What Is The Bangladesh National Solar Energy Action Plan?

Bangladesh is one of the most densely populated countries in the world, with over 160 million people living in a land area of 147,570 square kilometers. As the country has rapidly industrialized, demand for electricity has dramatically increased. However, only 62% of the population has access to electricity due to inadequate infrastructure and generation capacity.

Bangladesh has historically relied on natural gas for 70% of its electricity generation. But gas reserves are quickly dwindling. Load shedding, which is the practice of deliberately cutting power to certain areas to manage demand, is common across the country. Expanding access to reliable electricity is critical for continued economic development in Bangladesh.

To meet rising energy needs in a sustainable way, the government of Bangladesh aims to tap the country’s abundant solar energy potential. With over 250 sunny days per year, Bangladesh has one of the highest levels of solar irradiance in the world. Scaling up solar power is a strategic priority to ensure energy security and meet renewable energy goals.

Table of Contents

Overview of the Action Plan

The Bangladesh National Solar Energy Action Plan was initiated in 2014 by the Infrastructure Development Company Limited (IDCOL) with the aim of developing and promoting solar energy in Bangladesh. The plan outlines goals and strategies to increase solar power capacity in Bangladesh to 3,100 megawatts (MW) by 2021.

The 5-year action plan from 2015 to 2020 aims to install solar home systems in rural areas to provide electricity access, install solar irrigation pumps for farmers, set up solar mini-grids in off-grid areas, and develop utility-scale solar parks connected to the national grid. The plan also includes targets for training technicians, creating financing schemes, and building awareness on solar energy.

The action plan is overseen by IDCOL with support from the Sustainable and Renewable Energy Development Authority (SREDA), Bangladesh Power Development Board (BPDB), and Ministry of Power, Energy and Mineral Resources.

Solar Targets

The Bangladesh National Solar Energy Action Plan sets out ambitious solar energy goals for the country to achieve by 2015, 2021 and 2030. By 2015, the goal was for Bangladesh to have 200 MW of installed solar capacity. For 2021, the target was set at 1,740 MW of installed capacity. The largest target is set for 2030, where the goal is for Bangladesh to have 10,000 MW of installed solar capacity.

These targets represent a major ramp up in solar energy adoption for Bangladesh. In 2015, the country had less than 50 MW of installed solar capacity. The 2021 target of 1,740 MW represents over a 30 fold increase from 2015 levels. The 2030 target of 10,000 MW installed capacity is 200 times higher than actual 2015 levels.

Achieving these ambitious solar targets will require major investments in solar power plants, rooftop solar systems and off-grid solar solutions across Bangladesh. It will also require supportive policies and strategies to promote rapid growth of the country’s solar energy infrastructure.

Funding and Budget

The Bangladesh National Solar Energy Action Plan has an estimated budget of $10 billion USD for meeting its 2030 solar energy goals. This is a significant investment that will require financing from multiple sources.

The government of Bangladesh is expected to provide 25% of the funding, sourced from the national budget as well as various green funds and initiatives. Multilateral development banks such as the World Bank and the Asian Development Bank are also key funding partners, providing low-interest loans to support both public and private solar energy projects.

Foreign direct investment will play an important role, with policies aimed at attracting international solar companies to invest in Bangladesh through public-private partnerships. Remittances from Bangladeshis working abroad are also seen as a potential source of household financing for small-scale solar installations.

Finally, the Action Plan aims to unlock climate financing from sources like the Green Climate Fund and bilateral donors. Dedicated funds to support solar energy access for low-income households will help achieve the goal of reaching all citizens.

Policy Initiatives

The Action Plan outlines several key policy initiatives and reforms planned to support the growth of solar energy in Bangladesh. Some of the major policy priorities include:

Developing a long-term solar energy roadmap and policy framework that provides stability and incentives for investments in the sector. This includes setting clear solar targets, subsidies, and tax incentives.

Reforming utility regulations to enable grid integration, net metering and off-grid solar deployment. New interconnection standards, fair tariff setting and open access rules will be critical.
Streamlining the licensing and permitting process for solar projects through a unified application system and clear guidelines. This aims to reduce lengthy bureaucratic procedures.
Building solar-friendly financing mechanisms like low-interest loans, green banks, solar leasing/renting and innovative business models to accelerate adoption.

Developing technical standards and quality control mechanisms for solar equipment, installations and after-sales services. This ensures product reliability and performance.
Creating fiscal incentives like exemptions on VAT, import duties and taxes for solar imports. This lowers costs and encourages growth of the local industry.

The policy reforms aim to tackle key barriers and create an enabling environment for scaling up solar energy investments in Bangladesh.

Implementation Strategies

The Bangladesh National Solar Energy Action Plan outlines several strategies for achieving the plan’s ambitious solar energy goals.

A key strategy is establishing financial incentives like subsidies, loans and tax breaks to promote solar adoption. This includes subsidized financing and equipment costs for residential solar systems. The government aims to lower the high upfront costs that deter solar investments.

There are also strategies to build local capacity and skills for solar. This includes training programs for installers, as well as vocational training on solar technologies. Building human capital is critical for scaling up the solar industry.

The plan advocates new regulations and policies like net metering, streamlined permitting, and updated building codes to facilitate solar expansion. Solar-friendly policies aim to remove regulatory and administrative hurdles.

Public awareness campaigns will promote the benefits of solar energy. Outreach to rural communities is also part of the strategy to expand access to solar. Partnerships with NGOs can assist with community engagement.

Research and development programs, including collaborations with universities, will drive technological innovations needed to realize the plan’s vision. R&D can help make solar more efficient, affordable and adaptable locally.

Leveraging foreign aid and private sector participation will provide funding and expertise. International partnerships, especially with development banks, can finance large-scale solar projects.

Implementation will require robust coordination between government ministries, regulators, industry, utilities and other stakeholders. Strong governance and institutions will be needed to execute the plan successfully.

Challenges

The Bangladesh solar energy Action Plan faces several challenges that could hamper its progress. Some key obstacles include:

High upfront costs: Solar PV systems require significant upfront investment, which can be prohibitive for many households and businesses in Bangladesh.

Intermittency of solar power: Solar power generation depends on the amount of sunlight available, which varies throughout the day and seasonally in Bangladesh. This intermittency requires integration with grid infrastructure or energy storage solutions.

Land constraints: Large-scale solar farms require substantial land area, which is limited in densely populated Bangladesh. Rooftop solar helps address this, but faces separate challenges like structural adequacy.

Immature domestic solar industry: Bangladesh’s solar industry is still developing, with limited local manufacturing and technical expertise. This could constrain growth and require continued reliance on imports.

Grid integration challenges: Adding significant solar capacity requires upgrades to Bangladesh’s electricity grid to handle two-way flows and system balancing.

Bureaucratic and regulatory hurdles: The action plan requires coordination across many government agencies, as well as new policies, regulations, incentives, and quality standards for the solar sector.

Access to financing: Securing affordable debt financing for solar projects remains difficult, especially for smaller systems in rural areas.

Lack of awareness and technical skills: Knowledge gaps about solar power exist, particularly in rural areas. Technical training programs are needed to build an adept workforce.

Progress So Far

Bangladesh has made significant progress in developing its solar energy capacity since the adoption of the National Solar Energy Action Plan in 2015. Key developments and milestones include:

Installed solar capacity has increased from 200 MW in 2015 to over 1,000 MW by the end of 2020, putting Bangladesh on track to meet its 2021 target of 1,676 MW.
Over 6 million solar home systems have been installed in rural areas, providing clean electricity access to over 20 million people.
The government has approved several large scale solar parks and farms, including a 500 MW solar park at Feni.

Net metering guidelines have been introduced, allowing homes and businesses to install rooftop solar systems and sell excess power back to the grid.
The Infrastructure Development Company Limited has been established to facilitate public and private investment in renewable energy projects.
The government has developed training programs to build technical capacity in solar energy.

Educational programs have raised awareness about the benefits of solar power.

While more work remains, the progress demonstrates Bangladesh’s commitment to scaling up solar energy and meeting its ambitious targets.

Impact

The Action Plan has had significant environmental and economic impacts for Bangladesh. On the environmental side, the growth of solar energy is helping Bangladesh reduce its reliance on fossil fuels and curb carbon emissions. With fossil fuels accounting for over 90% of power generation, the expansion of solar can help mitigate climate change and air pollution impacts. Bangladesh is also the world’s most vulnerable country to climate change impacts like sea level rise, making clean energy a crucial adaptation measure.

Economically, the Action Plan is creating jobs and growth in the nascent solar industry. Solar installations require panels, batteries, and other equipment that Bangladesh can manufacture domestically. The solar sector provides opportunities for companies to enter the market and hire skilled workers. By generating power locally from the sun, Bangladesh also reduces its dependence on imported fossil fuels. The government estimates the Action Plan could save $1.5 billion in displaced fuel imports annually by 2041. Wider electricity access enabled by solar mini-grids can also drive productivity and connectivity gains.

Future Outlook

The future for solar energy in Bangladesh looks bright. With strong government support and clearly defined targets, Bangladesh is poised to continue expanding its solar energy capacity in the coming years. Some key next steps and long-term vision elements include:

Continuing to implement and refine the action plan strategies, while regularly assessing progress against targets.

Expanding solar into new applications like agricultural irrigation and electric vehicle charging infrastructure.
Attracting further private and international investment into the solar sector.
Developing a skilled workforce to support the growth of the country’s solar industry.

Innovating new solar products and solutions suited for the Bangladesh market.
Making solar energy affordable and accessible even for remote and low-income areas.
Using solar to provide electricity access to the entire population.

Integrating large-scale solar into the national grid as a major energy source.
Becoming a regional leader in solar energy adoption and expertise.

With long-term commitment and vision, Bangladesh aims to harness its abundant solar resource to power a more sustainable future for its people and economy.