239 factories drive Bangladesh's rooftop solar capacity to 667MW: IEEFA
While government data puts installed rooftop solar capacity at 418MW, the IEEFA estimates the actual figure has reached 667MW across 239 major industrial facilities. Including smaller installations, total capacity could be as high as 1,000MW.
Highlights:
- Bangladesh's rooftop solar capacity has reached 667MW across 239 industrial facilities
- Total rooftop solar capacity could be as high as 1,000MW, IEEFA estimates
- Higher grid electricity tariffs are accelerating industrial investment in rooftop solar
- Replacing one-third of diesel pumps could save $244m annually in imports
- IEEFA urges tax cuts, faster grid approvals to accelerate rooftop solar growth
Rooftop solar power is expanding rapidly across Bangladesh's factories and commercial establishments, helping ease daytime electricity demand, according to a report by the Institute for Energy Economics and Financial Analysis (IEEFA) published today (4 August).
While official government data puts installed rooftop solar capacity at 418 megawatts (MW), the IEEFA estimates the actual figure has reached 667MW across 239 major industrial facilities.
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Including smaller installations, total capacity could be as high as 1,000MW.
Rising grid electricity tariffs are driving businesses to invest in rooftop solar, which offers a lower-cost source of electricity over the long term.
The report, which also examines developments in India and Australia, says decentralised clean energy systems can significantly reduce dependence on expensive fossil fuels.
Rather than relying solely on large power plants and extensive transmission networks, countries are increasingly adopting distributed energy resources (DERs) – small-scale clean energy systems such as rooftop solar panels and solar-powered irrigation pumps that generate electricity close to where it is consumed.
In Bangladesh, where agriculture relies heavily on diesel-powered irrigation, replacing just one-third of diesel pumps with solar-powered systems could save about $244 million (around Tk3,000 crore) annually in diesel import costs, the report says.
However, policy and regulatory barriers continue to constrain the sector's growth.
Although Bangladesh previously waived import duties on solar equipment, recent tax changes have increased the effective tax burden on industrial rooftop solar projects from 1% to 17%, comprising 15% VAT and 2% advance tax, raising project costs and potentially slowing further investment.
The IEEFA also says connecting rooftop solar systems to the grid under the net metering system often takes far longer than the targeted 10 to 15 days, frustrating investors.
The newly elected BNP government has set a target of adding 10,450MW of renewable energy capacity by 2030, with over half (5,500MW) expected to come from rooftop solar.
To achieve this goal, the IEEFA recommends eliminating import duties on solar equipment to reduce installation costs, accelerating grid connection approvals by monitoring application delays online and deploying battery storage and smart meters to help utilities integrate solar power more efficiently.
