The price for solar energy has jumped to the highest level in two years as a result of a push by the Indonesian government to boost renewable energy development.
In July, the Indonesian Electricity Regulatory Commission launched a pilot project to bring the country’s solar capacity to 1GW by 2020.
The government said the project would help bring down electricity prices and boost employment.
However, the project has been met with widespread criticism, with critics saying the government should have done more to attract investment.
The new power, which was initially planned to cost US$20 per megawatt hour, has risen to US$24.50 per megowatt hour.
“It’s like a shock,” said Mark Karpinski, the head of policy at the Institute of Solar Energy and Power in Sydney.
“People have had their jobs, and are not able to afford the new prices.”
Mr Karpinksi said the government’s move to boost solar power was a “good move” but the government had also failed to ensure it was working on policies that would help drive down the price of electricity.
The pilot project has also faced delays and the regulator has since scrapped it.
“I think the market is getting out of control, and there’s no guarantee of its going to stay that way,” he said.
“If the price continues to go up, it’s going to cause real damage to the energy market.”
Indonesia’s solar power boom has been boosted by a policy that allowed the government to set a cap on power production.
The cap is set at 100MW and will be reset every six months, and solar panels can only produce up to about 40MW a year.
The country is currently on track to meet the cap.
The solar panel cap will be lowered gradually over the next few years, with the cap set to be reached by 2022.
However the regulator, the Solar Energy Industries Association, said the cap would only be lowered to 25MW, meaning that it was not a “natural” cap.
“There are many different factors involved,” said Mr Karsinski.
“The cap should be gradually lowered so that the cost of power is not skyrocketing.”
A new generation of renewable energy is on the horizon Indonesia is one of the world’s largest solar power producers, and the country is set to grow to 5GW by 2030.
The sector accounts for one-third of the countrys solar capacity, and a recent report by the government said Indonesia would be able to achieve 5GW of solar by 2030, and 3.5GW by 2035.
The project, called Indonesia’s Solar Power Project, was set up by the then-minister for energy, Joko Widodo.
The plan was to build solar power plants that would generate enough electricity to power 300,000 homes.
But the project was repeatedly delayed, and many projects have been scaled back.
The regulator said in June that it had scrapped a planned pilot project due to “inadequate financing”.
In January, the regulator announced it would scale back the pilot project.
“In light of the recent decisions by the state to scale back this project, the solar project has to be cancelled and the solar energy production must be significantly reduced,” it said in a statement.
“As a result, the electricity will not be exported to the market as originally planned, and is now subject to the state’s renewable energy policy.”
It is not clear whether the regulator will proceed with the pilot.
“We are monitoring the situation,” Mr Krasinski said.
The energy regulator said the pilot was a good step forward in bringing the country to the solar industry.
“But it needs to be a long-term project, with an appropriate and timely policy,” Mr Koski said.
He said it was important for the regulator to do more to encourage investment.
“This is a great opportunity for the solar sector to be developed.
It’s a huge opportunity,” he added.
“What they need is investment in the energy infrastructure, not just in the pilot but in other projects like the wind farm or solar farm.”
Solar panel prices are still higher than electricity bills in many parts of Asia.
In Malaysia, a new government program to support solar power production has seen solar prices rise to more than US$40 per kilowatt-hour, compared with US$18 per kilawatt-hours in Indonesia.