Can Bangladesh really deliver 10,000MW solar in 5yrs?

In response to an unprecedented energy crisis, the government has announced an ambitious plan to generate 10,000MW of solar power within five years, by 2030. The goal is timely and necessary. But ambition alone will not deliver results.

Bangladesh's recent record shows that targets, however well-intentioned, often fall short due to weak policy execution, financing constraints, and systemic barriers. The failure to meet the earlier target of 3,000MW of rooftop solar by December 2025 is a clear reminder of this.

If these underlying challenges are not addressed, the 10,000MW target risks becoming yet another missed opportunity. The consequences of failure would be severe. Bangladesh could face a worsening energy crisis in the coming years, driven by global instability, rising import costs, and declining domestic energy resources.

At the heart of the problem is a structural weakness: Bangladesh's heavy dependence on imported fuels. Reliance on imported LNG, oil, and coal has already created growing financial pressure.

If this trend continues, the next five years could bring not only an energy crisis but also a broader economic one. It is time to phase out fossil fuels and accelerate a decisive shift to renewable energy, especially solar. This is now an urgent necessity.

A system under strain

Bangladesh's current energy crisis is not a single, simple problem. It is complex, structural, and closely linked to the country's economic stability. Daily gas shortages exceed 2,000mmcfd, while peak electricity deficits are around 2,000MW.

Energy subsidies have risen to more than Tk 200 crore per day, and annual fuel import costs stand between $12 billion and $15 billion. These are not just numbers; they show growing pressure on foreign exchange reserves, fiscal stability, and overall economic resilience.

An even bigger concern is the gap between installed capacity and actual power generation. Bangladesh has built significant power capacity, but much of it remains unused due to fuel shortages.

This creates a paradox -- power plants are in place, but electricity is still not available when needed. Load shedding continues, industries face disruptions, and the cost of maintaining idle capacity keeps increasing.

The case for solar

Solar energy offers a very different economic model from fossil fuels. It needs a high upfront investment but has no recurring fuel costs.

The Bangladesh Sustainable and Renewable Energy Association (BSREA) estimates that a 5MW solar plant can be set up for about Tk 25 crore. Once it starts operating, it generates electricity at almost zero marginal cost. Unlike fossil fuel plants, it does not need ongoing subsidies or foreign currency for fuel imports.

Each megawatt of solar power can save about $325,000 a year in foreign exchange. At scale, this adds up to billions of dollars in savings over time. Solar energy also improves energy security by reducing reliance on volatile global markets.

Despite these clear benefits, renewable energy still makes up less than 5 percent of Bangladesh's energy mix, far below the global average of over 30 percent. This gap is not due to a lack of sunlight or technology. It is mainly caused by policy and institutional barriers.

What's holding solar back

Several critical obstacles continue to hinder the growth of solar energy in Bangladesh.

First, although recent reforms have reduced import duties on solar components, the overall tax and cost structure across the full system still imposes a high effective burden of up to 60 percent. This continues to affect affordability and slow adoption, discouraging both investors and consumers.

Second, financing remains expensive, with interest rates ranging from 10 to 12 percent or higher. Such costs make long-term renewable energy investments financially unviable. In addition, the absence of sovereign guarantees in renewable power purchase agreements (PPAs) has weakened investor confidence.

Over time, Bangladesh's renewable PPAs have removed key protections, including sovereign guarantees, balanced risk-sharing, and strong arbitration frameworks, making projects significantly less secure for investors.

The removal of Implementation Agreements has further reduced payment security, leaving no credible replacement mechanism and undermining the bankability of projects, which ultimately deters foreign investment.

Third, bureaucratic complexity continues to slow progress. Approval processes are often lengthy and unpredictable, discouraging private sector participation. Net metering, which is essential for rooftop solar expansion, remains limited and cumbersome. Battery storage technologies, which are crucial for grid stability, also face additional tariff burdens.

Perhaps most importantly, there is a lack of policy coherence. While renewable energy is promoted in principle, fossil fuels continue to receive both implicit and explicit support. This creates a distorted market in which clean energy struggles to compete.

A practical roadmap

Achieving 10,000MW of solar power in five years is possible, but only with a clear, phased strategy. According to the BSREA analysis, in the short term (0-6 months), the priority must be removing immediate barriers. Import duties and VAT on solar equipment should be cut to zero. Battery storage tariffs should be removed. Net metering approvals should be simplified and completed within 15-30 days, supported by a one-stop service system.

At the same time, stalled solar projects should be restarted quickly, and targeted incentives should encourage installations in industrial and commercial sectors.

In the medium term (1-3 years), the focus should shift to scaling investment and building infrastructure. Long-term financing at concessional rates of around 5 percent interest will be essential.

Land banks for large solar projects must be developed, along with the required grid infrastructure. Policies on merchant power and private investment should be simplified. A 10-15-year tax holiday could further attract investors.

At the same time, distributed solar should expand. Converting 1.5 million diesel irrigation pumps into solar-powered systems would reduce fuel use and improve rural energy access. Making rooftop solar mandatory in government buildings can quickly create demand and set an example.

In the long term (3-10 years), Bangladesh should aim to build a modern and resilient energy system. This includes expanding solar capacity beyond 10,000MW, investing in wind energy, developing floating solar projects, and introducing a national energy storage strategy.

Smart grids and digital systems will be essential to manage variable renewable energy. Developing a local manufacturing base can lower costs and create jobs, while regional power trade can improve energy stability.

Learning from others

Bangladesh does not need to reinvent the wheel. Other countries have already shown how rapid solar expansion can be achieved.

Vietnam, for example, added nearly 11,000MW of solar capacity in just one year in 2020. This was driven by a time-bound feed-in tariff policy that guaranteed fixed prices for a limited period. The policy triggered a surge in investment and enabled rapid project implementation.

Pakistan offers another lesson. Faced with rising electricity costs and a heavy fuel import burden, citizens and businesses increasingly turned to rooftop solar. This decentralised approach expanded capacity significantly while also reducing reliance on imported fuels. These examples show that rapid energy transformation is not only possible but already underway.

In Bangladesh, one of the greatest untapped opportunities is rooftop solar. Government buildings, schools, hospitals, factories, and commercial complexes have large unused roof spaces. Even conservative estimates suggest a potential of at least 4,000MW. With wider adoption, this could exceed 10,000MW.

Rooftop solar also has clear advantages. It reduces transmission losses, eases pressure on the grid, and allows consumers to generate their own electricity. With the right incentives and simplified procedures, it could become a key driver of Bangladesh's solar expansion.

A strategic turning point

Bangladesh stands at a crossroads. Continuing to invest heavily in fossil fuel infrastructure risks locking the country into a costly and unsustainable path.

Coal- and LNG-based power plants create long-term financial and environmental commitments once they are built. Without a clear phase-out plan, they could also slow the growth of renewable energy.

On the other hand, a clear shift towards solar power offers a path to energy security, economic stability, and environmental sustainability.

The current crisis, while difficult, also presents a rare opportunity. It forces tough decisions, but it also opens the door to meaningful transformation.

The goal of generating 10,000MW of solar power in five years is ambitious but achievable. It will require not just vision, but strong execution. Policies must be aligned, barriers must be removed, and institutions must be strengthened.

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the opinions and views of The Business Standard.