Energy crisis drives Bangladesh’s shift to local solar production

Bangladesh’s worsening energy crisis and rising electricity costs are driving a growing shift towards solar power, with major local conglomerates investing in the manufacturing and assembly of renewable energy equipment.

At least eight major industrial groups, including Walton, PRAN-RFL, Rahimafrooz, Panna Group, Hamko, Super Star, Rimso and Navana, are expanding into solar-related backward linkage industries, particularly inverters, lithium-ion batteries and electrical components.

The investment comes as the government promotes rooftop solar systems with battery storage. Under a new scheme, the benchmark cost of rooftop solar generation has been set at Tk 8 per unit, while a 20 per cent profit margin and an 11.25 per cent premium have taken the purchase tariff to Tk 10.50 per unit.

PRAN-RFL has started work on a US$1 million solar inverter plant in Palash, Narsingdi, which is expected to begin commercial production within four months. The facility will initially produce 1,000 inverters a month. The group also plans a second $4 million plant in Habiganj.

Walton has invested more than Tk 113 crore in an inverter plant at Chandra, Gazipur, alongside a lithium-ion battery plant scheduled to launch soon.

Nawaz Abdur Rahim, head of sales and marketing at Rahimafrooz Distribution Limited, said consumers were increasingly seeking long-term energy independence rather than temporary backup during load shedding.

CPD Research Director Dr Khondaker Golam Moazzem said greater use of renewable energy could reduce dependence on costly LNG imports and lower industrial costs. He estimated that the RMG sector alone could cut production costs by 15 to 20 per cent through renewable energy adoption.

However, industry leaders warn that high import duties and VAT on solar components remain major barriers to faster expansion.