Bangladesh has launched a package of incentives, tax concessions and fi nancing initiatives to accelerate rooftop solar deployment ahead of next summer, amid severe power shortages and rising fuel costs.
The government targets 3,000-4,000MW, with IDCOL aiming to facilitate 1,000MW through residential and industrial programs.
However, industry stakeholders and energy experts question the generation-cost assumptions and tight implementation deadline.
They have called for longer project timelines, improved fi nancing, streamlined approvals, and more attractive, dynamic tariffs for surplus electricity Bangladesh is stepping up efforts to expand rooftop solar as worsening power shortages, rising fuel costs and pressure on foreign exchange reserves expose the vulnerability of its energy system.
With load shedding reaching around 3,800MW during the current summer, the government is seeking to add thousands of megawatts of rooftop solar capacity before next summer through incentives, tax concessions and new fi nancing models.
The initiative has generated considerable interest, particularly in the industrial sector, but stakeholders remain concerned about whether the ambitious targets can be achieved within the proposed timeframe.
Financing, equipment supply, approvals, net-metering arrangements and the economics of battery storage could determine whether the government’s plans translate into actual capacity.
Bangladesh is under growing pressure over energy supply.
The situation has been aggravated by supply shortages and rising fuel costs, while the confl ict in the Middle East has further increased energy expenditure and put additional pressure on foreign exchange reserves.
Although load shedding has remained relatively manageable in the capital and major cities, it has become severe in rural areas.
Reports have emerged that some regions are experiencing power outages for nearly half of the day.
The crisis is disrupting industrial production, business activities, and daily life, while also increasing diesel consumption.
Prime Minister Tarique Rahman has apologized to the people for the continuing power shortages.
At the same time, the government has begun preparations to meet next summer’s electricity demand.
At a meeting with business leaders on September 14, the Prime Minister said gas and electricity supplies would return to the levels prevailing before the crisis that emerged in July from the night of September 15.
The government also presented plans to expand renewable energy, increase coal and gas exploration, and strengthen import infrastructure.
Alongside efforts to ensure adequate primary fuel for power generation, the government has introduced a special package, including duty-free facilities, to accelerate rooftop solar installations, particularly in the residential sector.
The aim is to achieve signifi cant rooftop solar capacity before February next year.
State Minister for Power, Energy and Mineral Resources Aninda Islam Amit told Parliament that the government wanted to add at least 3,000MW of rooftop solar capacity before next summer.
The Power Division, meanwhile, is working with an even higher target of 4,000MW.
Special Incentive for Rooftop Solar with Battery Storage The government has introduced a special incentive package to accelerate the installation of rooftop solar systems with battery storage as part of its efforts to expand renewable energy and strengthen long-term energy security.
Under a government notifi cation issued on September 1, the maximum generation cost for rooftop solar systems with battery storage has been set at Tk 8 per unit.
After adding a 20% profi t margin and an 11.25% premium, the incentive tariff for surplus electricity supplied to the grid has been fi xed at Tk 10.50 per unit.
Under the Net Metering Guideline 2025, customers installing storage-integrated rooftop solar systems by February 28, 2027, can receive Tk 10.50 per unit for surplus electricity supplied to the national grid after meeting their own demand.
The incentive will remain available for three years, until February 28, 2030.
If customers install systems at a cost below the government’s benchmark, the savings will accrue to them.
Distribution companies will maintain records of participating customers, electricity supplied to the grid and payments, including the incentive.
The incentive will be paid directly into customers’ bank accounts or mobile fi nancial service accounts; cash payments will not be allowed.
Systems installed after February 28, 2027, will not qualify for the incentive.
All equipment, including solar panels, batteries, inverters and meters, must meet the technical standards set by the relevant authorities, including BSTI and SREDA.
Assistance will be available through the Power Division’s one-stop service center and district- and upazilalevel offi ces of distribution companies.
Tax and Duty Concessions for Solar Equipment The government has also approved tax and duty concessions on the import of equipment and machinery required for renewable solar power projects.
Under the approved proposal, imports made within six months of the issuance of the relevant notifi cation will be exempt from customs duty, regulatory duty, supplementary duty, VAT, advance tax and advance income tax above the applicable 1% threshold.
The government expects the facility to boost solar power generation, reduce pressure caused by electricity shortages and support uninterrupted industrial production.
It is also expected to lower project costs, reduce losses associated with imported equipment and encourage investment and economic activity in the solar sector.
Local Entrepreneurs to Drive Rooftop Solar Expansion The government has also launched an initiative to expand rooftop solar through local entrepreneurs and build a nationwide network of renewable energy service providers.
Qualifi ed service providers will be enlisted on a district and geographic-area basis.
They will provide technical assistance, investment and business packages, customer services, and operation and maintenance facilities for rooftop solar and other renewable-energy technologies.
All electricity distribution companies have invited applications for enlistment.
Individuals and joint ventures will be eligible to participate.
The initiative is expected to create opportunities for local businesses, small and mediumsized enterprises, young and women entrepreneurs, and technology-based companies to enter the renewable energy sector.
Increased competition could also lead to more affordable and innovative investment and service packages for consumers.
The Power Division expects the initiative to make rooftop solar an important component of Bangladesh’s energy transition while creating new opportunities for local investment, skills development, small and mediumsized businesses and employment.
IDCOL Targets 1,000MW Infrastructure Development Company Limited (IDCOL) is working to facilitate 1,000MW of solar capacity before next summer.
The state-owned specialized fi nancial institution aims to contribute one-fourth of the government’s broader target of 4,000MW of renewable energy capacity by next summer.
Of the IDCOL target, 500MW is planned under a new Domestic Rooftop Solar (DRS) program, while another 500MW is expected from expansion of its existing industrial rooftop solar program.
The DRS initiative is expected to be launched shortly.
IDCOL Managing Director (Acting) SM Monirul Islam said homeowners would provide 20% of the system cost as a down payment, while demand aggregators (DAs) would contribute another 20% as equity.
IDCOL would refi nance the remaining 60% through loans to the DAs.
Under the model, homeowners would repay their fi nancing over fi ve years and DAs over seven years.
The model is intended to make rooftop solar more affordable while reducing dependence on grid electricity.
Can the Target Be Achieved Before Summer? The government’s rooftop solar initiative comes at a critical time.
Bangladesh needs to reduce pressure on the grid while also containing the rising cost of imported fossil fuels.
Rooftop solar, particularly when combined with battery storage, can help reduce daytime grid demand and provide backup power during outages.
However, the target of adding 3,000- 4,000MW before next summer is highly ambitious.
Project approvals, fi nancing, equipment supply, technical standards, installation capacity, and net-metering procedures could all affect the pace of implementation.
The experience of an earlier six-month rooftop solar program targeting 3,000MW also suggests that ambitious capacity targets alone may not be suffi cient.
A longer implementation window, easier access to fi nancing, streamlined approvals and a more attractive and predictable surplus-power purchase mechanism may be necessary.
The government’s initiative to use rooftop solar to ease pressure on the grid before summer is therefore a welcome step.
But to turn the target into actual capacity, the incentive package and implementation framework may need further review in consultation with investors, entrepreneurs, equipment suppliers, distribution companies and energy experts.
If these bottlenecks can be addressed quickly, rooftop solar could become not only a short-term tool for reducing summer load pressure but also an important pillar of Bangladesh’s longer-term energy transition.
Under the proposed model, homeowners will repay their share of the fi nancing over fi ve years, while demand aggregators (DAs) will repay their loans over seven years.
The effective cost of electricity for households could be Tk 6-8 per unit, signifi cantly lower than the prevailing electricity tariff.
SM Monirul Islam said the Domestic Rooftop Solar (DRS) program could potentially unlock around 33,000MW of rooftop solar capacity in the long term if market players participate on a large scale.
However, several issues, including the selection of DAs, equipment standards, and supply-chain readiness, need to be addressed before the program is rolled out nationwide.
IDCOL plans to deploy the selected DAs in the fi eld within the next two weeks.
Initially, it is selecting DAs from organizations that previously worked as partner organizations under its Solar Home Systems program and have a good track record, including satisfactory fi nancial records and no loan defaults.
The number of DAs will later be expanded to include private-sector companies and new entrepreneurs.
BSREA Seeks Review of Solar Package The Bangladesh Sustainable and Renewable Energy Association (BSREA) has welcomed the government’s initiative to expand rooftop solar but has proposed a seven-point set of recommendations to make the incentive package more effective.
The association has called for a realistic assessment of project costs, taking into account system size, technology, fi nancing, operation and maintenance expenses, particularly battery-storage costs.
Based on such an assessment, it has proposed setting the generation cost at around Tk 8 per unit.
BSREA has also recommended reviewing the existing Tk 10.50 per-unit tariff for purchasing surplus electricity and introducing a dynamic or indexed tariff linked to changes in the bulk electricity tariff.
It has further proposed extending the electricity purchase period from three years to fi ve to 10 years, or an appropriate period.
The association has also suggested providing collateral-free fi nancing at an interest rate of 3-4% for rooftop solar projects.
To speed up project implementation, BSREA has recommended time-bound approvals, with SREDA and BSTI approvals completed within 10 working days and net-metering approvals from distribution companies within seven working days.
It has also proposed establishing a one-stop service and a central digital monitoring system to ensure smooth implementation of the entire program.
BSREA Secretary General Engineer Ataur Rahman Rozel said adding 4,000MW of rooftop solar capacity before next summer would be extremely challenging.
He also expressed concern that IDCOL’s proposed approach could remain largely dependent on NGOs.
The government, he said, must ensure access to fi nancing for private entrepreneurs and individuals interested in installing rooftop solar systems.
‘Even then, I do not think the target can be achieved within the next fi ve months,’ Rozel said.
However, he noted that residential and commercial consumers could become increasingly interested in rooftop solar once load shedding intensifi es during the summer.
Experts Question Generation Cost and Timeline Former Bangladesh Energy Regulatory Commission (BERC) member Engineer Mizanur Rahman said the proposed tariff for purchasing surplus electricity was not suffi ciently attractive.
According to his assessment, the generation cost would be around Tk 10.39 per unit for a 1kW solar system with 1kW of battery storage.
If the system is paired with 0.5kW of battery storage, the generation cost would still be around Tk 9.43 per unit.
‘It is diffi cult to understand on what basis the generation cost has been estimated at Tk 8 per unit,’ he said, urging the Power Division to reassess the cost.
Institute for Energy Economics and Financial Analysis (IEEFA) Lead Energy Analyst Engineer Shafi qul Alam also said the target of adding 4,000MW of rooftop solar before next summer was unrealistic.
He pointed out that a previous program announced in 2025 aimed to add 3,000MW of rooftop solar capacity within six months, but failed to implement any projects under the program.
Under the latest package, projects are eligible for the incentive only until February next year.
Alam suggested extending the implementation window to at least one year.
He also called for changes to the surplus electricity purchase mechanism.
Instead of limiting the Tk 10.50 per-unit tariff to a fi xed period, he proposed that electricity exported to the grid through net metering should receive the tariff throughout the entire project lifetime.
‘Despite these concerns, the incentive for rooftop solar installation is commendable,’ he said.
BSREA President Mostafa Al Mahmud said the government’s successive initiatives to promote renewable energy were encouraging.
However, he also called for a fresh review of the rooftop solar package, particularly the tariff structure.
He said the tariff should be dynamic and that the opportunity to sell surplus electricity should remain available throughout the lifetime of the project.
A Promising Initiative That Needs Fine-Tuning A quiet rooftop solar revolution is already underway in Bangladesh, particularly in the industrial sector.
Around 1,500MW of rooftop solar capacity has reportedly been added so far, while interest in combining rooftop solar with battery storage is growing.
Although Bangladesh has adopted several plans to expand renewable energy, the sector has rarely received meaningful fi nancial incentives.
The latest package marks a signifi cant step by providing incentives for rooftop solar systems with storage.
However, stakeholders believe the package needs to be revisited, particularly regarding its implementation period, electricity purchase tariff, and duration of the purchase arrangement.
Similar incentive programs have achieved success in countries such as Vietnam, where the electricity purchase arrangement was kept open for a longer period.
The government has also recently announced tax and duty concessions for rooftop solar equipment for six months.
Industry stakeholders have called for extending this period to at least one year.
In 2025, Bangladesh announced a program to add 3,000MW of rooftop solar capacity within six months, but no projects could be implemented under the initiative.
The latest storageintegrated rooftop solar program also has a six-month implementation window.
Sector stakeholders argue that Bangladesh’s lengthy project approval process and bureaucratic complexities should allow at least one year.
The government’s initiative to accelerate rooftop solar deployment ahead of the summer is widely seen as a positive move.
However, stakeholders believe the Power Division should revisit the program and package after consulting industry players and experts to ensure it can achieve its ambitious targets