Bangladesh’s Untapped Urban Opportunity

Bangladesh has one of the world’s most successful stories in solar home system-based rural electrification. More than six million solar home systems have been installed in rural areas, enabling millions of people to gain their first access to modern electricity through solar photovoltaic technology. This achievement demonstrated Bangladesh’s ability to use renewable energy to reach communities beyond the conventional electricity network. Yet, despite this success, the country has not increased its share of renewable energy as significantly as many other countries. The next challenge is to replicate the spirit of the rural solar revolution in Bangladesh’s rapidly growing urban areas.

Urban rooftops offer an enormous opportunity. Residential buildings, commercial establishments, small industries, educational institutions, hospitals and government offices have large unused roof spaces that could generate clean electricity. However, rooftop solar in cities faces challenges that are quite different from those encountered in rural solar home systems.

The most obvious challenge is access to adequate sunlight. High-rise buildings, trees, water tanks, walls, satellite dishes, telecom towers and other structures often cast shadows over rooftops. In densely built-up areas, solar panels may receive direct sunlight for only part of the day. Dust and air pollution can further reduce electricity generation. Therefore, installing panels without properly assessing solar radiation, shading, roof orientation, dust deposition and available space can result in poor performance and discourage consumers.

Another concern is the performance of solar systems installed on major public buildings. Installations at Bangabhaban, the Prime Minister’s Office, Bangladesh Bank buildings, DPDC and other government buildings are expected to demonstrate the country’s commitment to renewable energy. When such systems remain inactive or operate below capacity, however, the investment loses much of its intended purpose. Inadequate maintenance, inverter failures, battery problems, lack of monitoring and unclear institutional responsibility can all contribute to such failures.

Government agencies should therefore treat rooftop solar as an operating energy asset rather than a one-time project. Every installation should have a designated authority responsible for operation and maintenance, regular performance monitoring and prompt repair of faults. Electricity generation and system downtime should also be recorded so that inactive systems can be identified and restored quickly.

Battery management is another major challenge, particularly for systems requiring electricity storage. Poor charging and discharging practices, unsuitable environmental conditions, high temperatures, inappropriate battery sizing and inadequate maintenance can shorten battery life and increase the cost of solar electricity. Bangladesh also needs proper systems for collecting, recycling and safely disposing of used batteries.

At the policy level, the priority should be to make rooftop solar attractive to consumers rather than simply making it mandatory for obtaining an electricity connection. Compulsion may increase installation numbers temporarily, but consumer interest will be stronger if solar provides clear economic benefits. Households and building owners should be able to reduce their electricity bills and receive fair credit or compensation for surplus electricity supplied to the grid.

The direct benefit to rooftop owners is particularly important in urban areas. Those who provide the roof space and invest in the system should receive meaningful financial benefits. Better net-metering arrangements, simplified approval procedures, affordable financing and predictable electricity-credit mechanisms can encourage more households and building owners to participate. Rather than relying on compulsion, Bangladesh should focus on creating a system in which consumers have a clear financial incentive to keep their solar systems operational throughout their useful life. Otherwise, the country risks increasing the number of installed systems without ensuring that they remain productive, leading to more non-performing and non-operational urban rooftop solar systems.

The cost of solar equipment is another significant barrier. Import-duty incentives and other fiscal support should not benefit only large independent power producers (IPPs), renewable energy service companies (RESCOs) and major industries that can import equipment directly. Small industries, households and smaller market participants should also receive these benefits.

A full or substantially reduced import-duty waiver for eligible renewable-energy equipment could be considered for all qualified importers, whether large project developers, small businesses or authorised traders. If traders can import equipment at lower cost, the savings can be passed on to households and small industries through more affordable solar systems. Such a policy could also increase market competition and make renewable energy more accessible. The incentive could be provided for a defined period to accelerate the country’s transition to renewable energy, as has been done in various forms in other countries.

Climate finance should also be used more effectively. Development partners sometimes attach climate-related funds to broader loan projects. Bangladesh needs greater transparency to ensure that climate finance genuinely supports affordable renewable-energy deployment rather than simply being counted as part of conventional development lending. Concessional climate resources should reach households, small businesses and communities where they can generate measurable climate benefits.

Bangladesh should learn from countries where rooftop solar has expanded through consumer-friendly incentives rather than compulsion. Lower equipment costs, simple regulations, accessible financing, net metering, tax incentives and direct economic benefits can create a stronger and more sustainable market. The country has already demonstrated through its rural solar home system program that Bangladeshis will adopt renewable energy when it is affordable, useful and accessible. The same principle should guide the urban rooftop solar revolution.

The way forward is not simply to install more solar systems, but to create a system in which the rooftop owner benefits, the consumer saves, the grid gains clean power and the country reduces its dependence on fossil fuels. With appropriate incentives, transparent climate finance, effective maintenance and reliable technical standards, Bangladesh can transform its vast urban rooftops into a major clean-energy resource.