Renewable Energy Technologies for Economic Development

Indonesian villages are facing dangerous condition. Every year, young people are deserting the villages. To overcome this problem, Tangsi Jaya hamlet, West Java, has been provided with 18 kW micro-hydro to supply electricity both to the community and to Small Processing Center for ground coffee production. Results of cash flow analysis for ground coffee in Tangsi Jaya hamlet, with total investment of IDR 110 750 000 and discount rate of 18 % for 5 yr. Banyumeneng I hamlet, Yogyakarta with an investment cost IDR 95 000 000 and production cost of IDR 34 195 000 yr –1 and the interest rate of 14 % yr –1 , the payback period was estimated to be 3 yr with ROI of 40 %. PEST analysics indicate that the higher electricity tariff and interest rate while the higher the value of technology and number of people involve with the SPC will result in the bigger value of ROI. Renewable energy technology could be used for value added activities in rural areas, create small industries, provide job opportunities to the local people and create conditions for sustainable economic development. However, vigilance is needed because small industries can also cause pollution because they produce waste