By Md.Toufique Hossain & SM Shamim Reza: At present, Bangladesh’s economy faces severe challenges in terms of energy problems and many other economic issues. The Middle East tensions and incidents at the Maheshkhali LNG terminal have revealed new aspects of the energy crisis in the country. For example, production at industrial plants is hit by Gas and electricity deficiencies; some have been forced to cut working hours, others have been forced to dismiss workers. Meanwhile, income has declined in the face of strong inflation and weak employment. About 0.21 million people were pushed into poverty by the previous fiscal year, according to the World Bank.
In that case, the best alternative option will be Renewable energy. The role of renewable energy is becoming increasingly significant here and is getting some attention from the government, policymakers, and relevant stakeholders. The solar power generation capacity in the country is 418 MW, while considering the potential at the rooftop installation level, it can provide more than 1000 MW of solar power. Second, rooftop solar should be scaled up in the rural areas too, people should be motivated to adopt it. Rooftop solar can play a significant role in mitigating the electricity crisis, but we need to attract rural people, and to reduce costs, import duty must be removed.
Rooftop Solar’s quiet rise
Rooftop solar is the easier case to make. Renewable energy still supplies only 1.5 percent of Bangladesh’s grid, the World Bank said in a July account of its Scaling Up Renewable Energy project, which added 338 megawatts of clean power to the grid and helped the state-owned IDCOL set up financing for both rooftop and utility-scale solar, along with a new net-metering rule for rooftop panels. IDCOL has become the main lender behind the industrial rooftop boom: it has financed over 200 megawatts of industrial rooftop solar and wants to reach 300 by the end of the year, on top of a $67 million loan, backed by the World Bank, KfW and the Asian Infrastructure Investment Bank, for a 64.55-megawatt solar plant in Pabna. Factory owners aren’t putting panels on their roofs out of goodwill: electricity tariffs have climbed enough that cutting their own bill now pays for the equipment. What’s missing isn’t appetite; it’s financing reach and the cost of imported parts, which is exactly what lenders like IDCOL, the World Bank and the ADB are there to fix.
Panels over paddy-
Agrivoltaics is less familiar, and it matters because rooftops alone won’t get Bangladesh very far. Renewable sources supplied only about 3.6 percent of the electricity on Bangladesh’s grid as of March 2025, according to the US government’s Bangladesh Country Commercial Guide, and the obvious next step, building solar parks on open land, runs into a problem: there isn’t much open land left. The country’s agricultural land fell from 74,388 square kilometres in 2015 to 72,916 square kilometres in 2023, the Bangladesh Bureau of Statistics found in its latest land-cover tracking under the Environment, Climate Change and Disaster Statistics project, even as the population and food needs keep growing. Agrivoltaics tries to get around that by putting panels above a crop instead of in place of it. Some of the push is coming from outside the 8 square: a plan to replace about 1.2 million diesel irrigation pumps with solar ones, drawn up with the ADB, is expected to need around 45,000 solar irrigation units and close to $1.8 billion, and a 2025 workshop run by the International Water Management Institute pointed specifically to agrivoltaics and grid-connected systems as ways to get more out of that land. The real obstacle is policy, not engineering: Bangladesh still restricts using farmland for power generation, and until that changes, and farmers get a clear share of the proceeds, agrivoltaics will likely stay a handful of pilot projects rather than a real source of power.
Challenges need to be addressed: loans from banks are difficult to obtain for this business, and there is a high tax rate on persons importing the equipment. Second, due to the current fuel shortage situation, industrial production is slowing down, and the supply of gas is being affected by consumption at domestic users. Official figures show that the total rooftop solar power capacity in the country stands at 418 megawatts, but the USA-based research body IEEFA believes it can be as high as 1,000 megawatts if all projects—including small ones—are taken into account. However, a lack of awareness in the private sector has not fully realised the potential, and even those interested have barriers to overcome, such as prohibitive bank loan terms and high taxes on importing solar technologies. If the objective is a solar transformation, then duties should be abolished.
Neither rooftop solar nor agrivoltaics solves Bangladesh’s energy problem on its own. But both need almost no new land, both make economic sense now that tariffs are already rising,, and both benefit from institutions that are already in place, such as the ADB, IDCOL and the World Bank. The opportunity is not just environmental; it’s economic: As far as challenges are concerned, the government is targeting the production of 10,000 megawatts from renewable energy sources by 2030, and it is recommended to develop policies for consumers to support this. Achieving that will involve financing, equipment, and employment around renewable energy – around solar, not just a flat on the roof or a farm field. It’s as much a policy issue, however, as a hardware one—from the clarity of net-metering policy to improvements that make adoption easier for both homeowners and farmers. But that’s not the technology that stands between a set of pilot projects and that goal. Investing early in momentum building.
Toufique Hossain is a national columnist and financial market analyst, and an alumnus of The Fletcher School of Law and Diplomacy, Tufts University, USA. Shamim Reza is a solar power system specialist at the Department of Public Health Engineering (DPHE). The views here are their own.
toufique2010@gmail.com
