
IEEFA estimates that coal-based generation without this regulated pricing mechanism would have cost approximately IDR1,455 per kWh in 2025. That is 56 percent higher than the reported cost of IDR930 per kWh with the pricing obligation.
By comparison, hydropower generation cost approximately IDR313 per kWh in 2025, while wind power averaged about IDR906 per kWh.
The figures strengthen the case for Indonesia to reassess new fossil-fuel investments based on their underlying economic costs rather than regulated fuel prices, IEEFA said in the report prepared by Mutya Yustika, Randi Bachtiar and Yusuf Kresna.
Solar Electricity Costs Less Than New Coal
Utility-scale solar photovoltaic power in Indonesia is estimated to cost between 5.6 US cents and 8.4 US cents per kWh. Coal-fired electricity costs between 10 US cents and 15.1 US cents per kWh, while gas generation ranges from 14 US cents to 21 US cents.
Onshore wind is estimated at between 6.8 US cents and 10.3 US cents per kWh.
At the lower end of their respective cost ranges, solar electricity is approximately 44 percent cheaper than coal. Onshore wind is about 32 percent cheaper.
Even the upper end of the estimated solar cost range remains below the lowest estimated cost for coal generation. This cost difference could increasingly influence Indonesia’s future generation mix, power-purchase agreements and private investment decisions.
Solar and Battery Storage Can Replace Expensive Diesel
Eastern Indonesia offers one of the strongest economic opportunities for solar-plus-battery energy storage systems.
Electricity systems in several eastern regions continue to depend on diesel generation costing approximately IDR5,500 to nearly IDR9,000 per kWh. These costs are substantially higher than those of grid-connected coal, solar or wind generation.
IEEFA estimates that solar-plus-storage could supply electricity for between US$0.08 and US$0.20 per kWh, compared with US$0.29 to US$0.65 per kWh for diesel generation.
Solar installations can meet daytime demand, while batteries can store electricity for use during evenings and other periods of low solar production. The combination could reduce fuel expenses and improve energy security in isolated systems where extending large transmission networks may be uneconomical.
The economics indicate that Indonesia should initially deploy solar and battery storage in locations where they can displace the most expensive diesel generation.
RUPTL Creates IDR 2,967 Trillion Investment Pipeline
Indonesia’s RUPTL 2025–2034 identifies approximately IDR2,967.4 trillion in electricity-sector investment opportunities. The program covers generation, transmission, distribution, village electrification, maintenance and smart-grid development.
Generation projects represent approximately IDR2,133.7 trillion of the total investment opportunity. Transmission development requires another IDR565.3 trillion.
The generation plan includes:
17.1 GW of solar power
11.7 GW of hydropower
7.2 GW of wind power
5.2 GW of geothermal capacity
10.3 GW of energy storage
Indonesia’s broader 100 GW solar ambition could substantially increase requirements for battery storage, substations, transmission networks and digital grid-management systems beyond the investments already included in the RUPTL.
Private Power Producers Get IDR 1,566 Trillion Opportunity
Independent power producers are expected to provide a large share of the capital needed for Indonesia’s electricity expansion.
The RUPTL identifies approximately IDR1,566.1 trillion of generation investment opportunities for private power producers. Renewable projects account for IDR1,341.8 trillion, or nearly 86 percent of this pipeline.
PLN’s planned generation investment is estimated at IDR567.6 trillion. Renewable energy represents approximately IDR340.6 trillion, while non-renewable generation accounts for around IDR227 trillion.
The success of the private investment pipeline will depend on competitive procurement, bankable power-purchase agreements, affordable financing, land availability, regulatory stability and timely grid connections.
Transmission Spending Needs to Reach US$2.4 Billion Annually
Indonesia will require almost 48,000 circuit kilometres of additional transmission infrastructure and approximately 108,000 MVA of new substation capacity under the current RUPTL.
IEEFA estimates that the plan requires average annual transmission investment of approximately US$2.4 billion. Actual investment has averaged only about US$1.4 billion annually since 2019, leaving an annual gap of around US$1 billion.
Insufficient transmission capacity could delay renewable projects or restrict electricity output even when solar and wind generation are commercially competitive. Grid development is therefore likely to become one of the most important constraints—and investment opportunities—within Indonesia’s energy transition.
Medco, Barito and Cikarang Expand Renewable Portfolios
Indonesian power companies have begun expanding their renewable-energy investments.
Medco Power Indonesia reported approximately 1,011 MW of independent power producer capacity in 2025. Its 35 MW first-phase Ijen geothermal project started commercial operations in February 2025, followed by the 25 MWp East Bali solar project in June.
Medco Power plans to expand Ijen toward 110 MW and is pursuing the approximately 2.5 GWp Bulan solar project. The development includes a proposed 600 MW electricity export component for Singapore.
Barito Renewables, through Star Energy Geothermal, has committed approximately US$365 million to five projects expected to add 112 MW of geothermal capacity at its Salak and Wayang Windu operations. A separate US$22.5 million Salak retrofit added 7.7 MW.
Cikarang Listrindo increased its solar capacity to approximately 45.7 MWp by the end of 2025 and planned another 24.3 MWp during 2026. The expansion could take its total solar portfolio to around 70 MWp.
Solar Target Depends on Storage and Grid Investment
Indonesia’s 100 GW solar ambition is more than a generation-capacity program. Converting that capacity into reliable electricity will require large-scale investment in batteries, transmission lines, substations, distribution networks and smart-grid technologies.
Indonesia’s latest renewable-energy expansion plan indicates that the main opportunity is defined by IDR2,967.4 trillion of planned electricity investment, 42.6 GW of renewable additions, 10.3 GW of storage, almost 48,000 circuit kilometres of transmission and 108,000 MVA of substation capacity.
With coal-generation costs increasing 46 percent between 2020 and 2025 — and solar electricity already cheaper than new coal — the economic case for redirecting investment toward renewable energy is strengthening.
Indonesia’s 5.3 GW of new solar projects shows that the country’s challenge is to align its solar goals with least-cost power planning, bankable private projects and faster grid development. The 100 GW solar program could reduce electricity costs while creating a major market for renewable generation, battery storage and power infrastructure.
SHAFANA FAZAL