In late August, Bangladesh announced a range of decisions, including financial incentives and preferential tariffs, to help boost rooftop solar power generation as its efforts to encourage renewable energy production and address the country's energy crisis.

According to a report by state-owned news agency BSS, Prime Minister Tarique Rahman on August 28 said that the government will buy power supplied to the national grid from rooftop solar projects installed within the next six months at BDT10.15 ($0.082) per unit. This means the government will provide an incentive in addition to the bulk rate, Rehman said.

The Prime Minister said that components required for the solar power systems, such as solar panels, inverters and batteries, will attract no customs duty, regulatory duty, supplementary duty, advance tax and an additional 2% advance income tax.

Rehman said the average cost of generating one unit of electricity is BDT6-7, adding that the initiative could create an opportunity for up to 45% profit, including a 40% profit margin and a 5% premium. This incentive programme will be for up to three years.

The government has also unveiled a National Rooftop Solar Initiative to set up rooftop solar systems at government buildings, educational institutions, hospitals and other important establishments, BSS reported.

Rehman said that the implementation guidelines related to the National Rooftop Solar Initiative have already been prepared. 

Distributed energy resource sector takes shape

A recent report by the Institute for Energy Economics and Financial Analysis (IEEFA) shows how distributed energy resources (DERs) can potentially deliver affordable and clean energy. DERs are small-scale power generation and storage technologies, such as rooftop solar, solar irrigation pumps, biogas and batteries, located close to where electricity is used.

In Bangladesh, after a slow start, the DER sector is beginning to take shape, driven largely by industrial interest in rooftop solar. While government data puts installed rooftop solar capacity at 418.1 megawatts (MW) through June 2026, the IEEFA note finds that combined capacity across just 239 establishments, including groups of companies, has already reached 667 MW, and could be as high as 1,000 MW if smaller units (of less than 0.15 MW) are included. This growth appears to have contributed to a slight reduction in daytime power demand.  

“Compared to the grid-scale variable renewable energy capacity of 859 MW as of June 2026, the country’s growing rooftop solar capacity provides an encouraging signal for Bangladesh’s power sector. The rooftop solar sector is expected to grow further, with engineering, procurement, and construction (EPC) companies holding a project pipeline of more than 500 MW. However, Bangladesh needs to scale up efforts to tap into the potential of several thousand MW of rooftop solar capacity that the industry sector alone offers,” says Shafiqul Alam, Lead Analyst, Bangladesh Energy, IEEFA - South Asia, and a co-author of the briefing note.

Bangladesh's diesel-dominated irrigation sector also offers vast opportunities for solar-powered generation, with a one-third transformation of the sector potentially cutting the country's annual diesel import bill by around $244mn.  

However, there are challenges. IEEFA says that despite the fixed timeline of 10–15 days for approving the application for net metering connections, both rooftop solar and solar irrigation projects encounter delays in obtaining net metering connections, affecting the growth of DER in Bangladesh. The note, therefore, recommends that the Sustainable and Renewable Energy Development Authority (SREDA) and the Ministry of Power, Energy and Mineral Resources should monitor the status of online applications for net metering connections and undertake measures to avoid delays in approval.  

Another recent report attests that rooftop solar systems would be a right solution to address the country’s energy shortages. A report by ScienceDirect, which was also released in August, says that Bangladesh’s rapidly increasing energy demand requires a solution that is sustainable, reliable and cost-effective and rooftop solar microgrids are a technically and economically promising pathway for the South Asian country’s distributed renewable-energy transition.

The ScienceDirect report also argues that there is enough evidence to suggest that Bangladesh possesses significant resources, strengthening technological readiness and supportive policy developments that collectively enhance the long-term feasibility of rooftop photovoltaic deployment. Continuous advancements in solar PV technologies, including higher-efficiency modules, bifacial and half-cut cell designs, and improved inverter and monitoring systems, have significantly increased system performance and energy yield from limited rooftop spaces, the report stated.

At the same time, there has been a sharp reduction in PV module prices and overall system costs have decreased, enhancing the economic viability of rooftop solar microgrids and making them increasingly competitive with power supplied by the standard grid. From a financial perspective, rooftop solar systems offer significant benefits such as reduced electricity costs, long-term energy price stability, and improved energy independence. However, successful large-scale implementation still requires addressing key challenges, including infrastructure readiness, grid integration issues, financing constraints, and vulnerability to extreme weather conditions.