Liga Asuransi – In recent years, Medan has begun to gain attention on the national energy transition map. Sumatra’s largest city is not only a center of trade and logistics, but is now also a major hub for renewable energy development, particularly solar power plants (PLTS).
With its strategic geographic location and high solar radiation intensity, Medan has significant solar energy potential for household, commercial, and industrial needs. Furthermore, central and regional government initiatives to promote the use of clean energy—through regulations, simplified permitting, and various incentives—are driving the growth of solar power plants (PLTS) projects even more rapidly.
The energy transition issue is no longer just buzzwords. Amidst the increasing demand for electricity in industrial areas in North Sumatra and the growth of urban settlements, solar power plants (PLTS) are a real solution to support a reliable, efficient, and environmentally friendly electricity supply. Many EPC players, developers, and local entrepreneurs are beginning to see this potential as a long-term investment opportunity.
This article will discuss in depth:
- How the PLTS movement in Medan has become a pioneer in Sumatra’s energy transition,
- Strategic projects and their economic opportunities,
- Risks and challenges that need to be anticipated,
- As well as the important role of insurance protection in maintaining the sustainability of renewable energy projects.
Don’t miss this major opportunity. For those in the energy, property, and industrial sectors—Medan is the next stage for building Indonesia’s green energy future.
To protect your energy project, discuss your insurance needs with L&G Insurance Broker, a specialist in energy and infrastructure project protection. Contact us at (021) 3972 3939 or visit www.lngrisk.co.id
The development of solar power plants in Medan and North Sumatra
The development of solar energy in Medan and North Sumatra over the past two years has shown a very positive trend. This region is starting to become a magnet for renewable energy players, both domestic and international. One key factor is the availability of relatively high solar radiation, with an average potential of 4.8–5.2 kWh/m² per day, making it ideal for the development of rooftop and utility-scale solar power plants.
The local government is also increasingly promoting the use of clean energy through various policies and programs. One example is support for rooftop solar power plants (PV) for commercial and residential buildings, which are now increasingly visible in industrial areas, offices, and residential properties around Medan. Several local businesses have begun installing solar panels to reduce their dependence on PLN electricity and lower operational costs.
In addition to the residential sector, the industrial sector in the Sei Mangkei Special Economic Zone (SEZ) and the Belawan port area has also begun adopting solar power systems to support sustainable operations. This move aligns with the government’s commitment to achieving the 2060 Net Zero Emission target and reducing greenhouse gas emissions as stipulated in the Paris Agreement.
Some medium-scale solar power plants (PLTS) projects are even being designed to supply energy directly to industrial areas, creating a new business model that brings together renewable energy investors and large industrial consumers. This trend is predicted to continue to grow, especially as the government begins providing various fiscal incentives and investment facilitation for the green energy sector.
Equally important, the people of Medan—known for their adaptability to technological change—are beginning to see solar power plants not just as an alternative, but as the primary solution for securing a stable electricity supply, especially amidst the challenges of electricity infrastructure in Sumatra.
This momentum is a strong signal that Medan is transforming into Sumatra’s clean energy pioneer, and anyone involved in this sector—whether EPC, developer, or investor—is now at the starting point of significant momentum.
Economic Opportunities & Investment in Solar Power Plants in Medan and North Sumatra
Medan, as the largest city on the island of Sumatra, has strategic potential to develop into a solar energy hub in western Indonesia. Several factors support the fact that solar power plants are not just a technical solution, but a viable business opportunity:
National Supporting Data
According to PLN Statistics 2023, the installed capacity of national power plants reached 45,095.19 MW, but the share of solar, wind, and biomass power plants is still very small—only around 33.32 MW (0.04%) of the total national capacity. PT PLN (Persero)
This means there is still huge room for renewable energy capacity expansion, especially outside Java.
High Energy Demand & Electricity Costs
In North Sumatra, electricity tariff increases are a frequent public concern. Interestingly, for the July–September 2025 quarter, the government decided not to increase electricity tariffs per kWh as part of its policy to maintain economic stability.
This policy shows that electricity load is a sensitive factor in the local economy and that pressure on the electricity sector could be an opportunity for the entry of alternative energy such as solar power plants.
Market Potential & Segments
Industrial Sector & Industrial Estate
Industrial areas in Medan and its surrounding areas require large volumes of electricity with a stable supply. By installing rooftop solar panels or a hybrid system (solar + grid), they can reduce electricity costs and increase business margins.
Large-Scale Commercial & Residential Buildings
Office buildings, malls, hotels, and mid- to high-end housing are increasingly emphasizing green building and energy efficiency. The adoption of solar panels is becoming a major draw for tenants and buyers.
Rural Areas & Remote Regions
Several areas in Sumatra that are not yet optimally electrified can use micro-scale solar power plants to provide local electricity access, opening up investment opportunities in community solar projects.
Promising Business Model
Business to Business (B2B): Sales of solar electricity to local industrial/commercial tenants through medium-term contracts (PPAs).
OPEX / Panel Rental Scheme: For entrepreneurs who do not want a large initial capital, they can rent panels or solar power systems from providers, and pay based on consumption.
Storage Technology Integration (Battery + Solar): To make the system more stable and able to function at night, adding a battery can increase the value of the project.
Advantages of Solar Investment in Medan
- Solar radiation is relatively stable and quite high.
- Politically hampered electricity tariff increases → provide profitable space for alternatives such as solar energy.
- National regulatory incentives & energy transition agenda — opportunities for local government partnerships are increasingly open.
- Long-term potential: the solar power project in Medan could be a showcase for other provinces in Sumatra.
If you’d like, I can add examples of solar power plants (PLTS) projects in Medan or North Sumatra that are already underway or announced, to make this section more concrete and credible. Would you like me to find and insert them?
Real Case Study of Solar Power Plants in Medan
To make the discussion more concrete and credible, it’s important to include real-life examples of solar power projects in Medan/North Sumatra. Several completed projects illustrate what’s happened (and what lessons can be learned) for industry players.
Bungasari Factory Rooftop Solar Power Plant
One of the largest and most talked-about rooftop solar power projects in Sumatra is at the Bungasari Flour Mills plant in Medan. With a capacity of 2.4 MWp, this project is one of the largest industrial-scale rooftop solar power plants in North Sumatra.
With this project, Bungasari estimates electricity savings of up to Rp 3 billion per year. The clean electricity generated is equivalent to reducing approximately 68,668 tons of CO₂ per year, and is sufficient to supply the electricity consumption of approximately 46,969 homes.
This case provides several important insights:
- The capacity of industrial-scale solar power plants can reach megawatt levels.
- This project shows that economic efficiency can be achieved: cost savings + green reputation.
However, the challenge is certainly in the risk protection aspect — if a panel or inverter is damaged, the consequences can be significant.
Rooftop Solar Power Plant at Medan Station (KAI North Sumatra)
Recently, PT Kereta Api Indonesia (KAI) Regional Division I North Sumatra installed a 40 kWp rooftop solar power plant at Medan Station as a form of support for green energy and ESG implementation. Antara News North Sumatra
The solar power system is configured on-grid, meaning electricity from the panels goes directly into the grid when production exceeds the station’s consumption. In unfavorable weather conditions, the electricity supply is still supported by the PLN grid. Antara News North Sumatra
While small-scale compared to industrial plants, this project demonstrates that even transportation and public utility agencies are beginning to recognize the importance of solar power plants in their agendas.
UHN Medan Campus Solar Power Plant
Previously, the Medan City Government and HKBP Nommensen University (UHN) inaugurated a 618 kWp rooftop solar power plant project on the UHN Medan campus. portal.pemkomedan.go.id
This project is not only intended to meet the institution’s electricity needs but also serves as a laboratory/education center for renewable energy in the North Sumatra region. Thus, the campus is not only a user but also a knowledge hub that can produce technicians and stakeholders who understand solar technology. portal.pemkomedan.go.id+1
By including real-life cases like the ones above, the article becomes more “lively” and has high application value for readers — especially EPCs, developers, and investors who are looking for evidence that solar power plants can be successful in local areas.
Challenges and Importance of Insurance Protection for Solar Power Plant Projects in Medan
Despite the rapid growth of solar power plants (PLTS) in Medan, industry players must not ignore the specific risks associated with solar energy projects. EPCs, developers, and property owners must understand that significant investments in solar power plants require comprehensive protection, particularly through appropriate insurance schemes.
- Risk of Physical Damage and Extreme Weather
Medan is an area with high rainfall intensity and significant potential for lightning. Solar panels on factory roofs, commercial buildings, or homes are exposed to the following risks:
- Heavy rain and standing water can damage the inverter.
- A lightning strike or power surge can destroy a panel in seconds.
- Strong winds can shift or damage the mounting structure.
Without proper protection, a single incident can cause losses of hundreds of millions of rupiah, especially if the system has a large capacity.
- Risk of Fire and Technology Failure
Solar power plants rely on high-voltage electrical systems that, if not properly managed, can become a source of short circuits or fires. Short circuits from DC cable connections or overheating inverters are common, especially in rooftop installations on older buildings.
In the event of a fire, damage extends beyond the panels—it also damages the building’s roof, production facilities, and inventory. Without insurance, recovery can take a long time and disrupt business operations.
- Risk of Production & Income Disruption
For large industrial players, disruptions to solar power plant operations directly impact cash flow and energy savings. If the system stops producing due to damage, potential electricity savings are lost.
Comprehensive solar power project insurance can cover Business Interruption (BI) so that losses due to downtime remain protected.
- Contractual & Regulatory Risks
As the number of industrial solar power projects increases, EPC contracts and Power Purchase Agreements (PPAs) are becoming increasingly complex. Many agreements now require the EPC or developer to provide proof of project insurance before construction begins or the system is handed over to the client.
In addition, ESDM regulations encourage the expansion of national solar power plant capacity, meaning new projects will continue to emerge — all requiring professional protection standards.
Conclusion: It’s Time for Medan’s Industry Players to Move Smartly
The development of solar power plants (PLTS) in Medan is no longer just a green trend—it’s a strategic step toward energy efficiency and industrial independence. With its high solar radiation potential and government policy support for a clean energy transition, Medan has a golden opportunity to become a renewable energy hub in the Sumatra region.
However, with significant opportunities come increased risks. Extreme weather events, system failures, fires, and even contractual obligations can threaten project continuity. Unfortunately, many business owners still view solar power plant project insurance as an optional extra, when it should be a core component of their risk mitigation strategy.
Imagine if a project worth billions of rupiah were to shut down simply because of a short circuit in the inverter or a major storm. Without insurance coverage, such a loss could disrupt the company’s cash flow and damage its reputation. Conversely, with the right protection, the project could recover quickly without burdening the company’s finances.
Don’t wait for an incident to occur to act. Start with protection from the very beginning of the project:
- Free consultation to determine the best insurance scheme
- Comprehensive protection for EPCs, developers, industry and households
- Supported by trusted insurance companies and international networks
Conclusion & Recommendations
The development of solar power plants in Medan demonstrates significant potential for a clean energy transition and industrial independence in Sumatra. These solar projects not only support energy efficiency but also open up new economic opportunities for industrial players, EPCs, developers, and households seeking to utilize renewable energy.
However, with significant opportunities come significant risks. Extreme weather events, equipment failures, installation errors, and contractual obligations can all lead to significant financial losses if not properly managed. Therefore, solar power plant project insurance is a crucial component for protecting investments, ensuring project continuity, and ensuring smooth and uninterrupted operations.
Recommended steps:
- Comprehensive project risk evaluation from the planning to operational stages.
- Choose a comprehensive insurance scheme that covers construction risks, operational disruptions, and third-party liability.
- Engage an experienced insurance broker like L&G Insurance Broker to ensure coverage suits your project characteristics and business needs.
- Conduct regular monitoring and updates on insurance policies as solar projects and technologies develop.
With this approach, your solar power plant project will not only be safer, but also more efficient, sustainable, and ready to face future energy challenges. With the right safeguards, industry players can focus on clean energy development without worrying about unforeseen risks that could harm their finances or reputation.
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Protecting projects from the outset is a smart investment that ensures sustainability, stability, and long-term success for every player in the renewable energy industry in Medan. ☀️
