Profitability on Solar Power Plant Systems for Households Electricity in Indonesia

This paper presents technical and economic analysis of hybrid off-grid SPP (Solar Power Plant) for a home in Yogyakarta City, Indonesia. The system consists of eight polycrystalline photovoltaic with 410Wp each, 3kW inverter and a 48V 300Ah LiFePO4 (lithium ferrophosphate) battery. The harvested energy was recorded starting from November 2021 to the end of August 2022. The recorded data shows the variation of values from 3.2kWh to 17.4kWh. The annual energy is 3,740.7 kWh by considering 85% devices efficiency. Furthermore, an annual average final yield is 1,140.5 kWh/kWp and performance ratio is 63.4%. NPV (net present value) was used as an indicator of feasibility investments by considering device lifespan, 7% discount rate, 0.8% of PV (photovoltaic) degradation rate and 1.5% battery fade per year. This study highlights the potential benefits of investing in hybrid off-grid SPP under specific conditions and advocates for government intervention through regulations to enhance the SPP applications.


INTRODUCTION
Based on solar resource maps (Solargis, 2018), Indonesia has a significant potential for sunlight, estimated at around 3.6 -6 kWh/m 2 /day, with energy harvesting of 1,170 -1,530 kWh/kWp per year.According to Nayak et al. (Nayak et al., 2019) this potential should be taken into account and explored as an alternative source of electrical energy.Unfortunately, the solar capacity utilization in Indonesia is only 2% of total renewable capacity by 2021 (International Renewable Energy Agency, 2021).
The capacity of solar energy as an alternative source has witnessed significant growth in the past decade.According to data presented in (International Renewable Energy Agency, 2023), the total installed capacity of solar power plants (SPP) worldwide reached 1.05 TW by the end of 2022.Although the SPP capacity falls slightly behind hydropower, which reached 1.25 TW by the same period, it surpasses wind power (0.89 TW), bioenergy (148.9GW), and geothermal (14.8 GW) capacities (International Renewable Energy Agency, 2023).However, in terms of capacity expansion, solar power plants have emerged as the leading renewable energy source.
To expedite the adoption of renewable energy (RE) in Indonesia, the government established the Dewan Energi Nasional (National Energy Council) in 2007.Additionally, the government issued Government Regulation No. 79 of 2014 (Indonesia, Pemerintah Pusat, 2014) concerning national energy policies.That regulation and policy declare the target for RE capacity reach 23% in 2025 and 31% in 2050.
At the operational level, the government has issued Presidential Decree No. 22 of 2017 (Indonesia, Pemerintah Pusat, 2017), which outlines the national energy public plan.This decree highlights the technical potential of solar power plants (SPP) and sets expectations for each province in Indonesia.According to the decree, the SPP potential is projected to reach 6.5 GW by 2025, as illustrated in Figure 1.Province in Indonesia (Indonesia, Pemerintah Pusat, 2017) Hendra Setiawan dan Ali Parkhan ELKOMIKA -674 The Ministry of Energy and Mineral Resources targets a rooftop solar photovoltaic (PV) total capacity of 3.6 GW in 2025 which is 450 MWp in 2022, 900 MWp in 2023, 1,800 MWp in 2024 and 3,600 MWp in 2025 (Humas EBTKE, 2022).However, until the end of January 2022, the total capacity of rooftop solar PV was 51.19 MWp or around 11.4% of the 450 MWp target.
Numerous articles regarding the implementation of solar power plants (SPP) in Indonesia have been published.Off-grid SPP systems were presented in studies by Hasanah et al. (Hasanah et al., 2018), Syafii et al. (Syafii et al., 2019), Naim (Naim, 2020), Syawil dan Kadir (Syahwil & Kadir, 2021), and Alwani et al. (Alwani et al., 2022).Additionally, on-grid systems were discussed in works by Naim and Wardoyo (Naim & Wardoyo, 2017), Nurosyid et al. (Nurosyid et al., 2019), and Hutajulu et al. (Hutajulu et al., 2020).Studies comparing off-grid and on-grid SPP systems, such as the one conducted by Jalaluddin and Safarudin (Jalaluddin & Safarudin, 2020), explored the design and technical aspects of SPP and provided data generated by SPP over short time durations.However, to obtain a more accurate representation of reality, it is essential to have long-term electrical data records (at least 6 months) from SPP systems.
The availability of valid data over a sufficient period is crucial for further studies and serves as strong evidence of the benefits of solar power plants (SPP).Furthermore, most articles predominantly focus on the technical aspects of SPP rather than the economic aspects.Therefore, in this article, we aim to contribute a comprehensive perspective on SPP, covering both technical and economic aspects by providing real data obtained from an SPP system.The data was collected over a 10-month period (November 2021 to August 2022) following the installation of the SPP in Yogyakarta, Indonesia.Based on this data, we conducted an analysis of the SPP to address the question, "Is the implementation of SPP in Indonesia profitable?"We hope that the results of this study will be beneficial for individuals and organizations considering the implementation of SPP systems in Indonesia, as well as for the government in expediting the development of SPP across the country.
The aim of this research is to assess the feasibility of off-grid solar power generation systems for household applications in Indonesia.The research comprises four stages: (1) designing and installing off-grid solar power generation systems, (2) gathering energy harvesting data, (3) analyzing system performance, and (4) conducting an economic feasibility analysis.

METHOD
In this research, the method consists of designing an SPP system, implementing it, observing the resulting data, and conducting an analysis of that data.The design process was carried out based on the actual load profile conditions of a house in the Yogyakarta area.Based on this load profile, calculations were made for the required capacities of the solar panel, inverter, and battery.The details of our design are presented below.

Location
The SPP system is situated in the Special Region of Yogyakarta, with Google Maps coordinates -7.806754, 110.426279, and an elevation of 100 meters above sea level.
According to the data provided by Solargis (Solargis, 2022), the SPP location exhibits a photovoltaic power output of 4.09 kWh/kWp per day or 1493.4 kWh/kWp per year.This value aligns with the average photovoltaic power potential for the Indonesian region, as reported by Solargis in 2018 (Solargis, 2018).Consequently, the findings from this SPP system can be extrapolated to other typical SPP systems throughout Indonesia, regardless of the specific components involved.

Load Profile
The SPP system is utilized to provide electricity for the household, replacing the previous reliance on the Perusahaan Listrik Negara (PLN), the State Electricity Company.The household was previously a customer of PLN with a maximum power capacity of 1,300VA.The loads to be powered by the SPP system include common household appliances such as lamps, television, air conditioning, and refrigerator.The complete load profile for the household is provided in Table 1

Solar Power Plant Specification
The total energy consumption is estimated to range from 10.53 kWh to 22.37 kWh per day.The peak load, which occurs when all appliances are turned on simultaneously, is 4,288 W. The design of the SPP system takes into account the following constraints: (a) maximizing the duration of electricity and minimizing blackouts, (b) maximizing the utilization of solar energy while utilizing backup energy from PLN, and (c) minimizing the budget.Based on these constraints, the SPP system is designed with the following specifications.

Photovoltaic (PV)
Indonesia has a potential sunlight availability of around 3.6 -6 kWh/m 2 /day (Solargis, 2018).Assuming a solar power potential of 1 kW/m 2 , this translates to an irradiation duration of approximately 3.6 -6 hours per day.Let's consider an irradiation duration of 4.5 hours, resulting in a solar panel or PV capacity requirement of 2.34 to 4.97 kWp for a daily energy output of 10.53 to 22.37 kWh.
Table 2 displays several PV available in Indonesia, along with their prices, aiming to match the 2.34 to 4.97 kWp capacity range.Please note that the prices listed were obtained from the lowest price offerings on Indonesian online markets, as of early 2021.We have selected the three lowest-priced, i.e. 410 Wp Canadian poly, 330 Wp JA poly, and 200 Wp ICA mono.

Inverter
The proposed SPP system is a hybrid off-grid system.With a daily energy consumption of 22.37 kWh, the average power per hour amounts to 932 W.However, during peak load when all appliances are turned on, the total power can reach up to 4,290 W. Therefore, the suitable inverters for this system are either 3,000 W or 5,000 W. Considering budget constraints, a 3,000 W hybrid inverter is chosen.The detailed specifications of the inverter are provided in Table 3. Let's assess the compatibility of the PV candidates with the chosen inverter based on the inverter specifications.The key considerations include ensuring that the total open circuit voltage (Voc) of the PV array matches the optimum operating voltage of the inverter, and that the total power of the PV array aligns closely with the recommended PV configuration for the inverter.Table 4 presents these parameters for evaluation.

Battery
The required battery capacity can be determined based on either the load profile or the PV capacity.Considering the load profile, where the maximum energy consumption per day is 22.37 kWh and assuming equal energy consumption during daylight and night-time, the minimum battery capacity required is 11.2 kWh.For a 48V system with an 80% depth of discharge (DOD), the minimum battery current capacity would be 292Ah, approximately 300Ah.
From the PV capacity perspective, considering the expected energy generation by the PV system for 3.6 -6 hours of irradiation (11,680Wh), assuming equal energy consumption during daylight and night-time, the minimum battery capacity required during maximum irradiation is 9.84 kWh.For a 48V system with an 80% depth of discharge (DOD), the minimum battery current capacity is calculated to be 256.25 Ah.Hence, a battery capacity of 300 Ah is reasonable.
We have chosen to use LiFePO4 (LFP) batteries as the energy storage for several reasons.Firstly, LFP batteries are widely used and offer benefits such as long lifespan and high safety (Panchal, et al., 2017).Secondly, they are lightweight, require zero maintenance, and exhibit superior charge and discharge characteristics (Li & Ma, 2019).Additionally, Table 5 presents the specifications of the LFP batteries utilized in this project.To optimize the performance of the batteries, we have incorporated a battery management system (BMS) and active balancing.

Data Collecting
The installation of the SPP system commenced in April 2021.However, the collection of energy harvesting data began on November 1 st , 2021, and continued until August 31 st , 2022.The energy harvesting data was measured and displayed by the inverter, representing the total energy produced by the PV system during daylight hours.The data collection typically took place in the evening, between 6:00 PM and 7:00 PM.
Based on the collected data, we conducted an analysis from technical aspects, including efficiency calculations and statistical figures.Additionally, we assessed the economic value of the SPP system using Net Present Value (NPV).The detailed discussions regarding these aspects are provided below.

Technical Aspects
The initial value recorded on October 31 st , 2021, was 1,847.1 kWh, while the final value recorded on August 31 st , 2022, was 5,396.8kWh.There is a linear trend with a total energy harvest of 3,549.7 kWh over the course of 10 months.This translates to an average energy harvest of 354.97 kWh per month.However, the daily energy harvest exhibits significant variation, ranging from 3.2 kWh to 17.4 kWh, as shown in Figure 2. Assuming 100% PV and SCC efficiencies, this indicates that the duration of irradiance varies from 1.0 hour to 5.3 hours per day.The annual average final yield and performance ratio (PR) serve as crucial performance indicators for any PV system.The PR represents the relationship between the actual power generation of the photovoltaic system and the reference power generation (Yref) as defined by the International Electrotechnical Commission (International Electrotechnical Commission, 2021).The annual average final yield (Yf) is a measure of the energy produced by the PV system (Ep) divided by the installed power (Pnom) forecast the annual energy production, we utilize the PVGIS data presented by European Commission website (European Communities, 2023), where the energy yield from 2021 to August 2022 represents approximately 80.66% of the total annual energy production.Based on an energy harvest of 3,549.7 kWh during this period, the estimated annual energy production amounts to 4,400.8 kWh.Taking into account the inverter efficiency of 85% as stated in Table 3, the total energy required to supply the load is calculated as 3,740.7 kWh.Consequently, the annual average final yield is determined to be 1,140.5kWh/kWp.This performance is 10.2% lower than the findings of Lindig et al. (Lindig et al., 2021), which reported an annual average final yield of 1,270 kWh/kWp for global horizontal irradiance (GHI) in the range of 1,600-1,800 kWh/m 2 /year.According to Solargis (Solargis, 2018), the global horizontal irradiance (GHI) in Indonesia ranges from approximately 1,170 to 2,190 kWh/m 2 /year.However, at the specific location where the photovoltaic system is installed, the GHI is approximately 1,800 kWh/m 2 With an annual average final yield (Yf) of 1,140.5 kWh/kWp, we can calculate the performance ratio (PR) based on (1), which amounts to 63.4%.This value is 5.4% lower than the average PR reported for GHI in the range of 1,600-1,800 kWh/m 2 /year, which is 67% (Lindig et al., 2021).

Economical Aspects
To set up the SPP system, a total initial investment of 4,492 USD is required, as detailed in Table 6.Please note that the prices of the solar devices are provided in Indonesian Rupiah (IDR) and have been converted to US dollars using an exchange rate of IDR 15,000 per 1 US dollar.Consequently, the project's initial cost amounts to 1.37 USD/Wp, which is than the initial investment for Concentrated Solar Power in China, where the range was between 3.05 and 5.77 USD/Wp (Yang et al., 2018).The anticipated lifespan of a device refers to the duration it is expected to remain operational after being utilized.The user manual states that the expected lifespan for PV is 25 years, while SCC is anticipated to last 15 years.However, the lifespan of a battery is dependent on usage and its environment.Research indicates that the lifespan of a battery ranges from 8 to 12 years et al., 2020).In this case, we will consider a battery lifespan of 12 years due to an 80% depth of discharge (DOD).According to Kennedy (Kennedy, 2021), the lifespan of a centralized residential string inverter is approximately 10 to 15 years, and we will take the middle value of 13 years.Consequently, during the 24 years of operation, it will be necessary to replace the SCC, inverter, and battery at least once.
The total amount of energy produced annually is approximately 3,740.7 kWh.PLN, the state electricity company, has created 37 different tariff groups to set electricity tariffs.The tariff adjustment at the end of 2022 has been set at IDR 1,444.70 for non-subsidized residential customers with a power limit of 2,200 VA and commercial groups with a power limit ranging from 6,600 VA to 200 kVA (PLN, 2022).As a result, implementing SPP will yield a total savings of IDR 5,404,189 or USD 360.3 per year.
According to Darghouth et al. (Darghouth et al., 2020), the yearly expense for the operation maintenance (O&M) of SPP systems in Indonesia stands at 350,000.00 IDR/kWp or 23.33 USD/kWp of the installed solar panel capacity.Consequently, the annual O&M cost would amount to IDR 1,148,000 or USD 76.5.Based on this, the net income for a year would be USD 283.8, which is derived by subtracting USD 76.5 from USD 360.3.
To determine the economic value of an SPP investment, a net present value (NPV) calculation is performed.NPV represents the current worth of an investment over its lifetime, taking into account the time value of money.The NPV formula is expressed as follows: where  is net cash inflow -outflows during a single period t,  is the discount rate or rate of return on capital, and t the number of times periods.
According to the IRENA (International Renewable Energy Agency, 2020), the discount rate specified for Organization for Economic Cooperation and Development (OECD) countries and China is 7.5%, while for other countries, it is 10%.However, IEA (International Energy Agency, 2020) assumes a discount rate of 7% specifically for developing countries.
For the NPV calculation (2), we will use a discount rate (i) of 7% since it is appropriate for developing countries.The analysis period for the NPV calculation is 24 years, which aligns with the previous information provided.Additionally, we will consider a PV system performance loss or degradation rate (DR) of -0.8% based on the research by Lindig et al. (Lindig et al., 2021).
According to Naumann et al. (Naumann et al., 2020), for a battery with 80% depth of discharge (DOD) and 1C in charge and discharge, the battery's discharge capacity will degrade to 70% after approximately 9,000 full equivalent cycles (FEC).Assuming one FEC per day, 9,000 FECs is equivalent to 25 years.This degradation rate corresponds to a 1.5% reduction in battery capacity per year.Since the battery stores half of the total energy obtained in one day, the total energy yield will decrease by 0.75% per year.In further, we call it battery fade (BF).Additionally, it is assumed that there is no residual value for any of the devices involved in this system.
Based on the parameters provided and assuming flat electricity tariffs over 24 years, the NPV profile is depicted in Figure 3.The investment value at the end of the 24-year period is USD -3,139.99.This negative value indicates that the investment is not profitable.Let's consider various scenarios to explore possibilities for making the SPP system profitable within 24 years.Firstly, we can reduce the discount rate to 6%, 4%, 2%, and 0%, while keeping the other parameters unchanged.Figure 4 illustrates the NPV profile for this scenario, and it indicates that changing the discount rate alone does not make the SPP system profitable.
The internal rate of return (IRR) is a discount rate at which the net present value (NPV) of all cash flows becomes zero.In this scenario, we have determined that the IRR is -5.37%.This indicates that it is not possible to make the SPP system profitable using this particular scenario.In the second scenario, we consider reducing the PV degradation rate (DR), reducing battery fade (BF), and increasing the efficiency (DE) of the devices, including the SCC and inverter.Despite making these changes that approach an ideal condition, the SPP investment still does not generate a profit within the 24-year timeframe.It is observed that the impact of these parameter adjustments is relatively less significant compared to the effect of the discount rate.This suggests that the discount rate plays a more significant role in determining the profitability of the SPP investment than the individual changes made to the PV degradation rate, battery fade, and device efficiency.
In the third scenario, we consider using the battery for the full 24-year duration without replacement.This means there is no expense in the 12 th year for battery replacement.However, the PV degradation rate, battery fade, and device efficiency remain the same as in the first scenario.Despite this change, as depicted in Figure 5, the SPP investment still does not become profitable within the given timeframe.As mentioned before, the SPP investment can profit with certain parameters.However, this condition is difficult to meet in the real implementation.Thus, we need to find another alternative solution to make SPP investment profit.We propose two alternative solutions that involve government regulations.First, installation subsidy by government such that SPP system is profit within a certain period.How much subsidy should be provided?Recall third scenario with initial cost reduction, we found that the maximal initial cost of USD 2,584 instead of 4,492 (for 3,280Wp of PV capacity) to get NPV USD 0.00 at 24th year.Thus, the subsidy equal to USD 581.7/kWp.For 900MWp target of rooftop solar PV in 2023, as reported by Dirjen EBTKE (Humas EBTKE, 2020), 0.5 billion US dollar should be provided by the government.
Another aspect involving government regulation is the potential increase in electricity tariffs.Figure 7 presents the NPV profile of the third scenario with different increments in electricity tariffs.It is observed that a 5% annual increase in electricity tariffs can lead to profitability in SPP investments after 24 years.Additionally, the analysis reveals that a minimum increment of 4.9% in electricity tariffs per year is necessary to achieve an NPV of 0 at the end of the 24year.The historical data shows that the residential electricity tariff price increased from IDR 563.05 per kWh in 2005 to IDR 1,444.7 per kWh in 2022.This represents a 156% increase over a span of 17 years, averaging about 5.7% annual growth.If this upward trend continues in the coming years, it indicates a favorable environment for investments in off-grid solar power plants to be profitable.

CONCLUSION
We have designed an off-grid solar power plant with a capacity of 3.28 kilowatts peak (kWp) to serve as the main source of electricity for households.The system comprises of 8×410Wp PV polycrystalline, 3000W hybrid off-grid inverter, and 48V 300Ah LiFePO4 battery system.The daily energy harvested from the PV panels varies between 3.2 kilowatt-hours (kWh) and 17.4 kWh, depending on the amount of sunlight received.This corresponds to an irradiance duration of 1.0 to 5.3 hours per day.The estimated annual energy generation of the off-grid solar power plant is 3,740.7 kilowatt-hours (kWh), considering an inverter efficiency of 85%.This estimate aligns closely with the prediction data provided by PVGIS, which is released by the European Communities.Furthermore, the annual average final yield of the system is calculated to be 1,140.5kWh per kilowatt-peak (kWp), with an average annual performance ratio of 63.4%.Although these results may be lower than those reported in previous studies conducted in Europe, it is important to note that they can be improved by utilizing higher efficiency PV panels and inverters.Overall, based on the estimated energy generation and performance metrics, we can conclude that the system is well installed and functioning correctly.Moreover, in the economic analysis of the SPP investment, we estimate that increasing the electricity tariff by 4.9% per year would make SPP investments for households in Indonesia more attractive.

Figure 1 .
Figure 1.PV Potential and Capacity Targets in 2025 are Based on the Location of EachProvince in Indonesia(Indonesia, Pemerintah Pusat, 2017)

Figure 2 .
Figure 2. Daily and Weekly Variation of Energy Harvested from PV During November 1st, 2021, to August 31st, 2022

Figure 4 .
Figure 4.The Investment Remains Unprofitable for Various Discount Rates (i) and A Constant Electricity Tariff

Figure 5 .
Figure 5. NPV Profile Indicates that Even by Extending the Battery's Lifespan to Its Maximum Without ReplacementIn the fourth scenario, we combine the elements of the previous scenarios, including the discount rate (i), PV degradation rate (DR), battery fade (BF), devices efficiency (DE), and the absence of battery replacement cost.Figure6displays the NPV profile for this combined scenario.Based on the results, the SPP investment will become profitable after 24 years if the discount rate (i) is 3%, PV degradation rate (DR) is 0.3%, battery fade (BF) is 0.5%, and devices efficiency (DE) is 95%.

Figure 7 .
Figure 7.The Investment in SPP Appears to be Profitable When the Electricity Tariff Increases by 5% or More Per Year

Table 2 .
Various Photovoltaic Quantities and Budgets to Match the 2.34 to 4.97 kWp

Table 3 .
Detail of the Inverter Specifications

Table 4 .
The Comparison of PV Configurations to Match the Inverter's Voc With A Total PV

Table 4
suggests three recommended PV array configurations: 2S 4P for the 410Wp Canadian panel, 2S 9P for the 200Wp ICA panel, and 2S 5P for the 330Wp JA panel.Considering budget constraints, the 2S 4P configuration for the 410Wp Canadian panel is chosen for the PV array in the SPP system.

Table 6 .
Initial Capital Consisting of PV, Battery, Inverter, and Initial Installation