Industrial solar could shield us from global energy shocks

Bangladesh is not directly involved in the Iran conflict, but its effects are already visible from Dhaka’s upscale areas to rural petrol pumps. Anxiety over energy supply is spreading fast, especially among export-driven industries where uncertainty is turning into a serious concern.

This is not new. The 2022 Russia-Ukraine war drove global energy prices up, swelling Bangladesh’s import bill and draining foreign reserves. Inflation surged, and its impact still lingers.

The US-Israeli war on Iran has again exposed Bangladesh’s dependence on imported fossil fuels, mainly from the Middle East. Crude oil prices have risen 23-25 percent, while spot LNG costs have spiked. Since energy fuels every sector, ranging from factories to food, higher costs inevitably push up the price of everything else.

The question, therefore, is unavoidable: how long can Bangladesh afford to rely so heavily on imported energy?

Geopolitical crises in Kuwait, Iraq, and other parts of the Middle East have repeatedly exposed this structural weakness. Yet fundamental reforms in Bangladesh’s energy strategy have remained slow. The country continues to expand fossil-fuel infrastructure while renewable energy still occupies only a marginal place in the power mix.

In this context, expanding locally available renewable energy is no longer just an environmental aspiration – it is an urgent economic necessity. Renewable energy sources are largely immune to geopolitical volatility, making them a strategic shield for import-dependent economies like Bangladesh.

There are already examples within South Asia. Pakistan has significantly expanded its renewable energy capacity in recent years.

By 2025, more than 46 percent of its electricity generation capacity is expected to come from renewable sources. As a result, global fuel price volatility is having a comparatively smaller impact on its energy system.

For Bangladesh, the most immediate opportunity lies not in distant deserts or offshore wind farms — but right above our heads.

By 2025, over 46 percent of Bangladesh’s electricity is expected to come from renewables, cushioning the impact of global fuel price swings. The most immediate opportunity lies on factory rooftops.

Across industrial zones, more than 5,000 factories sit beneath vast concrete roofs. According to the Centre for Policy Dialogue, rooftop solar could generate 5,500 MW, equal to four large coal plants.

For entrepreneurs, the incentives are strong: solar could cut monthly energy costs by 15-20 percent, a major boost for the garment industry that drives over 80 percent of exports.

Net metering already allows users to feed surplus power into the grid, making investments more attractive. Still, progress is slow.

By late 2024, Bangladesh’s solar capacity stood at 1,084 MW, with rooftop systems contributing just 190 MW. Installations have grown nearly 200 percent in a year, but the sector remains far short of its vast potential.

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Since 2009, Bangladesh’s power sector has attracted large private investments thanks to government-backed guarantees like capacity payments, which reassured lenders and fuelled fossil-fuel projects. Rooftop solar, however, receives no such support.

Fossil-fuel infrastructure also enjoys tax breaks: imports for coal plants face duties as low as five percent, while solar panels are taxed between 14 and 28 percent. This imbalance discourages renewable investment.

The upfront cost is another hurdle. A five-MW rooftop system can cost several crores of taka, leaving many factories hesitant without accessible financing. Banks remain cautious about smaller projects.

To bridge these gaps, new models are emerging. Under Capex, factory owners invest directly; under Opex, third-party investors install and operate systems, selling electricity at fixed rates.

The state-owned Infrastructure Development Company Limited (Idcol) – which finances renewable infrastructure projects– has already backed rooftop solar in over 150 factories, but scaling up requires far greater involvement from banks and private investors.

Progress is also slowed by bureaucracy. Entrepreneurs face lengthy net-metering approvals, and utilities often resist connecting solar projects.

Still, success stories prove the potential. Youngone Corporation in Chattogram’s Korean Export Processing Zone has installed nearly 37MW of rooftop solar, enough to power 30,000–40,000 households daily. These examples show rooftop solar is not a dream but a practical solution.

Bangladesh now needs decisive policy action: tax breaks for solar equipment, faster net-metering approvals, accessible financing, and stronger private-sector support. Rooftop solar could quickly stabilize industrial power, cut import dependence, boost export competitiveness, and shield the economy from future energy shocks.

The writer is an independent journalist with eight years of experience covering the energy sector