In quest of green: rooftop solar power
In the face of energy price spikes, supply disruptions, and deteriorating fiscal conditions since Russia’s invasion of Ukraine in 2022, Bangladesh stands at a critical juncture.
A recent report from the Institute for Energy Economics and Financial Analysis (IEEFA) sheds light on an untapped solution that could not only alleviate the energy sector’s challenges but also save up to $1 billion annually – rooftop solar.
The report proposes six key levers to accelerate the widespread deployment of rooftop solar: Raising awareness, streamlining finance, policy and regulatory intervention, quality assurance, business models for utilities, and capacity development for key stakeholders.
One of the major hurdles identified is information asymmetry and a lack of capacity among stakeholders.
To address this, the Sustainable and Renewable Energy Development Authority (Sreda) should design targeted capacity development and awareness programs. Exposure visits to successful projects can provide invaluable insights for stakeholders.
The report suggests a credit risk guarantee scheme to minimize financial institutions’ perceived risks and increase fund flows to projects.
Additionally, a first-loss guarantee can address challenges faced by engineering, procurement, and construction companies linked to repayment from industries and building owners.
While acknowledging the Bangladesh Bank’s green refinancing scheme, the report points out its limitations.
It suggests pre-approving financing for rooftop solar projects based on an initial assessment to eliminate uncertainty and facilitate access to the low-cost scheme.
To enhance funds, the report recommends local financial institutions explore multilateral agencies, international climate finance, and the local bond market.
Incentives for the sector include waiving prevailing import duties on solar panels and accessories for a limited period and fixing rooftop solar installation capacity to 100 per cent of the sanctioned load.
The role of utilities in expanding rooftop solar deployment is crucial. Both utility- and third-party-owned business models can incentivise utilities to multiply their efforts in the sector.
Combining the rooftop solar potential of different zones can signal financial institutions on the aggregate investment required.
Bangladesh has a unique opportunity to transform its energy landscape, reduce dependence on fossil fuels, and secure economic benefits through the widespread adoption of rooftop solar.
Policymakers, regulators, and industry stakeholders must unite to implement the recommendations outlined in the IEEFA report, unlocking the full potential of solar energy and securing a sustainable energy future for the nation.
