Budget does not clearly address inefficiencies in the power sector

Expectations from this budget were high, especially for the energy sector. 

Bangladesh is heavily affected whenever there is disruption in the international energy market, leading to load-shedding, rationing, and wider economic pressure. Reducing import dependence is therefore essential.

The budget takes positive steps by promoting renewable energy, particularly rooftop solar. Import duties on solar panels, inverters, accessories, and battery energy storage have been removed. This could reduce capital costs by 25–30%, making rooftop solar more attractive for homes, industries, and commercial buildings. Battery storage will also help industries use solar power during evening peak hours, when electricity costs are high.

If rooftop and decentralised solar expand quickly, Bangladesh could reduce dependence on expensive oil-based power plants. Even small-scale solar installations across villages could add significant capacity within a year. 

Pakistan's solar boom shows how renewable growth can reduce LNG imports, and Bangladesh may see a smaller but useful version of that.

The budget also gives some incentives for electric vehicles. 

EV import duty has been reduced, and charging equipment duty has been removed. This suggests the government wants to build charging infrastructure first. If electric buses and trucks gradually expand, diesel imports could fall significantly.

However, implementation remains a major challenge. Net metering connections for rooftop solar are often delayed despite guidelines saying they should be approved within 10–15 days. 

Distribution utilities must reduce this backlog. Quality control is also critical, because many older rooftop solar systems became ineffective due to poor installation and lack of grid connection. 

Sustainable and Renewable Energy Development Authority (SREDA) and Bangladesh Standards and Testing Institution (BSTI) need to ensure standards and remove low-quality service providers from approved lists.

The budget does not clearly address corruption, mismanagement, or structural inefficiencies in the power sector. 

Even after tariff adjustments, subsidies may remain around Tk41,000 crore, placing a heavy burden for the government. Costs must be reduced through lower transmission and distribution losses, replacing expensive oil-based generation with renewables, and improving overall system efficiency.

Reliable electricity supply is also essential. 

Industries still depend on captive generators because grid power is not always uninterrupted. Grid modernisation and distribution upgrades are needed to help industries rely more on grid electricity. This would reduce pressure from capacity payments and help contain future tariff hikes. 

The energy sector's crisis comes from long-term policy mistakes, excessive import dependence, and weak accountability. 

Bangladesh assumed it could import enough energy as the economy grew, but that proved wrong. Import dependence in primary energy has risen sharply in recent years, making the sector vulnerable.

The budget's renewable energy incentives are a good step, but one measure alone will not make the sector sustainable. Bangladesh needs a full ecosystem: more renewables, reliable grid power, reduced losses, better governance, and investment in domestic gas exploration. The allocation for gas drilling appears insufficient, even though lack of domestic exploration has increased LNG dependence.

Bangladesh has spent billions of dollars on LNG imports. 

If part of that money had been invested earlier in domestic gas production, the situation could have been different. This budget shows some effort to move away from past mistakes, but stronger implementation and long-term planning are essential.

Shafiqul Alam spoke with TBS Executive Editor Shakhawat Liton.