In Q1 of 2025, the Investment and One-Stop Integrated Service Agency (DPMPTSP) recorded investments of IDR 4.33 trillion in the renewable energy sector by 25 businesses. This positive trend is occurring despite the dominance of labour-intensive sectors such as textiles, apparel, and footwear in Central Java. As explained by the Head of DPMPTSP Central Java, Sakina Rosellasari, the region's appeal as an investment destination is influenced by the presence of a substantial workforce and competitive wage levels. While labour-intensive sectors continue to dominate, there is a discernible shift towards more environmentally friendly industries. Investments in the renewable energy sector, including solar panels, batteries, and electric vehicles, are showing promising growth.
Sakina revealed that the use of solar panels by companies in Central Java is increasing. At present, 21 companies are using solar panels with a capacity in excess of 500 kilowatts, while 60 other companies are using capacity below 50 megawatts. This is an encouraging sign that companies are beginning to transition to renewable energy sources as part of their operations. The Central Java Provincial Government offers incentives in the form of tax relief for businesses that invest domestically (PMDN) in the renewable energy sector. These incentives include surface water taxes and Vehicle Registration Fees (BPNKB). The use of renewable energy is a key requirement for companies seeking these incentives. In the event that a company fails to meet the specified criteria, the relevant incentives will be revoked. However, challenges persist, particularly among medium-sized PMDN industry players, who have yet to fully adopt renewable energy. Meanwhile, foreign direct investment (PMA) with an export orientation is required to use renewable energy as part of their operations.
