As of 2025, renewables account for only about 15.75% of Indonesia’s total installed power capacity, with hydropower, geothermal, and bioenergy dominating the renewable mix.
Indonesia, Southeast Asia’s largest economy, is in the early but strategically important phase of its renewable energy transition. While fossil fuels such as coal continue to dominate the electricity system, solar and wind energy are slowly expanding and gaining policy attention as part of the country’s commitment to reach net-zero emissions by 2060 or sooner.
As of 2025, renewables account for only about 15.75% of Indonesia’s total installed power capacity, with hydropower, geothermal, and bioenergy dominating the renewable mix. Solar and wind remain relatively small but are among the fastest-growing segments, signaling a gradual shift in the national energy structure.
Current production and consumption of solar and wind energy
Indonesia’s solar and wind energy capacity remains modest but expanding:
Solar energy has recently crossed the 1 GW milestone for the first time, driven largely by rooftop and commercial & industrial (C&I) installations, rather than utility-scale projects. In 2025 alone, Indonesia added around 546 MW of new solar capacity, reflecting accelerating private-sector adoption.
Wind energy, by contrast, remains in an early stage of development, with only a few operational wind farms concentrated in South Sulawesi and other high-wind regions.
Electricity from solar and wind is primarily consumed domestically and fed into the national grid operated by PLN (Perusahaan Listrik Negara), with limited penetration into industrial-scale direct supply systems.
Trend lines: past, present, and future outlook
Past (2015–2023)
- Renewable energy growth dominated by hydropower and geothermal
- Solar and wind remained marginal due to high costs, policy uncertainty, and grid constraints
- Slow expansion of rooftop solar due to net-metering limitations
Present (2024–2026)
- Solar capacity growth accelerating (especially rooftop/C&I segment)
- Wind remains stagnant, but is politically acknowledged in energy planning
- Renewable share of electricity mix increased by only ~1.1 percentage points in 2025, reaching 15.75%
- Strong dependence on coal persists, limiting structural change
Future projections (2026–2030 and beyond)
Government targets indicate:
- Renewable capacity expansion to ~16.6 GW by 2026 (up from 15.6 GW in 2025)
- Expansion of solar as a priority technology (including floating solar and utility-scale PV)
- Wind power remains a smaller but stable contributor (~150 MW scale currently, with modest planned expansion)
Indonesia’s long-term transition is expected to accelerate through:
- Just Energy Transition Partnership (JETP) financing
- Grid modernization
- Large-scale solar + storage deployment
Barriers to scaling solar and wind energy
Despite growing momentum in Indonesia’s renewable energy sector, several structural barriers continue to slow the large-scale deployment of solar and wind power. The most significant constraint is the country’s continued reliance on coal, which still dominates electricity generation and creates strong path dependency within the energy system. This long-standing dependence has shaped infrastructure planning, investment decisions, and policy priorities in ways that favor fossil fuels over renewables. At the same time, Indonesia’s fragmented geography across thousands of islands limits the effectiveness of its transmission network, making it difficult to integrate variable renewable sources like solar and wind into the national grid. Grid flexibility remains limited, and weak inter-island transmission infrastructure further constrains large-scale balancing of renewable energy.
Policy and market-related challenges also play a major role. Frequent changes to renewable energy procurement rules, combined with unclear tariff structures and slow approval processes by the state utility, PLN, have created uncertainty for investors and developers. The removal of net metering has slowed rooftop solar adoption, especially among households and small businesses, while utility-scale solar projects continue to face administrative delays. In addition, high perceived investment risk and insufficient financial guarantees have limited international capital inflows into the sector. Addressing these barriers will require streamlined PLN procurement systems, reinstated and stable incentives for rooftop solar, more transparent renewable energy auctions, and stronger investment in energy storage and inter-island grid interconnections to improve system flexibility and reliability.
Export of solar and wind energy
Indonesia currently does not export solar or wind electricity to other countries due to:
- Limited installed capacity
- Lack of cross-border electricity interconnections for renewables
- Domestic demand priority and island-based grid structure
However, Indonesia is increasingly positioned as a potential exporter of green hydrogen and renewable-based industrial products to regional markets such as Singapore and Japan if large-scale solar and wind deployment expands.
Main uses of solar and wind energy
At present, solar and wind energy in Indonesia are mainly used for:
- Residential rooftop electricity (limited but growing)
- Commercial and industrial decarbonization (key driver of solar growth)
- Grid-connected electricity generation via PLN
- Remote/off-grid electrification in eastern Indonesia (small-scale solar systems)
Wind energy is primarily used for utility-scale grid electricity generation, but its overall contribution remains small.
Balance between renewables and fossil fuels
Indonesia’s electricity system remains heavily fossil-fuel dependent:
- Fossil fuels (coal, gas, oil): ~80%+ of electricity generation
- Renewables: ~15.75% of installed capacity (lower in actual generation share)
Key observations:
- Coal remains the dominant baseload energy source
- Renewables are growing, but still structurally secondary
- Solar is the fastest-growing renewable segment, while wind remains marginal
- Indonesia’s transition is currently capacity-driven but not yet generation-transforming
Indonesia’s solar and wind energy sector is still in an early stage of development, but 2025 marks an important turning point, as solar PV has surpassed 1 GW of installed capacity for the first time. However, the energy transition remains constrained by coal dependence, regulatory challenges, and infrastructure limitations, which could slow progress toward national renewable energy targets. A faster transition will depend on stronger solar deployment policies, expanded wind development in coastal and island regions, grid modernization, storage investment, and more stable regulatory frameworks that can attract long-term capital. With improved policy alignment and international financing support, Indonesia has the potential to scale solar and wind from marginal roles into core pillars of its future energy system.
This post was submitted by Indonesia Country Manager, Netra Naik.