AESI: PLN’s Giga One Tender Brings 1,225 MW of Solar Capacity to Market

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Ecobiz.asia – Indonesia’s utility-scale solar market is beginning to see larger procurement volumes, with 1,225 MW of solar capacity being offered through PLN’s Giga One tender under the PLTS Mentari Nusantara I program in 2026.

A further 504 MWp of solar capacity is expected to be required for the government’s rural electrification program across 9,786 locations between 2026 and 2029, creating another potential market for solar developers, engineering, procurement and construction (EPC) contractors, and equipment suppliers.

Mada Ayu Habsari, Chair of the Indonesian Solar Energy Association (AESI), presented the figures during Indonesia Sustainable Energy Week (ISEW) 2026 in Jakarta on Wednesday (August 19, 2026)

The procurement volumes are beginning to translate Indonesia’s longer-term solar ambitions into a project pipeline. Under the 2025–2034 Electricity Supply Business Plan (RUPTL), Indonesia has allocated 17.1 GW of solar capacity.

However, AESI warned that the pace of project development could be constrained by regulatory uncertainty, financing challenges and project risk allocation.

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One of the association’s main concerns is the implementation of local-content requirements (TKDN) for solar projects. AESI said project-level and product-level requirements have been interpreted differently, creating uncertainty for investors over which requirements apply and at what stage of development.

The issue has become more significant following the expiration of a relaxation under Energy and Mineral Resources Minister Regulation No. 11/2024, which was linked to projects achieving commercial operation by June 30, 2026. Other regulations remain in effect, including Industry Minister Regulation No. 34/2024 on the calculation of module local content and Energy and Mineral Resources Minister Decree No. 191/2024, which refers to a minimum combined local-content requirement of 20% for goods and services at the project level.

AESI said the final figures related to local-content requirements were still under review.

Beyond regulation, the association said project financing remains a key challenge. Curtailment, delays, foreign-exchange exposure and offtake risks are still largely borne by project companies, potentially increasing the cost of capital and reducing the number of projects considered bankable by lenders.

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Project economics are also affected by tariff and indexation limitations, while the number of creditworthy buyers remains limited. Demand from commercial and industrial users is growing, but AESI described the market as fragmented and relatively small in scale.

Grid availability presents another constraint. Some areas with strong solar resources do not have sufficient grid connection capacity, while limited system flexibility can increase curtailment risks on weaker grids. Battery storage and hybrid configurations are being assessed on a project-by-project basis.

The challenges are particularly different for the government’s LISDES rural electrification program, where solar deployment will be distributed across thousands of locations, particularly in eastern Indonesia. AESI identified logistics, mobilisation costs, availability of certified technicians, local EPC capacity, spare parts and long-term operation and maintenance as potential cost factors.

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AESI said accelerating solar deployment would require clearer regulations, more balanced risk allocation and stronger project preparation. The association also called for consistent interpretation of local-content requirements across ministries, predictable rules from power purchase agreement signing through commercial operation, bankable feasibility studies and resource data, as well as greater availability of qualified local EPC contractors and certified technicians.

AESI expects solar deployment between 2027 and 2030 to require simultaneous expansion of manufacturing capacity, grid infrastructure and the skilled workforce.

The association has set a longer-term vision for Indonesia to reach 100 GW of solar capacity, which it estimates could support around 760,000 green jobs.

For the near term, however, AESI said the key challenge is converting the solar projects already identified through procurement and planning into financially viable projects that can reach construction and commercial operation. ***

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