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Almost 12 years ago, I wrote about the fast adoption of small-scale solar power in Bangladesh. A couple years later, I got to talk with an expert and leader in the industry. It was an interesting and inspiring story, but apparently it didn’t continue and grow as fast as desired. The country is now implementing some strong solar policies to try to see much faster growth.
Bangladesh has just introduced a 0% tax rate for the solar power sector that runs until 2035. Various duties and taxes are being removed on solar power components. To be specific, the import duty, regulatory duty, supplementary duty, and advance tax are all being cut to 0% on critical solar power components. Additionally, “Businesses that consume electricity generated from solar plants are also expected to receive incentives. Under the proposal, companies could claim a tax rebate equivalent to 5% of their solar electricity bill against their total payable income tax.”
Bangladesh aims to have renewable energy sources provide 20% of total electricity demand by 2030. The new policies are aimed at helping the country get to that target, as well as the next one — clean renewable energy providing 30% to 50% of electricity demand by 2050. Admittedly, that latter one is a pretty lame target. One would hope — and expect — the country would be at 100% renewable energy by then.
At the moment, Bangladesh has 1,797 MW of installed renewable energy capacity, most of which — 1,504 MW — comes from solar power. Overall, the country has about 29,000 MW of power capacity. That means renewables account for only about 6% of total power capacity. Unfortunately, renewables account for an even much less of the country’s actual electricity generation. “A recent report by IEEFA found that renewable energy contributes only 2.3% of Bangladesh’s grid-based electricity generation, significantly below the global average of 33.8%.”
Hopefully the big incentives for solar power lead to a surge in the sector and Bangladesh can get back to sharing inspiring solar stories.
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