Indonesia’s Solar Push Gains Momentum As China Steps In To Fuel Renewable Energy Expansion

Indonesia is moving forward with major solar energy ambitions as it works to shift away from fossil fuels and expand renewable electricity generation. In late 2023, the country inaugurated its first floating solar power plant at the Cirata reservoir in West Java. The launch was presided over by then-President Joko Widodo, who highlighted its significance as the largest floating solar facility in Southeast Asia. The plant currently has a capacity of 192 megawatts and could eventually expand to 500 megawatts, enough to supply electricity to more than 100,000 households. Built using over 300,000 solar panels sourced from China and covering 250 hectares of reservoir surface, the project has become a symbol of Indonesia’s push toward solar energy.

Despite the promise, Indonesia’s solar sector is still in the early stages of development. The country has long depended heavily on fossil fuels such as coal and natural gas. Limited policy support and regulatory barriers have often discouraged Western investment. However, the situation has opened the door for Chinese solar companies, which are searching for new overseas markets due to slowing demand and shrinking profits in China’s domestic solar industry. Intensifying competition and falling prices at home have made expansion abroad increasingly important for Chinese manufacturers.

Indonesia has set ambitious climate goals. The government aims to peak greenhouse gas emissions by 2030 and achieve net zero emissions by 2060. To meet these targets, it plans to install 75 gigawatts of renewable energy capacity by 2040 and phase out its coal power plants by 2050. Currently, Indonesia only has around 1 gigawatt of solar power capacity installed, but analysts see strong potential for fast growth. Research from the Center for Research on Energy and Clean Air suggests there are more than 16.5 gigawatts of planned solar projects already identified. This is far greater than initial plans under the Just Energy Transition Partnership, which promised Indonesia more than $20 billion in support. Only a small part of that funding has been delivered, and the withdrawal of the United States has left financial gaps that could delay progress.

Chinese firms are stepping in to support Indonesia’s energy transition. In August, President Prabowo Subianto announced a plan to install 100 gigawatts of solar capacity for rural electrification, which could become the biggest project of its kind in Southeast Asia. Analysts believe China can supply low-cost equipment critical for remote regions, where affordable hardware combined with battery storage can provide reliable power access. China is already Indonesia’s largest foreign investor, and partnerships are expanding. Trina Solar is investing $100 million to build module and cell manufacturing facilities in Central Java. LONGi has launched a solar panel factory near Jakarta with a planned annual capacity of 1.4 gigawatts.

China’s solar exports to Indonesia have surged, rising from 2 percent to 15 percent of export share within one year. Overproduction and price drops in China have driven this expansion. Many Chinese solar companies are experiencing financial losses and are turning overseas to stabilize operations. Industry experts say Indonesia offers major opportunities, especially for supplying solar power to energy-intensive industrial parks where Chinese firms already operate.

Indonesia wants to build its own manufacturing base and reduce dependence on imports. Experts argue that greater transparency in procurement and land permitting is needed to attract large-scale investment. Trade pressure from US tariffs also complicates development, but analysts expect Chinese participation in Indonesia’s clean energy projects to continue due to strong bilateral ties and market potential. Indonesia’s solar journey is still in its early stages, but momentum is growing rapidly, driven by necessity and opportunity.