Solar Energy Gives Bangladesh a Way Out of the Energy Crisis

The government is investing heavily in solar energy in Bangladesh to reduce dependence on fossil fuels. “If we could start today, we would, but there are bureaucratic processes that need to be streamlined first. Still, we are moving with urgency because the current energy situation leaves us with no alternative,” said Bangladesh’s Power, Energy and Mineral Resources Minister Iqbal Hassan Mahmood Tuku regarding reopening the letters of intent for 31 renewable energy projects cancelled by the interim administration. While there is no guarantee how many of these projects will come to life, the move is symbolic and the clearest sign of the government’s willingness to urgently change its energy policy direction.

Solar Energy in Bangladesh: New Energy Direction 

At a press briefing in April, Bangladeshi officials announced plans to scale up solar capacity to 10,000 MW by 2030 through public-private partnerships (PPPs) to ease the strain of costly fossil fuels on the economy. Reports reveal that 26 renewable power plants are currently under construction with a capacity of 1,174 MW.

Bangladesh’s Renewable Energy Policy

The country’s Renewable Energy Policy 2025 targets at least 20% of renewable electricity by 2030. To achieve this, the Bangladeshi government plans to open land to interested public and private investors and take an equity stake, while private firms are expected to bring capital and technology. The target implementation period of the initiatives under the discussed PPPs is one to two years, with a focus on large-scale solar projects.

Authorities also plan to introduce a new battery storage system policy with the upcoming budget, backed by incentives for industrial-scale systems of 5-10 MW.

For the upcoming solar energy policy, due to be released in June, the government is also considering incentives such as tax holidays and duty-free imports of solar equipment, following Pakistan’s successful model. According to Bangladesh’s cabinet secretary, Nasimul Ghani, authorities will also accelerate efforts to modernise solar systems and promote domestic equipment manufacturing.

Efforts To Scale Up Solar Already Underway

The government itself is leading the solar power push by example, deploying solar systems in public infrastructure. It has instructed ministries and state agencies, such as the Bangladesh Economic Zones Authority (BEZA), the Roads and Highways Department and the railways and water resources ministries, to identify unused public land under their jurisdiction for the development of renewable energy projects. For example, Bangladesh has already moved to launch a 140 MW solar plant with battery storage, through a PPP on land owned by BEZA in Sonagazi, Feni.  

Authorities have also issued instructions to install solar panels at all deputy commissioner offices across the country this year and roll out solar panels in educational institutions. The government also promised to stimulate rooftop solar installation in cities by removing existing barriers such as weak policy support, high setup costs and complicated equipment import processes. As a result, private investors would be able to install solar panels on commercial and residential rooftops and supply clean power directly to building owners, with bills adjusted through a net metering system. Building owners would be eligible to receive a share of the revenue — a move that has proved successful in neighbouring Pakistan.

Bangladesh Power Development Board Invited Bids to Develop Solar Power Plants

Meanwhile, the Bangladesh Power Development Board (BPDB) has invited international bids to develop 10 grid-tied solar power plants across the country to stabilise regional grids. Bangladesh’s Commerce Minister Khandakar Abdul Muktadir has already sought investments in the domestic solar power sector from Australia, with the latter reportedly recognising significant potential in the country.

However, since no sovereign guarantees to make projects bankable for international lenders have been announced as of the time of writing, the move will test investors’ confidence in the local market. In fact, previous efforts by the interim government, including an attempt by the state-owned utility to attract investors for 55 grid-connected solar projects totalling 5.3 GW between December 2024 and March 2025, have failed.

Bangladesh’s Energy Policy U-Turn Has Set the Stage For a More Resilient Energy System

Prioritising solar power and reducing reliance on costly fossil fuel imports would help Bangladesh advance on its climate goals, improve energy security, strengthen fiscal stability and reduce power costs. Importantly, it would also boost industrial growth and meet the business community’s demand for increased solar power deployment. 

The initial signs are promising, with the government openly acknowledging the limited public support as a key barrier to clean energy development in the country and already taking steps to address it. Recently, the BPDB has issued tenders for three solar power plants in the districts of Chittagong, Rangamati, and Dinajpur, with a combined capacity of 77.6 MW. One of the plants, a 20 MW facility, will be built at the Barapukuria coal-fired thermal power plant site. Another 442 MW solar plant near the 1.32 GW Rampal Power Station is also in the plans and can become Bangladesh’s largest solar installation.

These are symbolic moves, indicating the major shift in the country’s energy policies. The question is whether they would remain one-off responses to the energy crisis or serve as the foundation for a structural transformation to ensure long-term improvements in energy security and affordability through a diversified energy mix — one where solar plays a central role.