Rooftop PV in Indonesia: A Niche Development Analysis

A qualitative study to analyze the niche development using Strategic Niche Management (SNM) with complementary insights from Multi-Level Perspective (MLP) and Business Model

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To achieve 23% renewable energy by 2025, 29% emission reduction by 2030, and net zero emission in 2060, Indonesia needs to accelerate the transition to renewable energy such as solar energy. Despite the abundant solar energy potential, the contribution of solar PV has only reached 0.05% of the energy mix in 2021 (MEMR, 2021). The development of solar PV face challenges such as land availability, land acquisition, geographical problem, and timely permits (Patil et al., 2017). A niche rooftop PV serves as an alternative to solve these problems. This study focuses on rooftop PV niche development in the sustainability transition of Indonesia. 
The sustainability transition is a complex process due to the involvement of various stakeholders (Geels et al., 2017). Moreover, Indonesia's high dependency on fossil fuels adds complexity to the transition. Therefore, it is necessary to study the development of rooftop PV in Indonesia to investigate factors influencing the niche development, address the sociotechnical aspect, and identify barriers and opportunities for broader diffusion. This research uses qualitative analysis by adopting Strategic niche management (SNM) with complementary insights from the Multi-Level Perspective (MLP) and business model. A case study was selected to gain a clearer understanding of different rooftop PV business models in three provinces (Jakarta, Banten and West Java). The data collection was conducted using interviews with 15 respondents from various groups and desk research. The study aims to answer the question, “How has the rooftop PV niche developed in Indonesia, and to what extent do business models influence niche development?”
The results show that rooftop PV was initially developed in the 1990s through a solar home system innovation in Sukatani village. Landscape factors influencing niche development are low electrification in rural areas, the Asian financial crisis, energy security, climate change, covid-19, and international market pressure. At the regime level, factors include development plan (e.g., Repelita), regulation (e.g., net-metering), and dominant stakeholder PLN (e.g., permit approval) founded influencing the niche development. Another factor, such as the learning process (e.g., demonstration project, survey, and knowledge transfer), provided learning to the technical, policy development, and public awareness. The result shows niche development of rooftop PV faces financial, institutional, policy, technical and awareness barriers. Niche actors have implemented business models to overcome the barriers. The host-owned business model is developed to provide access for the consumer to be prosumers who can benefit from the feed-in tariffs. The third-party business model enables users to overcome the high-upfront cost barriers. Meanwhile, the cooperative business model operated by KUD emerged using grants in the early 1990s to facilitate the coordination of the increased participation of international donors, banks, suppliers and villagers. However, the role of the cooperative business models has decreased due to the economic crisis and the decline in the use of rooftop PV in rural areas.
Lastly, this study shows the importance of shielding strategies in supporting Indonesia’s rooftop PV niche development. Therefore, this thesis recommends that the government should consider and systematically use the shielding concept in formulating regulations on energy transition.