While other Southeast Asian countries grapple with the effects of new U.S. trade restrictions, Jakarta is welcoming Chinese solar investments and pushing fast-tracked reforms to become the region's next solar powerhouse.
In an exclusive interview with China Global Television Network (CGTN), Putra Adhiguna, managing director of Energy Shift Institute, praised the move, noting that Chinese investment can accelerate Indonesia's solar transition. However, he emphasized that the country must also build its own capacity to develop solar energy independently in the future.
"China is a natural partner for solar production because they're the leader in technology, capital deployment, and everything else, which means that (for) Indonesia, as a big country in Southeast Asia, the natural partner is actually China. So it's a step in the right direction because if Indonesia is going to grow a lot of renewables, it needs domestic solar panels. It cannot only rely on solar panels imported from China alone," he said.
Over the past 18 months, at least four solar projects linked to Chinese companies have begun operations in Indonesia.
The Indonesian government says it is now focused on creating a business-friendly environment to accelerate the country's transition to clean energy.
As part of these efforts, the government has reduced the local material requirement from 40 percent to just 20 percent, opening the door for more foreign investment.
"We have a commitment that we will increase the percentage of new and renewable energy to support Indonesia's economic growth up to 70 percent. So, we translate it into different (multiple) strategies. One of the strategies is to invite investment. Why this is important? Because Indonesia realizes that Indonesia doesn't have the capacity yet to develop its own renewable energy," said Leonardo Adypurnama, deputy for food, natural resources, and environment at Indonesia's Ministry of National Development Planning.
Adypurnama said Chinese investment remains a crucial step in upgrading Indonesia's solar industry.
Until now, Indonesia's solar market has primarily relied on assembly facilities that use imported parts. This investment aims to change that by establishing factories capable of locally manufacturing and supplying solar panels.
However, the real challenge will be whether Indonesia can stimulate local demand while avoiding entanglement in the ongoing global trade battle.
Chinese investments poised to transform Indonesia's solar industry
