Bangladesh's rooftop solar push: Lessons before the rollout

With power deficits touching nearly 4,000 MW at their peak in August and imported fuel growing costlier each week, the government has turned to the country's rooftops. Under a Power Division gazette issued on 1 September, households that install battery-backed rooftop solar systems by 28 February 2027 will be paid Tk10.50 for every unit of surplus electricity fed into the national grid, a rate guaranteed until February 2030.

The arithmetic is nothing short of deliberate. The Power Division puts the maximum generation cost of such systems at Tk \8 per unit, then adds a 20% profit margin and an 11.25% premium. Distribution companies must record each customer's exported units and transfer payments to bank or mobile financial service accounts; cash payouts are ruled out altogether.

This is a genuine shift. Bangladesh's renewable push has so far leaned on utility-scale plants selling electricity under power purchase agreements, and its rooftop drive on a directive to solarise government buildings. The new scheme instead treats every private rooftop as a micro power plant operated by its owner. It also comes when targets matter: the Renewable Energy Policy 2025 aims for 20% of electricity from renewables by 2030 and 30% by 2040, after the country missed its earlier goals of 5% by 2015 and 10% by 2020. The FY 2027 budget has helped by waiving import duties on panels, inverters and key components until 2031.

But a policy succeeds or fails on its fit with the society it serves, not on its headline rate. Four countries that walked this road before offer lessons worth learning now, before the rollout gathers pace.

India's Prime Minister Surya Ghar Muft Bijli Yojana, launched in February 2024, aims to put rooftop solar on 10 million homes, with central subsidies of up to Rs 78,000 per household. By mid-2026, it was nearing 4 million installations. Yet critics argue that the scheme's design privileges the already privileged: applicants need ownership documents, a sound concrete roof, a smartphone and enough cash to pay upfront before the subsidy is reimbursed. With no published data on beneficiaries' incomes or locations, no one can say with confidence who is actually being subsidised.

That problem would be sharper in Bangladesh. According to the Bangladesh Bureau of Statistics, 68.58% of households in city corporation areas live in rented homes. A tenant in Mirpur or Jatrabari has no roof to put panels on and little reason to invest in a building they may leave in the foreseeable future. Unless the scheme is designed with renters in mind, it risks becoming restricted to landlords and wealthier homeowners.

Pakistan shows where that road can lead. Its net-metering regime credited rooftop exports at the national average power purchase price, and a solar boom followed. As affluent households drew less from the grid, the fixed cost of capacity payments fell increasingly on those who could not afford panels. In March 2025, the government cut the buyback rate for new users from Rs27 to Rs10 per unit, and in February 2026 the regulator went further, replacing net metering with net billing at Rs8.13 per unit. Households that had planned around the old rate saw the economics of rooftop solar shift almost overnight. Bangladesh should take note: the current rate is already slightly above the average retail tariff of Tk10.40 per unit, in a power sector already under severe financial strain.

Australia, particularly South Australia, has among the highest per-capita rooftop solar penetration in the world, and it offers a preview of what happens once a grid absorbs adoption at scale. On mild, sunny days, rooftop output can exceed the entire state's electricity demand. Most Australian states now cap residential exports, commonly at 5 kW per household, and some congested networks permit no exports at all. A generous buyback rate guarantees nothing if the grid cannot physically take the power it has promised to pay for. Bangladesh's ageing, load-shedding-prone distribution network is far from ready.

Vietnam adds a warning about deadlines. With its feed-in tariff set to expire at the end of 2020, the country installed over 9 GW of rooftop solar that year, around 6 GW of it in December alone. Installations clustered in the central and southern regions, where the grid struggled to absorb the surge and operators resorted to curtailment. Bangladesh's hard cut-off of 28 February 2027 invites the same last-minute scramble, with hurried installations and inferior equipment.

None of this is a reason to slow down; it is a reason to design better from the outset, and finance is the natural place to begin. If the incentive is to reach beyond those with cash in hand, Bangladesh need not look far for a model: IDCOL's solar home systems programme, delivered through partner organisations such as Grameen Shakti and BRAC, brought solar to millions of rural households on microcredit, with loan collection rates of around 96%. A concessional, collateral-free refinancing window through banks and microfinance institutions could do the same for urban rooftops today.

Finance alone, however, will not help those without a roof of their own. Here India offers a remedy as well as a warning, having since allowed third-party developers and utility-led aggregation, in which consumers pay for power rather than own panels. Bangladesh could go a step further with virtual and group net metering, so that tenants and apartment owners can share the output of a common rooftop or a nearby community installation.

Knowing whether the scheme reaches these households, rather than only the usual beneficiaries, requires data from day one. The Sustainable and Renewable Energy Development Authority (SREDA) is well placed to act as the single coordinating body, publishing beneficiary data by district, income group and tenure so that the incentive's reach can be tracked and, where necessary, corrected.

The Australian experience, meanwhile, argues for treating grid readiness as part of the policy rather than an afterthought. Before approving connections, distribution companies should assess how much solar each feeder can safely host, make those findings public, and require smart metres and inverters whose exports can be controlled.

Vietnam's lesson, in turn, points to the deadline itself. A gradual step-down in the buyback rate would spread installations over time instead of inviting a rush towards a single cliff-edge date. Certified installers and enforced equipment standards would keep quality from being sacrificed to speed. Whatever is revised along the way, though, the promise made to early adopters must hold: payments to existing producers should be ring-fenced and their contracts honoured, even if the rate for new entrants later changes. Pakistan has shown how quickly trust erodes when it does not.

Bangladesh is not the first country to attempt this, and that is an advantage. The experiences of India, Pakistan, Australia and Vietnam are there to learn from. The scheme's potential is real, but so is the risk that it stalls or benefits only a few. Designing for both equity and the grid now will cost far less than fixing either later.

Ismot Hasnine Masrur E Khuda is a researcher and energy policy analyst. Rassiq Aziz Kabir is an academic and public policy analyst.

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.