The Assessment of Off-Grid Photovoltaic (PV) Systems for Rural Electrification in Indonesia

Abstract

There are many rural areas in Indonesia without electricity, especially in remote islands which are challenging to access. The limited access to electricity inhibits people in rural areas to increase their welfare and quality of life. Identifying the urge for electricity access in remote areas and for increasing the utilization of renewable energy resources in Indonesia, the off-grid photovoltaic (PV) systems can be the solution. The paper aims to assess the off-grid PV systems for rural electrification in Indonesia. The Levelized cost of energy (LCOE) is conducted to assess the cost-effectiveness of the off-grid PV systems compared to other rural electrification solutions in Indonesia, such as diesel and micro-hydro. It results that LCOE of the PV battery has the highest LCOE with 0.30 US$/kWh. Another off-grid PV configuration: PV battery diesel (hybrid system) has LCOE ranging from 0.19 to 0.22 US$/kWh. This hybrid system can compete with the LCOE of diesel generator (0.17 – 0.24 US$/kWh). The range of LCOE reflects the variation of retail diesel prices in remote areas. The micro-hydro power plant has the lowest LCOE, 0.16 US$/kWh. However, this solution is only reliable in the areas that have stable water flow rate with different elevation. In this case, the off-grid PV systems are more reliable to generate electricity in remote areas because the average daily solar irradiation is 4.8 kWh/m2/day across Indonesia. Additionally, the trend of cost reduction in PV systems and the improvement in PV technologies can be game-changing that make off-grid PV systems more competitive compared to other solutions. Then, the paper analyses the fundamental issues regarding the off-grid PV systems application and it also recommends the policies that can be taken by the Government of Indonesia and the local government to provide sustainable rural electrification based on the off-grid PV systems.