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close this bookPhotovoltaic Household Electrification Programs - Best Practices (WB)
close this folderAnnex 1 : ASTAE case studies in PV household electrification
View the document(introduction...)
View the documentIndonesia
View the documentSri Lanka
View the documentThe Philippines
View the documentThe Dominican Republic
View the documentConclusions


3. The Presidential Assistance Project (BANPRES), funded by a presidential grant through the Development Budget (DIP) was used to set up a revolving fund. BANPRES has resulted in the installation of more than 3,300 solar home systems since 1991. The goal of the project is to test the technical and social viability of photovoltaics for large-scale household electrification programs as a means of providing cost-effective electricity services to a portion of the approximately 20 million rural Indonesian households that are unlikely to receive grid electricity for at least ten years. As a result of the positive BANPRES Project experiences, commercially-oriented solar home system initiatives and other programs sponsored by the government have led to nearly 20,000 solar home systems installed to date. The government intended the BANPRES project to be a precursor to a one million household, 50-MWp solar PV program.

4. The Government of Indonesia places a high priority on electrification and is committed to supporting geographically balanced development of rural areas by increasing the welfare of the people and stimulating the growth of economic activities. The BANPRES Project, with project sites in 13 provinces, was designed to make effective use of existing rural structures and capabilities. The Project is led by the Agency for the Assessment and Application of Technology (BPPT). The BPPT is also responsible for all technical aspects including specifying and qualifying products, and field testing and monitoring. With the assistance of local governments, participating villages are selected based on their desire for electricity, location relative to the administrative area of a qualifying village cooperative (KUD), grid electrification plans, and capacity of householders to pay the down-payment and monthly installments. The KUDs administer the project at the village level. They are responsible for fee collection, maintenance services and enforcing disconnections for payment defaults. The Ministry of Cooperatives (MOC) interfaces between the government and the KUDs. Bank Rakyat Indonesia (BRI) is part of the institutional structure primarily because of its widespread presence in rural areas and fees collected by the KUDs are deposited at the BRI village branch. The implementation of the project is overseen by a Steering Committee. The committee is chaired by BPPT and is composed of key government agencies including the Directorate General for Electricity and Energy Development, PLN (public utility), Bank Indonesia, BRI, MOC and Ministry for Transmigration.

5. Once a village is selected as a project site, residents are chosen to receive BANPRES systems based on their ability to pay and whether or not they are active KUD members. Potential consumers must become full KUD members, if they are not already, and must be willing to sign a lease-purchase agreement with the implementing KUD. The agreement includes a Rp. 1,000 stamp duty. The KUD then contracts a private solar home system supplier to install the system that meets BPPT specifications. KUDs collect the down-payments and subsequent monthly payments. The KUDs retains Rp. 500 per month per solar home system to cover their costs and transfer the remainder to the BANPRES revolving fund account at BRI. Each KUD employs two maintenance and repair technicians. The user is responsible for battery replacement.

6. The solar home system consists of a 45- to 48-Wp PV panel, support structure, two fluorescent tube lights, switches, a 12-VDC outlet, wiring, an automotive battery, and a battery control unit. The system could generate 145 Wh/day with 6 hours of bright sunshine and is capable of providing 7-8 hours of lighting when operating both lights, or 5 hours of lighting and 5 hours of television. There are no major technical problems with the PV system or its major components or with users load management practices. BPPT assists local enterprises in designing and manufacturing all balance-of-system (BOS) components. Locally produced components are generally well designed and of adequate quality. Where deficiencies existed, BPPT works with the manufacturers to correct them. BPPT, MOC, and private enterprises did a thorough job of research and development, and project design throughout the pilot stage of solar PV project development. Warranty service is provided by equipment suppliers, and the suppliers are making an effort to abide by warranty terms and ensure that defective equipment is promptly replaced. Nevertheless, because the KUDs have not kept adequate spares, users have had to ask them to contact suppliers to send replacement parts, resulting in long lead times in the more remote areas.

7. Users pay a Rp. 50,000 down-payment, and Rp. 7,500 per month for 10 years for the PV system. The monthly fee for the solar home system was less than the PLN electricity service cost from a 450-W connection (about Rp. 4,000 per month for 30 kWh). The solar home system down payment and monthly fee does not allow for full cost recovery if the cost of money (about 18-20% per annum) is included in the monthly fee. Yet recipients often requested that the down payment be financed over several months. In contrast, other private sector solar home system sales targeted to more affluent households in rural Indonesia have down payment requirements of about Rp. 200,000 and monthly fees of about Rp. 20,000 per month.

8. In 1993, the fee collection rate in the BANPRES Project was about 60 percent. KUD officials attributed inadequate fee recovery to seasonal income patterns, short-term financial problems and families realizing they were unable to meet the solar home system financial obligations. In addition, the limited business management capability of some KUDs exacerbate the cost recovery problems. In many cases, the KUDs could not force users to comply with their agreements, since many KUDs did not always adhere to their contractual obligations. Despite strict penalties for late payments as specified in BANPRES guidelines, most KUDs have been handling disconnects for non-payment differently. KUD staff responsible for disconnecting service are often not given the authority to impose the necessary sanctions, particularly when it is the "power elite" who default. Once users learn that disconnects are not really going to be carried out, payment rates fall and the financial recovery worsens.

Table 1B. Summary Evaluation of Experiences in ASTAE Case Study Countries Financial Evaluation


Dominican Republic


Sri Lanka


Credit supply

Limited credit provided by NGO revolving funds; no commercial bank loans made; NGO loans offer below-market interest rates, will result in eventual depletion of funds.

Credit is supplied by the government-supported revolving fund; consumers pay a down payment and monthly installments for ten years at zero interest.

Very limited access to long-term credit. Bank credit offered at market rates, NGOs rely on revolving funds on-lent at concessional rates. Gov't programs require modest monthly payment.

Project established revolving fund to finance systems. Financing provided to RECs through National Electrification Administration.

Financial sustainability

Payments were generally good.

Full cost recovery was not an objective. Monthly payments comparable to basic utility services. Cooperatives had many inconsistencies in bookkeeping and collection practices. 60% average collection rate, despite low monthly installments.

High payment default rate for government programs until strict disconnect policy was enforced. Private sector and NGO programs had good cost recovery.

Full-cost recovery pricing strategy used except for initial seeding of revolving fund.

System pricing

Pricing could be reduced with greater competition.

Competition helped keep prices low.

High unit costs due to low volume sales and import tariffs. Unit costs were particularly high in gov't tied-aid program.

Program purchased solar home systems in bulk to lower prices.

Tax/subsidy structures

No duty on modules, 100% duty on deep-cycle batteries; import restrictions on solar PV components affected cost to customers.

No import tariff barriers. Fees exclude interest charges. Other organizational overhead costs absorbed by participating government agencies.

High import tariffs. Government program subsidized due to zero- interest financing.

Exempt from import taxes and VAT.

Table 1C. Summary Evaluation of Experiences in ASTAE Case Study Countries Technical Evaluation


Dominican Republic


Sri Lanka


System size selection

System sizes range from 25 to 48 Wp

Based on field tests. Mostly 45- to48-Wp systems.

Systems sizes included 18, 35, and 50 Wp

Used 53-Wp systems

System quality

Good performance No official standards set. Warranties honored by PV enterprises. Local auto batteries used.

Systems performed well. Warranty services offered by suppliers. System specification based on field tests. Local auto batteries performed well.

Private/NGO systems provided adequate service; No formal standards and specifications set. Local battery quality highly variable. Reliability problems plagued Gov't program.

Generally good when using imported components. Locally manufactured parts performed poorly.

Installation/ repair quality

Good installation and servicing skills.

Good installation procedures. Repairs usually involve part replacement rather than careful assessment of why the system failed.

Private sector/NGOs provided adequate installation and service. Gov't program lacked after sales service after first year, but improved after giving 5-year maintenance contract to private company.

REC technicians provided responsive and effective installation, repair and maintenance services.

Training/ maintenance

Enersol/ADESOL have effective program, which include training courses for technicians and entrepreneurs and monthly membership meetings.

No formal standards for maintaining systems. Had good consumer education program.

Private sector and NGOs had trained technicians and good consumer education programs. Poor communication led to user dissatisfaction with gov't program.

Effective training provided to NGOs. "Comic book" style user manuals proved effective.

Availability of spare parts

Available locally

Cooperatives did not stock many spare parts, led to long lead times for repair.

Spare parts not always available at local level.

Spare parts always available.

Battery recycling

No formal battery-recycling program.

No battery-recycling program was incorporated. But commercial battery recyclers operate in W. Java.

No formal recycling program. Current buy-back rates paid by battery recyclers too low.

Successful battery-recycling program was part of program.