Mid-Term Test

Name : DIONISIUS SUNDORO

NIM : 29117029

Surya Utama Nuansa

Company Profile
Surya Nuansa Utama (SUN) is a leading renewable energy technology company in Indonesia with a
focus on solar energy. SUN provides cutting-edge, integrated renewable energy solutions at
competitive prices. Our end-to-end customized solutions cover utility-scale, business solutions and
residential segments.

Background
The world attention to energy sources is leading to renewable energy / renewable energy business.
Governments in various parts of the world are busy encouraging the development of this industry.
Energy is one of three things (other than food and water) which are mondial concerns because of the
increasingly scarce availability factor (shortage).

Energy scarcity occurs because of the depletion of fossil energy sources such as coal, oil and natural
gas. This energy cannot be renewed, and later the costs for exploration and exploitation are also not
small. This is different from renewable energy. The prospect of renewable energy is very promising in
the long term. Moreover, this energy is believed not to damage the environment, so it can be the most
rational solution.

Indonesia has tremendous potential for renewable energy. As a tropical country, Indonesia has never
been covered in sunlight. This is a good provision for using solar-based renewable energy. According
to the 2015 International Energy Agency (IEA) report, Indonesia has around 1,200 GW of solar energy
potential. In other words, the use of solar energy is suitable for use in Indonesia. Active use of solar
energy is through the use of photovoltaic panels and heat absorbing panels.
To answer these challenges, Surya Utama Nuansa (SUN), a start-up company engaged in the field of
energy distribution, strives for easy access to renewable energy. SUN serves renewable energy
solutions, one of which is through solar energy with the latest technology and a management system
that adapts the consumer situation. By carrying out #gowithSUN, SUN is committed to providing
products that are affordable and have a social impact.

Providing for Housing, Industry and Government

SUN provides solutions for three main consumers, namely residential, industrial and government. For
residential consumers, SUN has 3 superior services, namely Pay-as-you-go (PAYG) which allows the
rental of products in a safe manner, Solar Kiosk to generate electricity for rural off-grid for various
purposes, and Solar Smart Home that allows consumers control and monitor home energy usage from
anywhere during internet connection.

For industrial consumers, SUN is ready to handle various projects for street lighting systems, urban
city lighting, and public open spaces. SUN lighting system minimizes existing technical and operational
costs; provide better light intensity, lower electricity consumption, longer battery life and ease of
maintenance through a remote monitoring system. And has used the latest technology with SNI
certification. Not to forget SUN provides a holistic energy management system.

SUN's solar panel system has also spread in several areas in Indonesia in order to support the
government in providing electricity supply to improve the local economy. By using the Solar PV Power
Plant system as a semiconductor material that can convert sunlight directly into electricity

365WithSUN Campaign

Not only active on the business side, SUN also invites people to be more familiar with renewable
energy, through the # 365WithSUN campaign. An annual campaign is held to raise awareness of
renewable energy solutions. 365 stands for the number of days a year, although this social campaign
will not stop after only one year.

In addition to providing more comprehensive information about renewable energy, it also encourages
people to participate in creating a better Indonesia with clean energy and even distribution of
electricity. Under the large tree 365withSUN, there are various kinds of smaller campaigns to reach its
main goal, which is divided into 3 pillars.

1) SUN Sharing. Invite to contribute funds for this movement. The company can contribute by
integrating its CSR into this campaign to provide electricity to the area to be targeted. 2) SUN Patriot.
Contribute yourself, by providing information related to renewable energy around the environment.
3) SUN Ambassador. Contribute to the network and the influence it has to increase awareness.

SUN hopes through the provision of quality products and disseminating an understanding of
renewable energy, creating a change towards sustainable energy that has a good impact on life.
Besides being able to save costs, also protect the environment from damage, and the most important
thing is to create a better world for children and grandchildren.
Existing Business Model Canvas
Key Partners Key Activities Value Customer Customer
- Indonesian Promotion Propositions Relationships Segments
government through the Future houses Personal Housings
- PLN awareness of with renewable assistance Middle class
renewable electricity energy Low class villages
energy use

Key Resources Channels

Photovoltaic Delivery
material
industries
Cost Structure Revenue Streams
Business Sales Sales of personal solar panels
Sponsors

The government supports to PV system

As a part of relief to the domestic solar power generators, Indonesian Government is soon going to
issue regulations regarding the rooftop solar pv systems in order to allow them to sell unused
electricity to Perusahaan Listrik Negara (PLN), Indonesian Government owned distribution
corporation.

Government Regulations on Rooftop Solar PV drafted by Indonesian Energy and Mineral Resources
Ministry (EMR) includes setting of power selling capacity to maximum of 90 percent and regulation of
electricity transactions on the basis of electricity tariff formula, subscription fees, and the average
electricity supply cost.

Energy and Mineral Resources Minister, Ignasius Jonan said, “The regulation will allow PLN’s
customers in all segment excluding industries to install rooftop solar panels. PLN customers in this
segment are estimated at two-thirds of total customers. The regulation will be issued in 1-2 weeks;
we will conduct a large-scale socialization.”

In addition, Jonan said, the regulation will allow solar panel users to sell the excess electricity to PLN
at certain regulated price. As a result, the consumers will gain savings with this scheme.

The country has set a target to achieve a 23 percent share of renewable energy in the country’s energy
mix by 2025 from the current share of about 13 percent. The government plans to build 14,912
megawatts of renewable energy by 2027.

Marketplaces

The conversion of solar energy into electricity is done either directly using photovoltaic (PV)
technology or indirectly using thermal technology as well as concentrated solar power (CSP). CSP
involves using mirrors or lenses to concentrate the solar energy and convert this into heat. The heat
is used to create steam, which drives a turbine to generate electricity.

Solar energy in Indonesia offers great potential to the renewable capacity. IRENA’s Roadmap for a
Renewable Energy Future (REmap) programme identified potential for 47 gigawatts (GW) of installed
capacity by 2030. This includes plans to use solar energy to provide electricity to nearly 1.1 million
households in remote areas that do not have electricity.

According to IRENA, solar energy is expected to be used on a significant scale by 2030 in three ways:
in utility-scale plants, on residential and commercial rooftops, and in off-grid settings for to replace
costly diesel-powered generation. It is assumed that this potential will be developed by 2030 through
efforts by the government and Perusahaan Listrik Negara (PLN).

Nevertheless, solar energy development in Indonesia is still limited. This is a far cry from the
Indonesian government’s expectation of achieving 6,500 MW solar energy development by 2025.

According to PricewaterhouseCoopers's (PwC) "Power in Indonesia, Investment and Taxation Guide

2016", there are challenges to solar energy development in Indonesia. These challenges include the
lack of appropriate regulatory support as well as the need for greater Government, investor and
stakeholder coordination on issues amongst others.

Deregulated Retail Energy

Retail energy providers are independent power producers who can sell generating services to
customers in deregulated energy markets. A hallmark of many retail energy providers is an easy, web-
based system that can help people shop for rates and plans, much like the solar online marketplaces.
In fact, in 2013 retail energy provider Choose Energy purchased Power2Switch, the leading
marketplace for comparing offerings from retail energy providers, and now operates that
marketplace.

Players like Ambit Energy, Direct Energy, Constellation Energy and many, others populate this space.
The companies named all have strategic partnerships with solar installation companies that offer
third-party ownership. For a retail energy company, it’s naturally a good fit as they are selling kWhs.
Why not partner with the side of solar that is also selling kWhs and provide a more comprehensive
offering?

How does SUN deal with this challenge to remain competitive? Should or
should they not accept the new technologies related to Industry 4.0 into their
business process (production, supply chain etc) to remain competitive? Why?
Renewable energy systems, are reducing the world’s dependence on fossil fuels, by drawing on the
free and constant energy sources of our world to provide your energy needs and enhance the
reliability that reduce power outages, which constantly place a burden on your home life and business
profits.

In developing countries, solar is the technology of the moment. India has thrown his hefty political
weight, and some money, into the development of an international solar alliance. China, already the
world’s largest solar producer, has added almost as much solar capacity in the first quarter of this year
as the total solar capacity of France. It’s penchant for vast large scale farms tipped the global balance
(once about 50/50) away from rooftop installations.

Even in the poorest countries, solar’s flexibility is making it desirable. In Bangladesh, more than 3.5m
solar home systems have been installed in rural villages. Across the world, 1.3 billion people live
without electricity. Often because the power grid does not extend to their home. As their economies
develop, solar power will flood into these countries as the cheapest, most independent way for people
to power their lives. The future of the sun looks bright.

Meanwhile in Indonesia, a national fuel subsidy cut announced by President Joko Widodo at the end
of 2014 brought optimism and high expectations for the growth of Indonesia’s renewable energy
sector, including solar energy.

PT Perusahaan Listrik Negara (Persero) (PLN), the state-owned utility company and primary off-taker
of electricity in Indonesia, revealed in its Electricity Business Plan 2017–2026 (known as the RUPTL)
that Indonesia plans to implement a program of “solar power plants for 1,000 islands/ locations”. This
program aims to develop solar photovoltaic (PV) power plants in remote islands and other locations
facing transmission line expansion or access issues or lacking transportation.

Under the RUPTL, the plan is to develop up to 5,000MW of solar power plants by 2025. Several
regulations have been issued on renewable energy for power plants, including solar energy, to help
accelerate private sector development of solar power plants. These regulations include Minister of
Energy and Mineral Resources (MEMR) Regulation No. 19 of 2016 on Purchase of Electricity from Solar
PV Power Plants by PLN (Regulation 19/2016) and MEMR Regulation No. 50 of 2017 on the Use of
Renewable Energy for Electricity Generation (Regulation 50/2017).

What are the considerations to adopt or now? What could be the challenges and obstacles in
adopting the new technologies?

According to UNIDO, Industry 4.0 could contribute to finding new ways of dealing with major global
challenges, such as climate change, lack of clean energy access, economic stagnation and reducing the
digital divide.

However, understanding the potential opportunities and also challenges that Industry 4.0 may pose
on countries with various levels of industrialization is necessary to outline the limits, barriers and risks
it may pose to inclusive and sustainable industrial development. For instance, industrial production is
undergoing a fundamental transformation. This process is informed by a vision where the physical
world of industrial production merges with the digital world of information technology – in other
words, the creation of a digitized and interconnected industrial production, also known as cyber-
physical systems. These new state-of-the-art technologies offer increased deployment of renewable
energy in manufacturing, reduced carbon emissions, optimized energy-use, heightened productivity
and cost savings at an unprecedented scale.

Solar Investment in Indonesia

The level of solar investment is still limited in Indonesia due to frequent changes in policy to support
renewable energy up-take such as of feed in tariff (FiT) rate. However, its future potential of using
solar is feasible if the government implement policies to support electrification ratio in faster way
rather than waiting the grid connected supply. Solar is cost competitive when compared to current
diesel power generation.

The development of solar project can be even faster with the participation of local government for
example in providing free land for the site of solar farm project. To optimise the development of solar
projects and ensure its sustainability, government support is needed such as tax incentive, availability
of low interest loan with longer tenor and streamlined licensing process. Good electricity tariff for
solar farm that considers the production cost and reasonable margin is also needed.

Do you think the innovation ecosystem in Indonesia is ready to support the

implementation of industry 4.0? Why?
Industry 4.0 introduces what has been called the “smart factory,” in which cyber-physical systems
monitor the physical processes of the factory and make decentralized decisions. The physical systems
become Internet of Things, communicating and cooperating both with each other and with humans
in real time via the wireless web.

For a factory or system to be considered Industry 4.0, it must include:

a. Interoperability — machines, devices, sensors and people that connect and communicate with
one another.
b. Information transparency — the systems create a virtual copy of the physical world through
sensor data in order to contextualize information.
c. Technical assistance — both the ability of the systems to support humans in making decisions
and solving problems and the ability to assist humans with tasks that are too difficult or unsafe
for humans.
d. Decentralized decision-making — the ability of cyber-physical systems to make simple
decisions on their own and become as autonomous as possible.

There are four strategies Indonesian government is preparing:

First, the government continues to work in Indonesia and continues to learn and improve the ability
to understand the use of internet technology or internet technology with production lines in the
industry.

Second, the use of digital technology to boost productivity and competitiveness for Small and Medium
Industries (IKM) so as to penetrate the export market through the IKM e-smart program. "IKM's e-
smart program is an effort to expand the market in the world value chain and face the Industrial 4.0
era.

Third, national industry is prepared to be able to use digital technologies such as Big Data,
Autonomous Robots, Cybersecurity, Cloud, and Augmented Reality. This 4.0 Industrial System will
provide benefits to the industry, such as increasing efficiency and reducing costs by around 12-15
percent.

Keempat, yang diperlukan adalah inovasi teknologi melalui pengembangan startup dengan
memfasilitasi tempat inkubasi bisnis. Upaya ini telah dilakukan Kementerian Perindustrian dengan
mendorong penciptaan wirausaha berbasis teknologi yang dihasilkan dari beberapa technopark yang
dibangun di beberapa wilayah di Indonesia, seperti di Bandung (Bandung Techno Park), Denpasar
(TohpaTI Center), Semarang (Incubator Business Center Semarang), Makassar (Makassar Techno Park-
Rumah Software Indonesia), dan Batam (Pusat Desain Ponsel).

Fourth, what is needed is technological innovation through startup development by facilitating

business incubation sites. This effort has been carried out by the Ministry of Industry by encouraging
the creation of technology-based entrepreneurs generated from several technoparks built in several
regions in Indonesia, such as in Bandung (Bandung Techno Park), Denpasar (TohpaTI Center),
Semarang (Incubator Business Center Semarang), Makassar ( Makassar Techno Park-Rumah Software
Indonesia), and Batam (Mobile Design Center).

Why Indonesia should consider PV energy?

Fossil fuel has been the motor behind our industrialization in the past 200 years. Having fuelled the
economic growth of the world, it has directly and indirectly improved our lives in many aspects.
However, one fact is certain: fossil fuel is not limitless. And it is also agreed by many that burning
fossil fuels is one of the main causes of global warming.

In addition, the U.S. Energy Information Administration (EIA) projected a 53% increase in energy
consumption from 2008 to 2035. With increasing energy demand, limited supply of fossil fuels and
the threat of the consequences from global warming, one thing certainly needed is an alternative way
of electricity generation that is safe and renewable.

Solar energy potential

One of the sources of renewable energy that receive more attention nowadays is the solar energy.

A plant that generate power from solar energy is known as Pembangkit Listrik Tenaga Surya (PLTS) in
Indonesian. The working principle is to expose a solar panel to sunlight to generate electricity. The
output generated is in a direct current (DC) form. To feed DC electricity into our current grid or a
building, we need an inverter to convert DC form to alternating current (AC) form. Other electronic
devices are also used to optimise the electricity generation. Once the solar panels are installed, there
is minimum maintenance such as cleaning the panels and it can continue to generate electricity for at
least 25 years.

This form of electricity generation is very suitable for country like Indonesia. There are four key points
that support this argument.

The first is that it has favourable climate conditions. It receives an almost constant and plentiful
sunlight amount throughout the year. This means that the electricity generation vary lesser within a
year making the output more predictable. The frequent rain could also help to wash some dust and
dirt that sediments on the solar panel glass.

Secondly, Indonesia is an archipelago country. Some remote islands still do not have access to
electricity. This off-grid deployment of solar energy to these islands could help to improve the
communities’ lives.

Solar energy can generate electricity during day time and store them in a battery. This electricity is
then used at night or when there is little sunlight. The off-grid system is normally combined with diesel
engine to mitigate the intermittence of solar power.

The third supporting point is that in the recent Paris Agreement, countries are committed to cutting
the carbon dioxide (CO2) gas emission. Achieving the CO2 emission target can be challenging without
having some form of renewable energy generation.

While there are many other options for the country such as wind, geothermal and tidal, these
technologies are generally location dependent. Solar power prefers area with minimum shading. Solar
power would be able ideal in area such as rural farm, commercial building in metropolitan city and
residential rooftops.

Finally, the job nature of solar panels installation is similar to the construction industry.

The strong solar energy growth in the future could create new jobs. A construction company can take
on more projects related to solar in additional to their routine jobs. New skills are needed and training
from suppliers could help to speed up the upgrade of the skills.

Indonesia can benefit and derive the greatest value from solar energy technology. Nonetheless, there
are other important factors that need to be considered. They are short-term and long-term energy
policy from the government, the financing of the projects, the quality control for building a quality
and reliable power generation. These topics deserved high attention and must be considered
throughout the implementation of the project to the reap the full benefits of this technology.

Business Model Innovations Proposals

Pay-As-You-Go Business Model to make PV Affordable for Low-Income Households

SUN does not sell its products directly to end-users and does not intend to develop its own distribution
channels. Hardware and service – in the form of top up codes – are sold to distribution partners in
developing countries. These distributors are usually locally based businesses that are well established
in the local market and have a distribution network reaching out to remote off-grid areas. The
distributors are responsible for installing systems, selling top ups and providing after-sales services in
their area of coverage. SUN provides them with detailed specifications on how systems should be
marketed and installed, the level of support to be provided and detailed reporting on the customer
behaviour. Distributors are also provided with distinctive brand guides for shops and advertising.

The cloud-based SUN database stores the details of each customer and their Indigo system. Each top
up sold to a distributor is recorded and the date of redemption and the system on which it is used is
automatically added to the database. Thus, both SUN head office and the local distributor can keep
track of customers, allowing problems (and irregularities) to be rapidly identified. SUN has spent a lot
of resources in the development of this administrative system, which is a crucial piece of infrastructure
required to manage large numbers of end-users.

The ownership of the hardware remains with SUN or the distributor, depending on the exact
commercial relationship between SUN and the distributor, until the systems have been permanently
unlocked. There is no loan agreement requiring customers to pay a certain number of installments,
but if a customer stops buying top ups this will be detected in the database and eventually the unit
will be taken away and redeployed.

From the viewpoint of an end-user, the top up system is similar to a hire purchase. After around eighty
installments they can permanently unlock and own the system without having any further payment
obligation. SUN, on the other hand, does not consider the business model as a retail of the hardware
but energy service provision, due to the ongoing customer management. The hardware is seen as
something which enables the service to be delivered. The payments made through the purchase of
the top ups do not only cover the costs of the hardware but also the costs of operating the system,
installation and after-sales services, as well as taxes and duties. Incomes and profits are generated
through a carefully designed margin structure on the top up sales allowing SUN and the distribution
channels to make enough money to make the business worthwhile. SUN emphasises that the business
model is for profit, not for profiteering. This is also the reason why they included the possibility to
unlock the system because they find it unethical to charge the people forever for energy provision
from a relatively small system.

PLTS Off-grid

Off Grid PLTS is also called PLTS Stand Alone, meaning that the system is only supplied by solar panels
without other types of plants such as PLTD. This type of system only depends on the sun completely.
Because the panel is unlikely to get continuous sunlight, especially at night, this system requires a
storage medium that is a battery. Off Grid PLTS is generally intended to elect highly isolated areas
where transportation is very difficult, so that if you build a PLTD, there will be difficulties in carrying
fuel.

Determining accurate panel and battery capacity is very important. In the Off Grid system, generally
the capacity of the battery is added to anticipate the day of no sunlight / cloudy days called days of
autonomy (DoA). Based on cost considerations, the capacity is added 1-2 times the period. In planning,
PV capacity must supply a minimum load at an average radiation level of 1 kW / m2 and
simultaneously, is able to charge the battery with the amount of energy needed in the discharge
period. When charging around peak sun hour (PSH) period, which is the duration of effective sun
exposure, in Indonesia around 3-4 hours / day. Panel capacity (kWp) must calculate the battery
efficiency round trip. Figure 3 is a basic diagram of Off Grid type PLTS.

PLTS On Grid

PLTS with On Grid configuration are intended for locations with electricity and the on-site system has
a daytime operating period. Called On Grid because PLTS is tied to the existing system. The purpose
of PLTS development is to reduce fuel consumption.

On Grid type PLTS is not equipped with a battery. In order for PLTS not to affect the stability of the
parent system, the capacity is limited to a maximum of 20% of the average daytime load. Inverters for
PLTS On Grid are also called On Grid Inverters. This type has the ability to release relationships
(islanding system) when the grid loses voltage.

Hybrid PLTS

Hybrid PLTS is a PLTS whose operation is combined with existing PLTD. In this system the PLTS is
expected to contribute optimally to supply the load during the day, so that the PLTS does not interfere
with the existing system, the PLTS must be equipped with a battery as a buffer or stabilizer. With the
existence of a battery, PV can provide power and energy to the load during the day period (hours of
sun) without the risk of the existing system being interrupted. The determination of panel capacity
must take into account the ability of the panel to charge the battery when supplying the load if the
solar radiation is above average.

This Hybrid PLTS system is intended to increase the operating hours / service of the existing system
and reduce fuel consumption.
Social Selling

There are a number of reasons that solar sales are so social, but two explanations standout.

1) Solar is a movement
When a business can turn product marketing into something that’s not just about selling
features and benefits, but rather into a cause that their target audience feels passionately
about, they can ignite a powerful word-of-mouth movement.
For solar marketers there is a large segment of the population that believes fervently in
alternative sources of clean, renewable energy, hoping they will free the country from
dependence on dirty coal that pollutes the skies and contributes to climate change. That
passion and conviction drives volunteers to carry the solar message, turning them into some
of the industry’s strongest sales reps.

2) Solar is a new and confusing method

While many homeowners may believe in the high-level benefits of clean, renewable energy,
they also need to learn about the intricacies of cost and payback periods and decide if
purchasing, leasing, or signing a power purchase agreement makes sense for them. They need
to make equipment choices and understand how net metering, utility rate plans, and tax
policies affect them. They then have to allow strangers to poke holes in their roofs and rewire
their electrical systems.
There are just so many new things to consider and such fear of making the wrong decision
that they often turn to their friends and neighbors to find out if their experience was positive
and whether the return in energy savings is worth all of the effort.

To maximize referrals, solar providers and solar lead generation companies are using a variety of
innovative strategies to build community awareness, empower influencers and boost
recommendations.

Homeowners often begin by evaluating a solar purchase in a very rational fashion. But by the time
they make the decision to purchase they become increasingly emotional, something he calls “rational
in, emotional out”. Consumers are most likely to share their experience at three points in time:

1) When they purchase

2) When their system is installed
3) When their system is connected to the utility grid

Make Solar Affordable

The biggest concern most people have about solar power is that it will cost a lot of money. To address
this, your solar sales and marketing need to make the financial advantages of solar clear. Providing
help with financing, solar leases, or power purchase agreements will reduce financial concerns, as well
as providing information and assistance with rebates and tax credits. The solar broker business model
for solar sales, getting competitive bids from multiple installers, ensures that clients are getting the
best price possible. Talking about how going solar pays off financially is an approach that a large
number of clients relate to.
Make Solar Optimistic

Solar power is inherently optimistic, a part of a better future that we can all help to build. Your
marketing can show how buying solar is a way we can all make a difference in the world, choosing
clean electricity by making our own. Talking about solar as a hope for the future also connects with
parents think about the positive step it means for their kids, a powerful motivation

Make Solar Patriotic

Patriotism can be a strong motivator for many, and buying solar is a positive step for our country,
moving us toward a clean and strong economy of the future, and away from polluting and costly fossil
fuels. Solar protects our country as well as protecting our environment. Showing the patriotic side of
solar patriotic in marketing can move thinking beyond blue states and red states to make solar sell in
every state regardless of its politics.

Make solar sexy

Sex sells they say, and it’s a time honored strategy for selling just about anything because it often
works. I’m surprised I haven’t seen more solar marketers try this – if bikinis, fun, and sun can’t sell
solar, then I don’t know what can. Except maybe the other six items on the list.

Make solar ordinary

A common preconception about solar is that it is strange and exotic. There will be a day when solar is
on every house but for now solar panels are still an unusual feature in many neighborhoods and not
everyone wants to be the first house on the block with solar panels. If your marketing features
pictures of every house having solar on it as the wave of the future will help more people get over the
idea that it is weird, and start to see how solar will become the norm, opening the door for more
people to buy solar.

Make solar simple

There’s a lot involved in buying solar. There are a large variety of installers, panels, inverters,
monitoring, financing, and maintenance that clients need to sort through, all of which can keep some
potential customers away from it, intimidated. The winning companies know how to make it all simple
for the client. The simpler it is, the less anxiety it will generate, and the broader the market will be

Make solar fun

Doom and gloom scenarios of a grim future are not the best way to convince most people to go green.
Quite the opposite – many people are driven away by talking about the scary future we could face.
Making solar fun and attractive in marketing for your solar company will attract customers to have
photovoltaic fun in the sun.