Standing at the edge of an energy tipping point

Not long ago, rooftop solar in Bangladesh was largely associated with remote villages beyond the reach of the national grid. Today, the conversation has shifted dramatically. Rising electricity prices, an increasingly expensive dependence on imported fossil fuels, falling global solar panel costs and mounting pressure to decarbonise the economy are pushing solar energy from the margins into the mainstream.

The question is no longer whether Bangladesh will embrace solar power. The more pressing question is whether it can seize the moment before structural constraints once again slow its progress.

Regional country Pakistan has offered a glimpse of what such a transition can look like. Within a few years, the country witnessed one of the world's fastest consumer-led solar revolutions, with households, factories and businesses installing solar systems at a pace few had anticipated. The movement was not driven by government subsidies but by economics. Some businesses have already installed industry-scale rooftop systems, reaping benefits in summer-time outages. But the expansion is far from potential. As electricity tariffs soared and solar panels became dramatically cheaper, consumers voted with their wallets. 

Bangladesh now finds itself standing at a remarkably similar crossroads.

A familiar set of pressures

Despite differences in politics and institutions, Bangladesh and Pakistan share similar energy challenges. Both countries face costly power sector overcapacity, heavy dependence on imported fossil fuels and rising electricity tariffs driven by increasing capacity payments and fiscal pressure. IMF-backed reforms are also expected to push electricity prices higher by reducing subsidies.

Energy experts say that when electricity tariffs exceed around $0.08–0.10 per kilowatt-hour, rooftop solar shifts from being an environmental choice to an economic necessity. Pakistan crossed that threshold, triggering a rapid consumer-led solar boom. With the latest electricity tariff hike effective from June, Bangladesh could be approaching a similar tipping point. For industries, businesses and households grappling with rising energy costs, solar is increasingly viewed as a practical way to reduce electricity bills and improve long-term energy security.

Bangladesh's advantage

Unlike many emerging economies, Bangladesh is not starting from zero.

Over the past two decades, the country built one of the world's largest Solar Home System (SHS) programmes, installing roughly six million systems across rural Bangladesh. Millions of households became familiar with solar technology long before rooftop systems became fashionable in cities.

This legacy offers Bangladesh something many countries lack: a population that already trusts solar technology and a nationwide network of trained installers and technicians.

That experience, however, does not automatically translate into a rooftop solar boom.

Modern rooftop systems for homes, industries and commercial buildings require entirely different technologies, financing models, grid integration and regulatory support than small off-grid home systems. The next phase of solar development will therefore depend not only on public awareness but also on policy consistency and investment.

The policy hurdle

For years, Bangladesh arguably slowed its own transition.

While neighbouring Pakistan opened its market to inexpensive imported solar equipment, Bangladesh imposed import duties ranging between 11% and 58% on various solar products. These additional costs made installations significantly more expensive and weakened the economic case for households and businesses.

The latest national budget has changed that equation by reducing import duties on many solar components to zero.

Industry stakeholders describe this as one of the most significant policy shifts in recent years. Lower equipment costs could substantially reduce installation expenses, improving project viability across residential, commercial and industrial sectors.

Whether this policy remains stable over time will greatly matter to renewable energy investors who typically make decisions over decades, not annual budget cycles.

China's role in the solar equation

No discussion about solar expansion in Asia is complete without acknowledging China's overwhelming influence.

China accounted for more than three-quarters of global clean-energy manufacturing investment in 2024 and dominates the production of photovoltaic (PV) modules. A sharp decline in manufacturing costs has fundamentally changed the economics of solar worldwide.

Global PV module prices fell by approximately 43% in 2023 alone, making solar affordable at a pace few analysts had predicted.

Pakistan became one of the biggest beneficiaries of this price collapse. Imports of Chinese solar modules surged, enabling households and businesses to install systems without waiting for government programmes or utility-scale projects.

Bangladesh now has access to the same global supply chain.

The opportunity lies in ensuring that affordable equipment is matched by financing, regulatory certainty and streamlined approval processes.

Lessons from the neighbours

Pakistan's experience offers valuable lessons—but not a blueprint to be copied wholesale.

Its solar revolution was overwhelmingly consumer-led. More than 96% of installations were reportedly financed directly by households and businesses rather than through government support.

Residential users became the largest drivers of adoption, followed by industries seeking protection from rising electricity costs. Agriculture also embraced off-grid solar, particularly for irrigation.

The speed of deployment surprised even policymakers.

Within a short period, privately generated electricity became so widespread that official statistics struggled to capture the true scale of generation occurring behind the meter. Traditional power plants experienced falling utilisation as consumers increasingly generated their own electricity.

For Bangladesh, the lesson is not merely about installing more panels. It is about preparing the grid, regulations and financing systems for a future where consumers become producers of electricity.

Across Asia, countries are taking different routes toward renewable energy.

The Philippines faces some of Southeast Asia's highest electricity tariffs but struggles with fragmented island geography. Indonesia possesses abundant renewable potential, yet regulatory decisions have slowed rooftop adoption. Thailand has developed a sophisticated solar manufacturing ecosystem despite facing none of the severe energy crises experienced elsewhere.

Bangladesh occupies a distinctive middle ground.

It has one of the strongest grassroots solar foundations in the developing world, an increasingly competitive manufacturing sector hungry for lower energy costs, and growing public awareness of renewable technologies.

What it lacks is the speed of policy execution.

BNP's election manifesto

Renewable energy is steadily becoming a central part of Bangladesh's economic and energy agenda. In its election manifesto, the BNP has pledged to generate 20% of the country's electricity from renewable sources—including solar, wind and biomass by 2030. The plan includes green financing, tax incentives for renewable investments, expanding clean energy in marginal areas, promoting biomass-based power generation and introducing a National Green Industrial Policy. It also proposes establishing a carbon trading market, which the party says could generate up to $1 billion annually. The energy minister this week elaborated the government's plan to expand the net metering system to accelerate renewable energy adoption and rooftop solar generation.

These commitments reflect a broader shift in how renewable energy is viewed—not just as an environmental necessity, but as a pillar of energy security, industrial competitiveness and long-term economic resilience.

Bangladesh's solar transition is no longer limited by technology. Solar panels have become significantly cheaper, public awareness is widespread, and businesses are increasingly looking to renewable energy to reduce operating costs. The greater challenge lies in creating a policy environment that encourages investment and removes regulatory hurdles.

If policymakers can maintain supportive policies, improve access to financing and streamline regulations, Bangladesh has the potential to build on its six million Solar Home Systems and accelerate a nationwide rooftop solar revolution. The opportunity is there; whether the country seizes it will depend on coordinated action across government, industry and the financial sector