Crucially however, tenders are to be awarded in part based on the lowest bid tariff submitted. Given that bidders will be driven to offer as low a tariff as possible to win the tender, it remains to be seen whether projects using more than 40% local content will in fact be able to take advantage of the higher feed-in-tariff ceiling. As highlighted in a Baker & McKenzie report, early discussions with the Directorate General of Renewable Energy and Energy Conservation suggest that tariffs will be adjusted by up to $0.05 USD per kWh in circumstances where competing tender bids are submitted by a bidder who meets local content requirements and another who does not. As an example, a bid tariff submitted by the former at the ceiling of $0.30 USD per kWh is to be viewed as equivalent to a $0.25 USD per kWh tariff when competing against lower bids from companies not meeting local content requirements.
In any case, the uncertainty surrounding the formal implementation of this policy hints at the untested nature of programs governing the sale of PV power to PLN and could see a delay of any boon to local manufacturers hoping to supply new solar power projects.