Rooftop solar tops 1,000MW, cuts Bangladesh’s daytime power demand by 6%

Including smaller systems below 150kW, total rooftop solar capacity is likely to have exceeded 1,000MW.

Bangladesh’s rooftop solar capacity has surpassed 1,000 megawatts (MW) – more than double the official estimate – cutting daytime electricity demand by up to 6% and emerging as a major source of power despite limited policy support, according to a new study.

A report by the Institute for Energy Economics and Financial Analysis (IEEFA), released today (4 August), estimates that 239 large industrial facilities alone have installed 667MW of rooftop solar, compared with the 418MW officially recorded by the Sustainable and Renewable Energy Development Authority (SREDA) as of June.

Including smaller systems below 150kW, total rooftop solar capacity is likely to have exceeded 1,000MW, it says.

The report attributes the rapid growth largely to rising grid electricity tariffs, which have encouraged businesses to switch to rooftop solar as a lower-cost source of power.

According to the study, Bangladesh’s daytime electricity demand fell by as much as 6% between comparable periods in 2024 and 2026. While milder weather and weaker industrial activity also played a role, rooftop solar was identified as one of the main contributors.

IEEFA says Bangladesh has tapped only a fraction of its distributed solar potential. Industries alone could add several thousand megawatts of rooftop capacity, while installing 30kW solar systems in each of the country’s nearly 87,000 villages could generate more than 2,600MW.

The report also identifies agriculture as a major opportunity. Replacing one-third of Bangladesh’s more than 10 lakh diesel-powered irrigation pumps with solar-powered systems could add around 4,000MW of renewable energy capacity, cut diesel imports by 862 million litres annually and save about $244 million (Tk3,000 crore) a year.

Drawing on the experiences of India and Australia, the report says decentralised energy resources – including rooftop solar, solar irrigation and battery storage – are becoming increasingly important in reducing dependence on costly fossil fuels and large transmission networks.

Despite the sector’s rapid growth, policy and regulatory barriers continue to hamper investment.

The report says recent tax changes have increased the effective tax burden on industrial rooftop solar projects from 1% to 17%, including 15% VAT and 2% advance tax, raising installation costs.

It also highlights delays in grid connections under the net-metering scheme. Although approvals are meant to be completed within 10 to 15 days, developers often face much longer waits, particularly affecting seasonal solar irrigation projects.

Limited access to finance and the absence of comprehensive data on installed capacity are also slowing the sector’s expansion, the report says.

The BNP-led government has set a target of adding 10,450MW of renewable energy capacity by 2030, with 5,500MW expected to come from rooftop solar.

To meet that goal, IEEFA recommends removing taxes on solar equipment, accelerating net-metering approvals through online monitoring, expanding low-cost financing, deploying battery storage and smart meters, and eventually integrating virtual power plants and vehicle-to-grid technologies into the national grid.