Exploring Alternative Policies to Reduce Electricity Subsidies in Indonesia

Electricity subsidies in Indonesia remain high and tend to increase. Existing studies generally propose electricity subsidy reform through economic price adjustment; however, this option potentially arises political social conflicts. The government the State Company have also undertaken several measures decrease supply costs but those ineffective due increasing energy prices needed as fuels for power generations. Our study analyses effectiveness of two alternative grants LED lamps rooftop photovoltaic (PV), reduce low-income residential customers with 450 VA 900 capacity limits. analysis result is that replacing existing all will cost US$ 313.7 million 208.7 million/ year 15 years. On other hand, installing PV system bring down subsidies. investment on-grid between 827.6 1,310.3 per house, while savings 20 years are 724.1 744.8.