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Solar Cell Manufacturing Cost Analysis and its Impact to Solar Power Electricity Price in Indonesia

Author

Listed:
  • Erwan Hermawan

    (Research Center for Process and Manufacturing Industry Technology, National Research and Innovation Agency (BRIN), PUSPIPTEK Gd. 625, Tangerang Selatan, Indonesia,)

  • Raden Agung Wijono

    (Research Center for Process and Manufacturing Industry Technology, National Research and Innovation Agency (BRIN), PUSPIPTEK Gd. 625, Tangerang Selatan, Indonesia,)

  • Adiarso Adiarso

    (Research Center for Process and Manufacturing Industry Technology, National Research and Innovation Agency (BRIN), PUSPIPTEK Gd. 625, Tangerang Selatan, Indonesia,)

  • Ermawan Darma Setiyadi

    (Research Center for Process and Manufacturing Industry Technology, National Research and Innovation Agency (BRIN), PUSPIPTEK Gd. 625, Tangerang Selatan, Indonesia,)

  • Nur Anis Hadiyati

    (Directorate Research, Technology, and Policy Formulation, National Research and Innovation Agency (BRIN), Jl. M.H Thamrin, Jakarta, Indonesia.)

  • Sigit Setiadi

    (Research Center for Process and Manufacturing Industry Technology, National Research and Innovation Agency (BRIN), PUSPIPTEK Gd. 625, Tangerang Selatan, Indonesia,)

  • Hari Setiawan

    (Research Center for Process and Manufacturing Industry Technology, National Research and Innovation Agency (BRIN), PUSPIPTEK Gd. 625, Tangerang Selatan, Indonesia,)

  • Ayu Lydi Ferabianie

    (Research Center for Process and Manufacturing Industry Technology, National Research and Innovation Agency (BRIN), PUSPIPTEK Gd. 625, Tangerang Selatan, Indonesia,)

  • Yanti Rayana Dewi

    (Research Center for Process and Manufacturing Industry Technology, National Research and Innovation Agency (BRIN), PUSPIPTEK Gd. 625, Tangerang Selatan, Indonesia,)

  • Ontin Fatmakartika

    (Directorate Research, Technology, and Policy Formulation, National Research and Innovation Agency (BRIN), Jl. M.H Thamrin, Jakarta, Indonesia.)

Abstract

World energy consumption continues to increase, with a growth of 1,3% annually during 2011 - 2021. To deal with that situation, in 2021, Indonesia Electrity Stated-Own Company (PLN) issued a report about the electricity supply business plan (RUPTL) 2021-2030. The power plant projected to grow is solar photovoltaic (PV), reaching 4,6 GW within ten years. However, in reality, the achievement of developing solar power plants is still 0,02 GW. Several factors that caused low realization are the solar power plant component industry needs to be better developed, and the regulated electricity price based on Presidential Decree 112/2022 needs to be increased. This study aims to determine the cost structure of solar module manufacturing and the impact on electricity prices. The calculation method used is financial modeling with economic parameters such as Internal Rate of Return (IRR), payback period, and Net Present Value (NPV) as parameters for project feasibility. The results of this study show that the economic price of solar power plants in Indonesia is USD 0,149/kWh. Meanwhile, based on a sensitivity analysis using electricity prices based on Presidential Decree, reducing solar module costs up to 50% still does not make the project feasible.

Suggested Citation

  • Erwan Hermawan & Raden Agung Wijono & Adiarso Adiarso & Ermawan Darma Setiyadi & Nur Anis Hadiyati & Sigit Setiadi & Hari Setiawan & Ayu Lydi Ferabianie & Yanti Rayana Dewi & Ontin Fatmakartika, 2023. "Solar Cell Manufacturing Cost Analysis and its Impact to Solar Power Electricity Price in Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 13(6), pages 244-258, November.
    • Handle: RePEc:eco:journ2:2023-06-27
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    More about this item

    Keywords

    Solar Cell; Solar Module; Solar Power Plant; Economics; Policy;
    All these keywords.

    JEL classification:

    • G0 - Financial Economics - - General
    • G3 - Financial Economics - - Corporate Finance and Governance

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