Bangladesh Solar Report

The total installed renewable energy capacity in Bangladesh is approximately 650.53 megawatts (MW). Specifically, solar energy contributes 459 MW.⁴

The country plans to generate 4,100 MW of clean energy by 2030, consisting of 2,277 MW from solar.⁵

The average costs of different electricity generation sources in Bangladesh:⁶

Coal

The cost of coal-fired power generation in Bangladesh averaged approximately 4.78 U.S. cents per kWh

Natural Gas

Cost of generation is ranging from 0.017595 USD/kWh to 0.035785 USD/kWh

Solar Energy ⁷:

Rooftop Solar: The levelized cost of electricity (LCOE) from rooftop solar is approximately 0.044625 USD/kWh

Utility-Scale Solar: The LCOE from utility-scale solar stands at around 0.0646 USD/kWh.

Heavy Fuel Oil (HFO)

A much more expensive option compared to natural gas, costing around 0.15181 USD/kWh on average.

Diesel

The most expensive option, with an average cost of 0.317475 USD/kWh.

Overall Context ⁸

• According to the Bangladesh Power Development Board (BPDB), the average electricity generation cost for the fiscal year 2021-2022 was approximately $0.076075 per kilowatt-hour (kWh).
• Projections indicate that this cost is likely to double in the fiscal year 2022-2023, representing a significant increase in the average electricity generation cost.

Figure 01: Cost comparison of different electricity generation sources

In figure 02, all the percentages of various electricity generation sources are given for year 2022- 2023.⁹

As of 2020, 96.20% of the population in Bangladesh has access to electricity, which is a significant improvement from previous years. However, it’s essential to note that the country still faces challenges related to power outages, especially in rural areas. These outages can last for about 4-6 hours per day, and during summer, they may extend to 6-8 hours.

By 2018, the SHS program had sold over 4.1 million units, bringing electricity services to approximately 20 million people in Bangladesh.¹⁰

There are 1,262 MW of renewable energy projects under construction across 30 different projects, with further plans for 8,668 MW of Bangladesh solar project in the planning phases. The country has achieved a renewable energy capacity of 1,194 MW, predominantly from solar energy.¹¹¹²

The Solar Home System (SHS) program is an off grid program in Bangladesh. ¹³

By 2018, the Solar Home System (SHS) program in Bangladesh had achieved significant milestones, including:

• The sale of over 4.1 million units, extending electricity services to approximately 20 million people.
• Financial benefits to SHS households amounting to $745 million.
• Government earnings of $474 million from taxes on SHS products, coupled with the avoidance of kerosene subsidies.

Furthermore, market projections indicate that the solar energy market in Bangladesh is poised for substantial growth, with a projected compound annual growth rate (CAGR) of 7.63% from 2024 to 2028. This growth is expected to result in a market volume of 0.51 billion kilowatt-hours by 2028, underscoring the country’s increasing adoption of solar energy solutions.

¹⁴¹⁵

• In 2023, Bangladesh took significant steps to address its growing energy demand by approving a total of 2.19 gigawatts (GW) of large-scale photovoltaic (PV) projects. Notably, in December 2023, the Cabinet Committee on Government Purchase (CCGP) approved tariffs for seven solar power plants, totaling 630 megawatts (MW).
• The country has also seen the successful commissioning of several solar projects, including:
  • The 200 MW solar park in Sundarganj, Gaibandha, which achieved commercial operations in January 2023 and is currently the largest solar project in Bangladesh.
  • The 100 MW solar park in Mongla Upazila, Bagerhat, which became operational in 2021.
• In addition to these larger projects, several smaller-scale initiatives are also underway. The state-run financier, Infrastructure Development Company Ltd (IDCOL), has approved 41 rooftop solar projects, expected to generate a total of 50 MW of electricity.
• Furthermore, approximately 15 more projects are awaiting approval, which could collectively add 52 MW of generation capacity, further contributing to Bangladesh’s growing solar energy landscape.

Forecasted On-Grid Projects ¹¹

In 2023, Bangladesh approved a significant amount of large-scale photovoltaic (PV) projects, totaling 2.19 GW. Here are some key details about the approved projects:

• 300 MW Solar Plant by ACWA Power and Local Companies
• 240 MW Solar Plant in Mymensingh
• 200 MW Floating and Ground-Mounted Solar Plant
• 180 MW Solar Facility in Jamalpur District

While specific data for the solar industry is limited, wages in the broader renewable energy sector are generally slightly higher than the manufacturing sector average.

According to industry estimates, entry-level technicians and workers in the renewable energy sector can expect wages approx. USD 135-170 per month.

As of 2024, the population of Bangladesh stands at approximately 174.7 million people.¹⁶

Some industry estimates suggest that overhead costs for solar panel manufacturing in Bangladesh could be around 15-20% of the total production cost. This is lower than the typical overhead costs in more developed countries, which can range from 25-35%. Here are some insights into overhead costs for solar panel manufacturing in Bangladesh:

Rent/Facility Costs

Bangladesh generally has lower rental and facility costs compared to many other countries. Industrial rental rates in major cities like Dhaka can range from $2-5 per square meter per month.

Utilities

Electricity and other utility costs in Bangladesh are relatively low. The industrial electricity tariff is around $0.08-0.10 per kWh.

Labor Overhead

Labor costs in Bangladesh’s manufacturing sector are relatively low, which can help keep overhead costs related to administrative, supervisory, and support staff lower.

Taxation

• One can import machinery and raw materials for solar panel production duty-free.
• Manufacturers may receive cash incentives for exporting solar panels, typically ranging from 10-20% of the export value.

Here’s a summary of the energy infrastructure in Bangladesh:

Electricity Generation ⁴

• Total installed electricity generation capacity: around 27162 MW (as of 2024)
• Primary sources: Natural gas (56%), furnace oil (27%), coal (6%), hydro (0.87%), renewable energy (0.38%).
• Major power plants: Siddhirganj, Haripur, Ghorasal, Barapukuria coal power plant
• Significant dependence on natural gas, with domestic gas reserves depleting
• Increasing focus on coal-fired and renewable energy sources to meet growing demand

Transmission & Distribution

• Bangladesh’s electricity transmission infrastructure is owned and operated by the Power Grid Company of Bangladesh (PGCB), which comprises an extensive network of over 11,000 circuit-kilometers of transmission lines with voltage levels of 132kV, 230kV, and 400kV.
• In contrast, the distribution network is managed by a diverse range of entities, including Dhaka Electric Supply Company (DESCO), Dhaka Power Distribution Company (DPDC), and rural electric cooperatives. Despite these efforts, distribution losses remain a significant challenge, with levels ranging from 10-12%.
• Addressing these losses is crucial to improving the overall efficiency and reliability of Bangladesh’s electricity supply chain.

Renewable Energy

• Solar home systems: Over 6 million installations, primarily in rural areas
• Grid-connected solar: Around 39 MW of utility-scale solar parks
• Wind energy: Limited capacity, with a few small wind farms
• Hydropower: Around 230 MW of hydroelectric capacity

Energy Access

• Electrification rate: Around 98% of the population has access to electricity (as of 2020)
• Off-grid rural areas still rely on solar home systems and other decentralized solutions

Energy Imports

• Bangladesh imports a significant portion of its energy needs, including coal, furnace oil, and LNG
• Increasing reliance on imported LNG due to declining domestic gas reserves

Here’s a summary of the key regulations surrounding solar panel production in Bangladesh:

Renewable Energy Policy ¹⁷

Bangladesh has established a comprehensive Renewable Energy Policy in 2008, providing a framework for promoting renewable energy sources, including solar energy. The policy’s primary objectives are to facilitate private sector participation, offer fiscal incentives, and create a conducive environment for the development and implementation of renewable energy projects. By providing a supportive policy framework, Bangladesh aims to harness the potential of renewable energy sources, including solar energy, to contribute to the country’s energy mix and mitigate climate change.

Incentives and Tax Benefits

• Solar panel manufacturers in Bangladesh can enjoy tax holidays for a specified period (often 5-10 years) ¹⁸
• They can import machinery and raw materials for solar panel production duty-free.
• Manufacturers may receive cash incentives for exporting solar panels, typically ranging from 10-20% of the export value.

Renewable Energy Targets

Bangladesh has set a target to generate 40% of its electricity from renewable sources by 2041, which includes a significant contribution from solar power. This target drives policies and regulations to support the domestic solar industry.

Net Metering

Bangladesh has a net metering policy that allows residential, commercial, and industrial consumers to install grid-connected solar systems and sell excess electricity back to the grid. This policy aims to promote decentralized solar power generation. 

Quality Standards

The Bangladesh Standards and Testing Institution (BSTI) has established quality standards for solar panels and related components. Manufacturers must comply with these standards to ensure product quality and safety.

Renewable Energy Development Authority

The Sustainable and Renewable Energy Development Authority (SREDA) is the primary regulatory body responsible for overseeing and promoting renewable energy projects, including solar power, in Bangladesh.

Financial Support and Subsidies ¹⁹

• The Infrastructure Development Company Limited (IDCOL), a government-owned financial institution, provides low-interest loans and subsidies for renewable energy projects, including solar panel manufacturing facilities. IDCOL receives USD 128 million from the World Bank for its Renewable Energy Project
• The Bangladesh Bank (central bank) has introduced a dedicated refinance scheme for renewable energy projects, including solar panel production.

Research and Development

• The government has established the Renewable Energy Research Center (RERC) to conduct research and development activities related to renewable energy technologies, including solar panels.
• Funding and support are provided for research projects and collaborations with local and international institutions.

Skill Development Programs

The government, in collaboration with industry partners and educational institutions, has launched training programs to develop skilled technicians and workers for the solar panel manufacturing industry.

Net Metering and Rooftop Solar Programs

• Bangladesh has implemented a net metering policy, allowing households and businesses to install rooftop solar systems and sell excess electricity to the grid.
• This initiative aims to create domestic demand for solar panels and support the local manufacturing industry.

Solar Home Systems (SHS) ¹⁰

Program Overview

Bangladesh has the largest off-grid solar power program in the world, which offers experiences and lessons for other countries to expand access to clean and affordable electricity. By harnessing solar power, the program enabled 20 million Bangladeshis to access electricity.

Partnership

The World Bank supported the program through the Rural Electrification and Renewable Energy Development (RERED) Project, working with the Infrastructure Development Company Ltd (IDCOL) to implement the program. IDCOL combined infrastructure financing with micro-financing and private sector solar electrification initiatives.

Incentives for Domestic Solar Industry:

• Financial Support: The government provides an incentive scheme for domestic solar manufacturers. Under this scheme, photovoltaic (PV) manufacturers receive 10% of the value of their exported products.
• Extension: The nation’s central bank has extended the program to cover the current financial year.
• Tax exemption ²⁰

The regulatory code 155 provides import duty exemptions for solar cells, modules and lanterns. As the table 01 shows, the duties for other wind and solar equipment are also relatively low.

Table 01 Duties for other wind and solar equipment

Here are some notable solar power projects, both current and planned, in Bangladesh:²⁷

Current Solar Projects

Sundarganj Solar Power Plant (32.4 MW)

• Located in Gaibandha district, this is currently the largest operational solar power plant in Bangladesh.

Panchagarh Solar Park (8.8 MW)

• Located in Panchagarh district, this solar park was completed in 2018.

Kaharole Solar Power Plant (7.4 MW)

• Located in Dinajpur district, this plant was commissioned in 2019.

Teknaf Solar Power Plant (3.5 MW)

• Located in Cox’s Bazar district, this plant was completed in 2019.

Solar Home Systems (SHS) Program

Bangladesh has installed over 6.2 million solar home systems in rural off-grid areas, primarily through the Infrastructure Development Company Limited (IDCOL) program.

Notable solar projects in the country (Projected)

Purbachal Solar Park (100 MW)

• Planned to be developed near Dhaka, this would be one of the largest solar parks in the country.
• The project is still in the planning and land acquisition phase.

Feni Solar Park (60 MW)

• A large-scale solar park planned in Feni district.
• The project is in the early development stage.

Jamalpur Solar Park (50 MW)

• A utility-scale solar park planned in Jamalpur district.
• The project is still in the planning phase.

Rooftop Solar Program

• The government has launched a program to promote rooftop solar installations in urban areas, particularly in Dhaka and other major cities.
• The program provides loans and subsidies to residential, commercial, and industrial consumers.

Net Metering Program

• Bangladesh has implemented a net metering policy, allowing consumers to install grid-connected solar systems and sell excess electricity back to the grid.
• This program is expected to drive the growth of distributed solar installations across the country.

Here’s a summary of some local companies:

Solarland Bangladesh Co. Ltd. ²²²¹

• A leading supplier and distributor of solar panels and system components for the Asian market
• Manufacture high quality, state of the art off-grid solar panels ranging from 1.5W – 340W, in 6V, 12V and 24V configurations. These panels feature high-efficient cells/wafers and are covered by our 25 year manufacturer’s warranty.
• Approving with ISO9001,ISO14000 and OHS18000 system
• Certificates of TUV, CQC, CGC, JET and CE.
• The Solarland module division focuses on the manufacturing of photovoltaic modules. Its advanced encapsulating production line of solar photovoltaic module was introduced in 2015, and has since reached a 800MW capacity.

SOLShare ²³²⁴

• SOLshare is a climate-tech company, founded in 2014~2015, consisting of a team of tech pioneers fully based out of Dhaka.
• The SOL bazaar, has grown to 4 business lines
  • SOLgrid (Peer-to-peer microgrid connections)
  • SOLmobility (Smart Electric three-wheeler technology)
  • Commercial & Industrial Solar Rooftop Services
• SOLmobility services replace traditional lead-acid batteries with lithium-ion counterparts. These lithium-ion batteries are longer-lasting which reduces battery waste in the long run.
• SOLshare created the world’s first peer-to-peer energy exchange network of rural households and small businesses with rooftop solar home systems.

Alfanar Group ²⁵²⁶

• Alfanar is primarily engaged in manufacturing electrical construction products, EPC solutions for conventional and renewable power plants, allied engineering services and design engineering.
• Alfanar Chittagong Solar PV Park is a 40MW solar PV power project. It is planned in Chittagong, Bangladesh. The project construction is likely to commence in 2023 and is expected to enter into commercial operation in 2024.