Bangladesh’s ambitious renewable energy transition could be thrown off course unless the government broadens the scope of proposed budget incentives, the Bangladesh Sustainable and Renewable Energy Association (BSREA) warned on Sunday, arguing that the benefits are currently designed for a narrow group of companies rather than the wider clean-energy market.
Addressing a press conference at the Dhaka Reporters Unity (DRU), BSREA leaders welcomed the tax and duty incentives announced in the proposed FY2026�"27 national budget but voiced deep concern that the existing framework would leave the overwhelming majority of renewable energy stakeholders outside the support net.
“Under the current SRO framework, only around four to five per cent of market participants are likely to benefit from the announced incentives,” BSREA leaders said, warning that the policy could inadvertently slow the growth of Bangladesh’s solar sector at a time when the country is striving to accelerate its clean-energy transition.
BSREA President Mostafa Al Mahmud said the incentives are largely targeted at a limited segment of electricity consumers accounting for only 20�"22 per cent of national power demand. Without urgent revisions to the Statutory Regulatory Order (SRO), he cautioned, Bangladesh would face serious difficulties in achieving its renewable energy goals for 2030.
“The RESCO model may work for large industrial consumers, but it offers little benefit to households, farmers and rural communities,” Mahmud said.
The association argued that Bangladesh’s renewable energy industry has been built over the years by a vast network of importers, distributors, dealers, retailers and Engineering, Procurement and Construction (EPC) firms. Yet, many of these businesses have been left outside the incentive regime, creating uncertainty for thousands of enterprises and jobs linked to the sector.
According to BSREA, while solar projects operating under power purchase agreements stand to receive tax and duty benefits, ordinary citizens investing in rooftop solar systems, solar irrigation projects, IPS backup solutions and off-grid solar installations will continue to purchase equipment at full market cost without similar support.
The organisation also criticised the budget for overlooking critical sectors such as solar irrigation, solar street lighting and Battery Energy Storage Systems (BESS), despite the country still relying on nearly 1.7 million diesel-powered irrigation pumps.
“There is no clear roadmap or meaningful financial incentive to accelerate the transition from diesel to solar-powered irrigation,” the association noted.
BSREA further argued that the revised NBR SRO overwhelmingly favours selected solar power producers and companies operating under the Renewable Energy Service Company (RESCO) model, while residential users, small businesses, distributors, dealers and EPC companies remain largely excluded.
The industry body also expressed disappointment over the absence of reforms in customs valuation practices. It reiterated its longstanding demand for replacing the current weight-based assessment system with the internationally accepted transaction-value method, saying inflated customs valuations continue to raise project costs and discourage investment.
Another major concern is the government’s decision to limit duty exemptions on mounting structures, lithium cells, battery packs and BESS equipment until June 2028, a move the association fears could undermine long-term investment planning in the sector.
In one of its starkest warnings, BSREA said Bangladesh may achieve only 2,000 to 3,000 megawatts peak (MWp) of solar capacity by 2030 if the current incentive structure remains unchanged�"far short of the national target of 10,000 MWp.
By contrast, opening zero-duty and tax benefits to all renewable energy businesses, importers, distributors and EPC firms could dramatically accelerate solar adoption nationwide. BSREA estimates that utilising just a quarter of available rooftop space in Dhaka and other divisional cities could generate between 6,000 and 8,000 MW of solar power within the next four years.
To unlock that potential, the association called for equal duty exemptions on all renewable energy equipment, including solar panels, inverters, battery storage systems, mounting structures, cables, connectors and smart meters. It also urged the government to introduce a minimum 10-year tax holiday, income tax exemptions and broader incentives for residential and agricultural users.
“Renewable energy is not a privilege for a specific business group; it is a cornerstone of national energy security,” Mahmud said. “The incentive framework must be inclusive, accessible and beneficial to all stakeholders if Bangladesh is to achieve its clean-energy ambitions.”
