Indonesia Renewable Energy Market Size & Share Analysis - Emerging Trends, Growth Opportunities, Competitive Landscape, and Forecasts (2026 - 2032)

Indonesia Renewable Energy Market Emerging Trends

Government Policies and International Partnerships Drive Market

• The Indonesian government has implemented comprehensive policy reforms to attract investment in renewable energy development.
• The government's updated Electricity Supply Business Plan 2025–2034 targets an addition of 69.5 GW of new power capacity by 2034.
• Of this, 42.6 GW is to be from renewable energy sources, whereas 10.3 GW will be from batteries and pumped hydro.
• In September 2024, the Ministry of Energy and Mineral Resources relaxed local content requirements (LCR) for electricity infrastructure development, reducing solar plant requirements from approximately 40% to 20%.
• This policy change aims to attract concessional funding from international development banks and lower project costs.
• The Asian Development Bank has approved USD 500 million in loans to PLN, Indonesia's state electricity company, to support the development of 1,200 MW of solar capacity by 2025 and 3,000 MW by 2030.
• The JETP agreement, signed at the G20 Summit in Bali in November 2022, represents the largest energy transition financing package in the world.
• Under this partnership, Indonesia committed to limiting power sector emissions to 250 million metric tons of carbon dioxide by 2030 and achieving 34% renewable energy generation share by 2030.
• The U.S. Department of the Treasury confirmed that 54 projects have already secured USD 1.1 billion in commitments as of early 2025, including nine projects receiving loans or equity investments and 45 projects awarded grants totaling USD 233 million.

Rising Industrial Electricity Demand and Economic Growth Create Opportunities

• Recovering from the 1997 financial crisis, Indonesia's GDP grew by 4.9% annually from 2000 to 2021, and in 2021, GDP increased by 3.7% from 2020, rebounding to levels above those seen before the pandemic.
• AS per the OECD, since 2000, Indonesia's GDP has more than doubled, while total energy supply has risen by approximately one-and-a-half times, from around 6,500 Petajoules (PJ) in 2000 to nearly 10,400 PJ in 2021.
• This relative decoupling of GDP from energy demand indicates significant advancements in the energy intensity of the economy, primarily driven by two factors.
• The proportion of electricity in total final consumption grew from a low level in 2010 to approximately 15% in 2021.
• During this time, electricity usage in the industrial sector has doubled, and it has nearly doubled in the buildings sector, particularly due to the increasing demand for space cooling.
• Throughout the 2000–2021 period, Indonesia's CO² emissions from the energy sector rose by slightly more than two times, while GDP increased by just over two-and-a-half times.
• Consequently, the rise in CO2 emissions has been relatively closely linked to GDP growth.
• In 2021, the power sector accounted for about 40% of total CO₂ emissions, while transportation and industry each represented around one-quarter of total emissions.
• Indonesia's electricity demand is projected to grow between 4.8% and 5.2% annually, increasing from approximately 363–377 TWh in 2023 to 1,846–2,152 TWh by 2060.
• Indonesia will become the world's fourth-largest economy by 2050, driving substantial demand growth across residential, commercial, and industrial sectors.
• The development of industrial parks and nickel smelters in Sulawesi and Kalimantan presents significant opportunities for captive renewable energy installations.

Indonesia Renewable Energy Market Segmentation Analysis

Source Analysis

Hydropower holds the largest share, of 35%, in the Indonesian renewable energy market in 2025, generating the highest portion of renewable electricity output. The country's total hydropower capacity reached 7 GW in 2024, with Indonesia adding 486 MW of new capacity during the year. According to the International Hydropower Association, Indonesia has committed to expanding hydropower capacity from 6.7 GW to 72 GW by 2070.

Major projects scheduled to commence operations include the Upper Cisokan Pumped Storage Power Plant (1,040 MW), Indonesia's first pumped storage facility located in West Java, and the Batang Toru Hydropower Plant (510 MW) in North Sumatra.

Solar energy is projected to be the fastest-growing category, through 2032, driven by the declining technology costs, favorable government policies, and abundant solar irradiance across the archipelago. Indonesia's location on the equator provides high-intensity solar radiation with an estimated potential capacity of 207,898 MW. The 145 MW Cirata floating solar facility in West Java, operational since November 2023, is Southeast Asia's largest floating solar project.

The Ministry of Energy and Mineral Resources targets 18 GW of solar capacity by 2035, with PLN planning to add 7.9 GW of new solar capacity by 2033. The cost of solar modules in Indonesia dropped from USD 4.12 per Watt in 2008 to USD 0.17 per Watt in 2020, representing a 96% reduction over twelve years.

These sources are covered:

• Solar Energy (Fastest-Growing Category)
  • Solar PV
  • Concentrated Solar Power (CSP)
• Wind Energy
  • Onshore
  • Offshore
• Hydropower (Largest Category)
• Bioenergy
• Geothermal Energy
• Others

Application Analysis

The utilities category dominates the Indonesian renewable energy market in 2025 with 45% share. PT PLN (Persero) operates the majority of grid-connected renewable energy facilities and serves as the primary off-taker for independent power producers. As per projections, 73% of new generation capacity will be developed through private partnerships, with PLN focusing on transmission and grid infrastructure development. Utility-scale projects, including the Cirata floating solar plant (145 MW), geothermal facilities across Java and Sumatra, and planned hydropower developments, drive solar capacity additions.

The industrial category is projected to witness the highest CAGR during 2026–2032, driven by captive renewable energy installations at manufacturing facilities, mining operations, and industrial parks. The expansion of nickel smelters and industrial zones in Sulawesi creates substantial opportunities for captive renewable energy development. The government's strategy to develop green industries in Kalimantan by utilizing hydropower includes the Kayan Hydroelectric Power Plant (9,000 MW) and Mentarang plant (1,375 MW) to supply electricity to manufacturing facilities. Industrial demand growth is further supported by decarbonization commitments from multinational corporations operating in Indonesia.

These applications are covered:

• Residential
• Commercial
• Industrial (Fastest-Growing Category)
• Utilities (Largest Category)

Indonesia Renewable Energy Market Geographical Analysis

Java Renewable Energy Market Value

Java holds the largest share, of 40%, in the Indonesian renewable energy market in 2025, driven by high electricity demand, concentration of industrial activity, and availability of geothermal resources. The Java–Madura–Bali (JAMALI) grid serves 80% of Indonesia's electricity demand, with the region hosting the majority of the country's population and economic activity. Almost half (48.2%) of new capacity under the RUPTL 2025-2034 is earmarked for the Java–Madura–Bali region.

Major renewable energy installations in Java include the Cirata floating solar plant (145 MW) in West Java, the Upper Cisokan pumped storage facility (1,040 MW), and geothermal plants including Salak (377 MW), Wayang Windu (227 MW), and Kamojang (235 MW). West Java hosts the highest concentration of geothermal capacity in Indonesia, leveraging volcanic activity along the Ring of Fire. The region's manufacturing sector and urban population centers create substantial demand for renewable electricity, supporting market expansion through both utility-scale and distributed generation projects.

Sulawesi Renewable Energy Market Forecast

Sulawesi is projected to be the fastest-growing regional market with a CAGR exceeding 11.5% during 2026–2032, driven by industrial development, nickel processing facilities, and favorable wind resources. The region currently accounts for 20% of Indonesia's installed renewable energy capacity at 2.5 GW. North Sulawesi gets a major chunk of its electricity from geothermal sources.

Sulawesi hosts Indonesia's only operational utility-scale wind farms: the Sidrap Wind Farm (75 MW) and Tolo Wind Farm (72 MW), both located in South Sulawesi. The region possesses 4.2 GW of wind potential, with favorable wind speeds making it the most suitable location for wind energy development in the country. The expansion of industrial parks and nickel smelters creates substantial captive market opportunities for renewable energy developers. The RUPTL 2025–2034 allocates 14.9% of new generation capacity to Sulawesi, with the Sulawesi Backbone transmission interconnection planned to improve grid reliability and enable renewable energy integration.

These regions are covered:

• Java (Largest Regional Market)
• Sumatra
• Sulawesi (Fastest-Growing Regional Market)
• Kalimantan
• Rest of Indonesia

Indonesia Renewable Energy Market Share

The Indonesian renewable energy generation systems market exhibits a fragmented competitive structure, with international equipment manufacturers competing alongside local EPC contractors and system integrators. The market encompasses multiple product categories, each dominated by different sets of suppliers. International manufacturers hold dominant positions in core equipment supply, while local companies provide EPC services, installation, and after-sales support. The relaxation of local content requirements in 2024 has enabled greater participation by foreign suppliers in direct equipment sales.

In the solar segment, Chinese manufacturers supply the majority of PV modules through partnerships with local distributors and EPC contractors. Local EPC contractors provide turnkey installation services, competing on project execution capabilities and local market knowledge.

Wind turbine supply is concentrated among global manufacturers, while hydropower turbine procurement is dominated by European manufacturers. Geothermal equipment supply involves specialized manufacturers, reflecting the technical complexity of steam turbine and binary cycle systems.

Indonesia Renewable Energy Market News

• In January 2025, President Prabowo Subianto inaugurated 37 strategic electricity projects, including PLTA Asahan 3 and Jatigede hydropower facilities, worth IDR 72 trillion in investment and 3.2 GW in capacity.
• In November 2024, President Prabowo announced plans to retire all coal and fossil-fuel power plants within 15 years and significantly boost renewable energy capacity by over 75 GW.
• In September 2024, the Ministry of Energy and Mineral Resources relaxed local content requirements for solar power plants from 40% to 20%, to attract foreign investment and accelerate renewable energy deployment.
• In September 2024, Singapore announced plans to import 1.4 GW more of low-carbon power from Indonesia.
• In August 2024, Barito Renewables announced a partnership with ACEN to accelerate the development of renewable wind energy projects throughout Indonesia through PT Barito Wind Energy and ACEN Indonesia Investment Holdings.
• In July 2024, PT Sewatama Jasa Mandiri partnered with Daewoo Engineering to expand solar capacity at the Pertamina refinery in Balongan, West Java, from 3.5 MW to 6.5 MW.
• In July 2024, Sungrow announced that its inverter solutions were selected for the 15-MW Tanjung Batu floating solar project in Gorontalo, Indonesia.