Renewable energy investment in Bali looks attractive, but “win big” is only realistic if you understand the real rules behind the marketing. Between tourism demand, grid limits, and land issues, copying a brochure model is the fastest way to lose capital.
Indonesia is overhauling its energy mix, and Bali is expected to shift faster than many other regions because of tourism’s sustainability pressure. To navigate this, serious investors should study the Ministry of Investment’s guidance on foreign investment before committing funds.
Yet most English content stays at the level of slogans. It rarely explains how PLN actually buys power, how rooftop projects differ from utility-scale sites, or what your PT PMA must look like to sign contracts. Without that clarity, even a strong technical project can stall for years.
You also need to read renewable energy policies from the Ministry of Energy and Mineral Resources, not just promotional decks. These documents show how Indonesia plans to cut coal dependence and expand clean capacity, which directly affects tariffs, incentives, and grid access.
This guide treats renewable energy investment in Bali like any serious cross-border project: start with strategy, then structure, then partners, then risk management. Along the way, we will flag common traps, from overpaying for land to signing one-sided EPC or PPA clauses.
By the end, you will understand the real levers that decide returns: tariff levels, capex discipline, local execution partners, and PLN’s appetite for your project type. You will also know where to track PLN’s renewable energy initiatives so that your Bali strategy stays aligned with Indonesia’s wider transition.
Table of Contents
- Bali’s Net Zero 2045 Roadmap and Macro Potential
- Foreign Ownership Rules for Energy Generation
- Rooftop Solar Opportunities in the Tourism Sector
- Licensing Procedures under MEMR Regulation 2025
- Real Story: Wanner’s Green Transition in Sidemen
- Fiscal Incentives: Income Tax Deductions and VAT
- Visa Pathways for International Energy Investors
- Mitigating Regulatory and Environmental Risks
- FAQs about Renewable Energy Investment
Bali’s Net Zero 2045 Roadmap and Macro Potential
Bali is currently positioned as the flagship province for Indonesia’s national energy transition. The provincial government has established a clear 100% renewable-electricity roadmap to be achieved by 2045, identifying a massive 22.04 GW of potential across the island.
The majority of this potential, approximately 21 GW, is concentrated in solar power, with significant contributions from wind (515 MW) and geothermal (127 MW) sources.
This roadmap is designed to meet a projected electricity demand of 44.71 TWh by the target year, making the island a prime candidate for a renewable energy investment.
The first phase of this transition, spanning 2025 to 2029, targets the deployment of 1.5 GW of new renewables, including solar, biomass, and mini-hydro projects. This initial stage requires an estimated investment of USD 5.8 billion and aims to cut 2.8 million tCO2e of emissions.
For investors, this provincial ambition is backed by national policy that seeks to reach net-zero by 2060.
Because Bali is singled out as Indonesia’s first 100% renewable province, early movers who align their projects with these government targets can benefit from a policy wave that actively facilitates private capital entry into the local power mix.
Foreign Ownership Rules for Energy Generation
The regulatory environment for power generation has become significantly more attractive for international capital in 2026. Current Indonesian regulations allow up to 100% foreign ownership for renewable energy generation projects above 1 MW in capacity.
This openness extends across the entire value chain, including transmission, distribution, and sales lines. To participate, investors must establish a foreign investment company, known as a PT PMA, which serves as the legal vehicle for all project development, permitting, and commercial operations.
Establishing a PT PMA for energy projects requires a minimum issued and paid-up capital of IDR 10 billion (approximately USD 650,000). This capital threshold is strictly enforced by the OSS Indonesia system and applies per 5-digit KBLI (business line) code.
It is important to note that while the generation itself allows for total foreign control, specific sub-sectors or blended business models—such as those mixing energy services with tourism hospitality—must be analyzed carefully.
The treatment of these hybrid models is not uniformly applied across all regencies, requiring a precise legal setup from the outset.
Rooftop Solar Opportunities in the Tourism Sector
Rooftop solar, or PLTS Atap, represents the most immediate opportunity for distributed energy projects in Bali. The provincial solar-PV roadmap identifies a target of 108 MW for rooftop solar by the end of 2025, with a massive potential area across tourism facilities and public buildings.
For owners of large-scale villa complexes and boutique resorts, installing these systems is no longer just an environmental statement; it is a financial necessity to hedge against rising utility tariffs and meet the growing demand from eco-conscious travelers who prioritize a renewable energy investment as part of their stay.
Foreign investors typically participate in the small-scale market by taking equity in a PT PMA that installs, owns, and maintains solar systems on commercial or industrial (C&I) roofs. These “behind-the-meter” structures allow the company to sell power directly to the end-user, such as a shopping mall or hotel, under long-term lease agreements.
However, investors must stay updated on PLN (national utility) net-metering rules and export limits. Parameters regarding compensation have not yet been consolidated into a single, static regulation, making real-time compliance checks a vital part of your operational strategy.
Licensing Procedures under MEMR Regulation 2025
The development of energy projects in Bali is governed by several key national instruments that standardize risk allocation.
MEMR Regulation No. 5 of 2025 provides the essential guidelines for Power Purchase Agreements (PPAs) between the national utility, PLN, and Independent Power Producers (IPPs).
This regulation is critical as it standardizes tariff mechanisms and risk sharing for solar, wind, and biomass projects. Furthermore, MEMR Regulation No. 10 of 2025 requires detailed feasibility studies and funding plans, ensuring that every new project is technically and financially sound.
For project developers, the licensing sequence begins with resource assessment and land securing. For ground-mounted solar or wind farms, you must obtain land titles or long-term leases and confirm that the site aligns with the KKPR (spatial planning) approvals.
If you are developing rooftop systems, the building must have a valid PBG (Building Approval) and SLF (Certificate of Feasibility) to ensure the installation is on a legally compliant structure.
The permitting cycle often involves environmental assessments (AMDAL or UKL-UPL) and grid-connection studies, which are mandatory steps for a successful renewable energy investment before a PPA can be negotiated.
Real Story: Wanner’s Green Transition in Sidemen
Meet Wanner van der Berg, a 38-year-old eco-entrepreneur from the Netherlands who moved to Sidemen, Karangasem, in late 2023. Wanner had built a stunning bamboo retreat nestled among the rice terraces, but he faced a persistent challenge: the local grid was prone to fluctuations that damaged his high-end appliances.
He realized that relying solely on PLN was a risk to his business reputation, especially as the mountain humidity made consistent power essential for guest comfort. The sound of the rolling river in the valley was peaceful, but the frequent power cuts were anything but.
Wanner struggled initially with the complexity of importing specialized lithium-ion batteries and finding a contractor who understood the steep Karangasem terrain. He realized that a “backyard” DIY approach would not suffice for the scale of his retreat.
While enjoying the local pace of life in Sidemen, Wanner spent his afternoons coordinating with engineers to finalize the installation of his 50 kWp hybrid solar system. He spent his breaks at a nearby warung, enjoying “Sate Lilit” while his legal team at VisaBaliPro restructured his business as a PT PMA to legally import equipment under duty exemptions.
The transition transformed his retreat into a self-sustaining sanctuary. Not only did Wanner eliminate his grid stability issues, but he also successfully marketed his resort as a 100% green facility, leading to a 30% increase in bookings from German and Nordic travelers.
By navigating the MEMR licensing process professionally, Wanner turned his operational hurdle into a competitive advantage. His story serves as a testament that a structured renewable energy investment can pay dividends for years while contributing directly to Bali’s provincial green goals and your own long-term ROI.
Fiscal Incentives: Income Tax Deductions and VAT
To accelerate the energy transition, the Indonesian government offers a robust package of fiscal incentives under Government Regulation No. 78/2019.
Investors in the renewable sector are eligible for an income-tax deduction of up to 30% of their total investment value, spread over six years.
This is a significant lever for improving the internal rate of return (IRR) on capital-intensive projects. Additionally, projects can benefit from accelerated depreciation of assets and an extended loss carry-forward period of up to ten years, providing a substantial tax cushion during the early stages of operation.
For utility-scale projects, further relief is available in the form of import-duty and VAT exemptions for capital goods and machinery. These exemptions, underpinned by Ministry of Finance regulations, are designed to lower the entry barriers for high-tech equipment like advanced wind turbines.
It is important to note that while these incentives are codified, their application is not automatic. Project-specific eligibility must be verified and granted through a formal application to the tax authorities, and certain conditions for VAT relief remain subject to case-by-case evaluation.
Aligning your renewable energy investment with these incentives is essential for achieving a winning financial model.
Visa Pathways for International Energy Investors
Managing a project in the energy sector requires a legal residency status that allows you to act as a director or commissioner of your PT PMA. The Investor KITAS is the most common pathway, directly linked to your shareholding in the company.
To qualify, the investor’s individual investment valuation must usually meet a threshold of IDR 10 billion per KBLI.
This visa grants the holder the right to stay and manage the investment for up to two years per issuance, with easy renewals, making it ideal for operational developers who need to be on the ground in Bali.
For high-net-worth individuals who may take a more passive role, the Second Home Visa offers a 5- or 10-year residency option. This visa requires proof of specified funds—typically a bank deposit of approximately IDR 2 billion—or the ownership of qualifying property assets.
While the Second Home Visa does not authorize the holder to work as a local employee, it is a perfect fit for owners who live in Bali while overseeing their renewable energy investment through local management teams.
Recently, the Golden Visa has also been introduced for even larger contributors, though specific minimums for the energy sub-sector should be verified with the latest immigration updates.
Mitigating Regulatory and Environmental Risks
Every project in a developing market carries a set of risks that must be managed through careful structuring. Regulatory risk is the most prominent, as changes in national tariffs or grid-access rules can significantly alter a project’s economics.
To mitigate this, developers must ensure their PPAs are structured strictly under the latest MEMR guidelines and include clauses for regulatory change protection. Furthermore, starting construction before obtaining all necessary spatial (KKPR) and environmental (UKL-UPL) approvals can lead to stop-work orders or “stranded assets” that are impossible to commission for your renewable energy investment.
Land and ESG (Environmental, Social, and Governance) risks are also critical in the Balinese context.
Poor land acquisition practices or a failure to consult with local village communities (Banjar) can lead to social friction and permitting delays. Bali’s Net Zero roadmap explicitly emphasizes the need for community participation.
For any project to be truly successful, it must be inclusive. Projects that claim “green” status but ignore local cultural constraints or lack robust measurement and verification (MRV) systems risk reputational damage and may be excluded from high-integrity carbon credit markets or green financing.
FAQs about Renewable Energy Investment
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Can a foreigner own 100% of a solar farm in Bali?
Yes, for projects over 1 MW, Indonesian law allows 100% foreign ownership via a PT PMA, providing unique flexibility for your renewable energy investment.
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What is the minimum capital required for a renewable energy PT PMA?
The minimum issued and paid-up capital is IDR 10 billion, which aligns with BKPM requirements for foreign investment companies in Indonesia.
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Are there tax breaks for green projects in 2026?
Yes, under GR 78/2019, investors can receive a 30% income tax deduction over six years, accelerated depreciation, and potential import duty exemptions for capital goods.
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Do I need a special visa to manage my energy company in Bali?
Most operational investors use an Investor KITAS, which is linked to their company shareholding and allows for long-term residency and management rights.
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Is rooftop solar mandatory for hotels in Bali?
While not currently a universal mandate, the provincial roadmap recommends mass deployment, and many green building certifications now require solar integration.
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Can I sell electricity back to the grid in Bali?
This depends on current PLN net-metering regulations and grid capacity; the exact export limits and compensation rates are subject to local grid stability and current MEMR policies.
