2021 International Conference on Technology and Policy in Energy and Electric Power (ICT-PEP)
Solar Levelized Cost of Energy Projection in
Indonesia
2021 International Conference on Technology and Policy in Energy and Electric Power (ICT-PEP) | 978-1-6654-1641-2/21/$31.00 ©2021 IEEE | DOI: 10.1109/ICT-PEP53949.2021.9600937
Zainal Arifin
Engineering and Technology Division Engineering and Technology Division
PT. PLN (Persero)
Jakarta, Indonesia
e-mail: zainal_pln@yahoo.com e-mail: aguspkl@gmail.com
Electrical Engineering Department
Universiti Teknologi Malaya
Abstract— Solar Levelized Cost of Energy is influenced by a
multitude of factors such as investment costs for material and
product, operational and maintenance costs, solar cell lifetime,
degradation, as well as installation region. This study aims to
clarify the current vague details of Solar LCOE in Indonesia.
Moreover, projection of Solar LCOE in Indonesia is calculated
from 2020 to 2050, covering aspects such as cost, system
configuration with and without batteries, location, and
effectiveness of different panel types. Based on NREL and
SunPower LCOE formulas as well as data from recent market
data and onsite survey. Models of On-Grid Silicon-based Solar
Panel System without batteries (Model A) and with battery
capacities (1x, 1.5x) of PV module as well as an identical Off-
Grid system (Model B) with battery capacities (2.5x, 3x) of PV
module are described. The study shows that the LCOE of Model
A with 10% discount rate in 2020 will reach grid parity at year
2050 with a predicted rate of IDR 547/kWh, meanwhile until the
year 2030, LCOE of Model B with a discount rate of 10% will
not reach grid parity. Overall, it can be concluded that an off-
grid system will still be too expensive for the commercial
market, while the on-grid system with a discount rate of 10%
will be viable to use by 2020. The results of the implementation
of this scheme show increasing of the total cost efficiency of
electricity supply in the Java Madura Bali system.
Keywords—LCOE, solar panel, silicon, photovoltaic system,
grid parity, solar LCOE
I. INTRODUCTION
The price of solar panel systems has decreased at an
exponential rate in recent years and will continue to decline in
the decades to come. There are a few countries with solar
energy LCOE lower than the national average electricity cost
and vice versa. LCOE is obtained by dividing the total cost of
running a solar panel system throughout its entire life cycle
divided by the energy it outputs within the same period. It is
imperative for Indonesia to identify whether its current Solar
LCOE is lower than the electricity tariff, and if not then when
will this be achieved. In this study, Solar LCOE is calculated
with regards to multiple capacities of battery, and multiple
inverters based on current component prices. Projection of
future component prices is also calculated, basing the data
from IRENA, NREL, and Franhoufer. Grid Parity is also
calculated in this study. However, there are a number of
factors not included in this research, such as natural disasters,
economic recessions, as well as solar storms, as these factors
are far too difficult to predict both timing-wise as well as cost-
wise.
978-1-6654-1641-2/21/$31.00 ©2021
Authorized licensed use limited to: IEEE
University
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Agus Setiawan Nugroho Adi Triyono
Engineering and Technology Division
PT. PLN (Persero) PT. PLN (Persero)
Jakarta, Indonesia Jakarta, Indonesia
e-mail: nugroho.adi.t@pln.co.id
Eko Supriyono
Johor, Malaysia
e-mail: eko@utm.my
II. MATERIAL & METHOD
A. LCOE
The method used for the LCOE calculations is set to
project results up to the year 2050. LCOE is obtained by
dividing the total cost of running a solar panel system
throughout its entire life cycle divided by the energy it outputs
within the same period [1]. The cost of a solar system within
one life cycle is the total cost of investment and maintenance
within the same period. Investment cost is the cost of material,
delivery, tax, installation, and distributor profits. Maintenance
costs include inspection, cleaning, and component
replacement.
Data from journals, recent market data, and governmental
policies are used in calculating LCOE. This includes data for
solar panel, inverter, battery, and supporting components.
Variables used for LCOE calculation includes solar panel
type, battery type, inverter type, as well as payment methods.
The method used to calculate LCOE is illustrated in
Formula 1.1 below. LCOE is calculated based on total cost of
a solar panel system for one lifecycle divided by total energy
generated within the same time period [1]. Total energy
generated throughout its lifecycle is calculated by multiplying
the calibrated capacity of a solar panel system with average
amount of hours per day the system generates energy
multiplied by amount of days per year the system runs. The
calibrated capacity of a solar panel system is calculated by
summing the capacity after degradation each year. Average
hours per day of energy output is calculated by multiplying
capacity factor with number of hours in a day.
Average hours per day of output in Indonesia varies with
region due to differing climates and radiation. The largest
amount of output hours per day is located at the Kupang region
with average of 4.47 hours per day, while the lowest amount
is in Jambi with an average of 3.41 hours per day. The amount
used in following calculations in this study is based on the
average amount of hours in the Jakarta region with a score of
3.58 hours per day [9].
B. Component and Maintenance Costs
Maintenance on a solar panel system is needed in order to
preserve quality of components on the system during usage in
order to create optimum output. There are a multitude of
damage potentials that might require a system to be
maintained. For example, dust covering the panels can result
in an inefficient power output, replacing dead inverters due to
142
expiry are commonplace as well. Both these issues can be
negated by doing routine maintenance by cleaning and
replacing support parts on the system.
Cleaning the solar panel can be done once annually,
requiring one manpower per 8 kWp daily. In one month, with
22 days effective work, a minimum of 176 kWp of solar
panels is to be cleaned ideally. The payment of the cleaning
crew is to follow the national monthly minimum wage, which
brings the cost per kWp to Rp (Rupiahs) or IDR 28,409.
Total cost of maintenance for 20 years is IDR 937,000.
This amount includes cleaning, solar panel and inverter parts
replacement, and balance of system [4], [10]. The cost of
components per model along with price projections and Fig. 1 Solar LCOE NREL model a without battery.
references can be seen in Table 1 above.
C. LCOE Modeling
Two formulas used for LCOE modeling are:
1. NREL Formula [1]

((𝑇𝑜𝑡𝑎𝑙 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝐶𝑜𝑠𝑡 𝑥 𝐶𝑅𝐹) + 𝑂&𝑀 𝐶𝑜𝑠𝑡)

𝐿𝐶𝑂𝐸 =
8760 𝑥 𝐶𝐹
(1)

Based on formula 1, there are multiple variables needed to

calculate NREL LCOE. These variables are:
a. Total Investment Cost, total investment needed to
construct a system. Fig. 2 Solar LCOE SunPower model a without battery.

b. Capital Recovery Factor (CRF), a ratio between the

value of an investment based on discount rate and the a. Total Investment Cost
length of investment [2], [11]. b. Operational & Maintenance Cost (O&M Cost)
c. Discount rate is the amount to be paid after counting in
((𝐷𝑟 𝑥 (1 + 𝐷𝑟)(1 + 𝐷𝑟)!"#$% inflation, foreign exchange rates, and financial administrative
𝐶𝑅𝐹 = (2)
((1 + 𝐷𝑟 !"#$% ) − 1 fees.
Where, Dr : Discount rate. d. Length of PV Operation in years
c. Operational & Maintenance Cost (O&M Cost) e. System degradation rate is the rate of output power
decline of a PV
d. 8760, number of hours in a year
Based on the formulas, there are a few LCOE models to
e. Capacity factor (CF) of an energy generating system calculate, being:
1. LCOE using a silicon solar panel without batteries
2. SunPower (Model A)
2. LCOE using a silicon solar panel with batteries of
𝑂&𝑀 𝐶𝑜𝑠𝑡
!"#$%
𝑇𝑖 + ∑&'(
(1 + 𝐷𝑟)!"#$% varying capacity (Model B). Battery capacity used is 1x, 1.5x,
𝐿𝐶𝑂𝐸 = 2.5x, and 3x of the PV system capacity.
𝐼𝑛𝑖𝑡𝑖𝑎𝑙 𝑘𝑊ℎ (3)
(1 − 𝐷𝑒𝑟)!"#$ 𝑥
𝑘𝑊𝑝
∑!"#$% Every model will be calculated using the two formulas to
&'( (1 + 𝐷𝑒𝑟)!"#$
further understand the difference between the LCOE
Based on formula 3, there are multiple variables needed to generated by the two formulas.
calculate SunPower LCOE. These variables are:
D. LCOE Model A
TABLE I. COMPONENT PRICE AND REFERENCE Model A is an on-grid LCOE projection model using
Item Used Lifetime Capacity Price (Rp Reference Silicon PERC solar panel, string inverter, without using
in or IDR) batteries. The cost of solar panel and inverter shown includes
Solar Model 5158000 shipping fees from China to Indonesia (Table 1).
Panel Si A,B 20 1 kW [5]
PERC Using formula 1, the value of Solar LCOE Model A in fig.
Inverter Model
5 1 kW
1251000
[6]
1 with a discount rate of 10% in 2020 with a value of IDR
String A 1,069/kWh is still higher than Coal Power LCOE of Suralaya
Inverter Model 1764000 and Jawa 7 Coal Fired Steam Power Plant (As a reference for
10 1 kW [7]
Hybrid B
Battery Model 1195000
the generator with the cheapest price in the Java-Bali system).
Lead Acid B
5 1 kW [8] Solar LCOE with a discount rate of 10% will reach grid parity
on the year 2050 with a value of IDR 547/kWh. Meanwhile

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Solar LCOE with a discount rate of 5% will reach grid parity grid parity until the year 2050 where the value will be IDR
on the year 2029 with a value of IDR 545/kWh, and Solar 651/kWh. Meanwhile for a discount rate of 10% in 2020, the
LCOE without a discount rate already has a value lower than value of LCOE is IDR 1,820/kWh. This LCOE will be lower
both Suralaya and Jawa 7 Coal Power LCOE in 2020, with a than the electricity tariff in 2038 with a value of IDR
value of IDR 475/kWh. Fig. 2 shows a calculation of Solar 1,115/kWh, LCOE with a discount rate of 10% will not reach
LCOE using formula 3. It can be observed that Solar LCOE grid parity until the year 2050 with a value of IDR 938/kWh.
with a discount rate of 10% in 2020 with a value of IDR
956/kWh is still more expensive than Coal Power LCOE, and Fig. 6 is a calculation of Model B LCOE using formula 3
will reach grid parity on the year 2044 with a value of IDR with a 1.5x battery capacity of the solar panel system. In 2020,
543/kWh. On 2050, the value will be lower than the Coal without discount rate, the LCOE value is IDR 707/kWh. This
Power LCOE with a value of IDR 496/kWh. LCOE will reach grid parity in the year 2028 with a value of
IDR 527/kWh. For a discount rate of 5% in the year 2020, the
For a discount rate of 5%, the value for 2020 is IDR value is IDR 1,111/kWh. In 2048, the value will be IDR
656/kWh, reaching grid parity on the year 2026 with a value 594/kWh. This value is lower than the Jawa 7 Coal Power
of IDR 534/kWh. The value of the system on 2050 is IDR Plant LCOE but higher than the Suralaya Plant LCOE.
341/kWh. Similar to NREL LCOE, the value of a system Meanwhile for a discount rate of 10% in 2020, the value of
without a discount rate is already lower than the Coal Power LCOE is IDR 1,604/kWh. This LCOE will be lower than the
LCOE. electricity tariff in 2030 with a value of IDR 1,106/kWh,
LCOE with a discount rate of 10% will not reach grid parity
E. LCOE Model B until the year 2050 with a value of IDR 826/kWh.
Model B is a solar panel LCOE projection model using
Silicon Solar Panel, Hybrid Inverter, with a Lead Acid battery
capacity of 1x, 1.5x, 2.5x, 3x of the Solar Panel System
Capacity. Hybrid inverter is used because of its specification
compatibility with a battery-enabled rooftop solar panel unit,
as well as its cheaper price compared to string inverter and
solar charger controllers. Solar charger controller is a device
used to regulate power received by the battery in order to
prevent overcharging. After battery is fully charged, excess
power will be directed straight to the load. hybrid inverters
function as both an inverter and a solar charger controller.
Fig. 3 is a calculation of Model B LCOE using formula 1.1
with a 1x battery capacity of the solar panel system. In 2020,
without discount rate, the LCOE value is IDR 713/kWh. This Fig. 3 Solar LCOE NREL model B battery 1x.
LCOE will reach grid parity in the year 2028 with a value of
IDR 536/kWh. For a discount rate of 5 generation cost. LCOE
with a discount rate of 5% will not reach grid parity until the
year 2050. Meanwhile for a discount rate of 10% in 2020, the
value of LCOE is IDR 1,627/kWh. This LCOE will be lower
than the electricity tariff in 2023 with a value of IDR
1,443/kWh, and lower than the electrical energy generation
cost in 2031 with a value of IDR 1,119/kWh. LCOE with a
discount rate of 10% will not reach grid parity until the year
2050 with a value of IDR 845/kWh. Fig. 4 is a calculation of
Model B LCOE using formula 3 with a 1x battery capacity of
the solar panel system. In 2020, without discount rate, the
LCOE value is IDR 634/kWh. This LCOE will reach grid
parity in the year 2025 with a value of IDR 523/kWh. Solar
LCOE will have a value of IDR 337/kWh in 2050. For a Fig. 4 Solar LCOE SunPower model B battery 1x.
discount rate of 5% in the year 2020, the value is IDR
994/kWh. LCOE with a discount rate of 5% will reach grid
parity in 2048 with a value of IDR 536/kWh. For a discount
rate of 10%, the value of IDR 1,448/kWh is still higher than
the electrical energy generation cost, and will be lower than
aforementioned cost in 2028 with a value of IDR 1,083/kWh.
In 2050, the Solar LCOE value would still be more expensive
than the Coal Power LCOE with a value of IDR 758/kWh.
Fig. 5 is a calculation of Model B LCOE using formula 1
with a 1.5x battery capacity of the solar panel system. In 2020,
without discount rate, the LCOE value is IDR 795/kWh. This
LCOE will reach grid parity in the year 2033 with a value of
IDR 531/kWh. For a discount rate of 5% in the year 2020, the
value is IDR 1,254/kWh. This value is will be lower than the Fig. 5 Solar LCOE NREL model B battery 1.5x.
electrical energy generation cost in 2023 with a value of IDR
1,103/kWh. LCOE with a discount rate of 5% will not reach

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 without discount rate, the LCOE value is IDR 1,041/kWh.
This LCOE will reach grid parity in the year 2050 with a value
of IDR 538/kWh. For a discount rate of 5% in the year 2020,
the value is IDR 1,650/kWh. This value is still higher than the
electricity tariff and will continue to do so until 2032 when it
reaches a value of IDR 1,084/kWh. This LCOE will not reach
grid parity because even in the year 2050 it still has a value of
IDR 842/kWh. Meanwhile for a discount rate of 10% in 2020,
the value of LCOE is IDR 2,399/kWh. LCOE with a discount
rate of 10% will not reach grid parity because even in the year
2050 it still has a value of IDR 1,217/kWh.
Fig. 10 is a calculation of Model B LCOE using formula 3
with a 3x battery capacity of the solar panel system. In 2020,
without discount rate, the LCOE value is IDR 927/kWh. This
Fig. 6 Solar LCOE SunPower model B battery 1.5x.
LCOE will reach grid parity in the year 2043 with a value of
IDR 528/kWh. For a discount rate of 5% in the year 2020, the
value is IDR 1,461/kWh. This value is still higher than the
electricity tariff and will continue to do so until 2026 when it
reaches a value of IDR 1,095/kWh. This LCOE will not reach
grid parity because even in the year 2050 it still has a value of
IDR 746/kWh. Meanwhile for a discount rate of 10% in 2020,
the value of LCOE is IDR 2,128/kWh. LCOE with a discount
rate of 10% will not reach grid parity because even in the year
2050 it still has a value of IDR 1,086/kWh.
Model B LCOE is influenced by the cost of battery (up to
3x the solar panel system capacity) which is significantly
higher than the cost of on-grid non-battery system. Investment
on the battery can raise the cost of the system by 55%
compared to Model A. This increase in investment cost will
Fig. 7 Solar LCOE NREL model B battery 2.5x. impact the resulting LCOE value. Implementing a battery to
the system will not increase energy generated by the system,
Fig. 7 is a calculation of Model B LCOE using formula 1 but instead will serve as a media of energy storage when there
with a 2.5x battery capacity of the solar panel system. In 2020, is excess unused energy generated.
without discount rate, the LCOE value is IDR 959/kWh. This
LCOE will reach grid parity in the year 2044 with a value of
IDR 542/kWh. For a discount rate of 5% in the year 2020, the
value is IDR 1,518/kWh. This value will be lower than the
electrical energy generation cost in 2023. As well as lower
than the electricity tariff in 2029 with a value of IDR
1,068/kWh. This LCOE will not reach grid parity until the
year 2050 with a value of IDR 778/kWh. Meanwhile for a
discount rate of 10% in 2020, the value of LCOE is IDR
2,206/kWh. This LCOE will be lower than the electricity tariff
in 2032 with a value of IDR 1,454/kWh, LCOE with a
discount rate of 10% will not reach grid parity until the year
2050 with a value of IDR 1,124/kWh.
Fig. 8 is a calculation of Model B LCOE using formula 3 Fig. 8 Solar LCOE NREL model B battery 2.5x.
with a 2.5x battery capacity of the solar panel system. In 2020,
without discount rate, the LCOE value is IDR 854/kWh. This
LCOE will reach grid parity in the year 2037 with a value of
IDR 529/kWh. For a discount rate of 5% in the year 2020, the
value is IDR 1,344/kWh. This value will be lower than the
electrical energy generation cost in 2025 with a value of IDR
1,075/kWh. This LCOE will not reach grid parity until the
year 2050 with a value of IDR 689/kWh. Meanwhile for a
discount rate of 10% in 2020, the value of LCOE is IDR
1,958/kWh. This LCOE will be lower than the electricity tariff
in 2028 with a value of IDR 1,428/kWh, and lower than the
electrical energy generation cost in 2044 with a value of IDR
1,094/kW. LCOE with a discount rate of 10% will not reach
grid parity until the year 2050 with a value of IDR 1,004/kWh.
Fig. 9 is a calculation of Model B LCOE using formula 1
with a 3x battery capacity of the solar panel system. In 2020, Fig. 9 Solar LCOE NREL model B battery 3x.

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Fig. 10 Solar LCOE NREL Model B Battery 3x.
Fig. 11 LCOE with International Solar LCOE (IRENA, 2019).
The value obtained using the SunPower Formula is shown
to be lower than the result obtained using NREL Formula.
Nevertheless, the difference is minimal, as evident in Model
B with 1x battery capacity. It is shown that using both
formulas, there is only one year difference in time to reach
grid parity, with SunPower formula being the earliest.
F. Comparison of Indonesia Solar LCOE with
International Solar LCOE
Solar LCOE progression trend is headed towards a
decline. LCOE of 2030 is located at the top margin of $0.08
USD and lower margin of $0.02 USD [3]. Indonesia’s LCOE
is located between the top and bottom margin of IRENA’s
International LCOE.
Solar LCOE in an international scale is shown in Fig. 11.
Solar LCOE projected from 2010 is shown to be $0.37/kWh
and declines to about $0.085/kWh in 2018. The cost
projection, which is set to reach 2030, is divided into two
categories, top and bottom. The top of 2030 is valued at
$0.08/kWh or Rp 1200/kWh, whilst the bottom is valued at
$0.02/kWh or Rp 300/kWh. The top of 2050 is valued at
$0.05/kWh or Rp 750/kWh, whilst the bottom is valued at
$0.01/kWh or Rp 150/kWh. The conversion rate used for USD
to Rupiah is USD $1 = IDR 15000.
There are multiple factors affecting the value of LCOE, of
which one is the price of solar panels. The price of solar panels
in 2030 in the top category is $834/kWp while the bottom
category is $340/kWp. The price of solar panels decreased in
2050 with value of the top category at $481/kWp whilst the
bottom category is at $146/kWp. Status of the LCOE
projection released by IRENA is shown to be on track which
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indicates that the projection is currently following the actual
present LCOE. [3]
III. CONCLUSION
Solar LCOE without battery (Model A) with discount rate
of 10% for the year 2020 is still more expensive than the
electrical energy generation cost with a value of
IDR1,069/kWh, and will reach grid parity by 2050 with a
value of IDR 547/kWh.
Solar LCOE with battery of 1x and more of the solar panel
capacity with discount rate of 10% will not reach grid parity
by 2050.
Until the year 2030, using discount rate of 10%, Solar
LCOE using battery (1x panel capacity and above) will not be
cheaper than the existing electrical energy generation cost.
ACKNOWLEDGMENT
This research was supported by PT PLN (Persero). We
thank all parties involved who provided data, insight and
expertise that greatly assisted the research, as well as
comments and reviews which helped bring this research to
complete fruition.
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