Bangladesh, a country with a population of over 180 million, is currently facing an energy crisis.
The country’s electricity supply is entirely dependent on fossil fuels, which can only meet half of the total demand.
As a result, a large part of the country remains without electricity, and the rest is supplied through load-shedding. This not only disrupts daily life but also hinders economic growth.
Solar Energy offers a sustainable and viable solution to address the electricity shortage.
Bangladesh receives abundant sunlight for extended periods. With an average of 6.7 kWh/m² of solar irradiation per day, the country has the potential to lead in solar energy.
The government, recognizing this potential, has set ambitious targets to achieve 4,100 MW of clean energy by 2030, of which 2,277 MW will come from solar, and 40% clean energy by 2041.
This is not just about meeting electricity needs; it’s about building a brighter future for millions of people.
For foreign investors, this presents a transformative and profitable investment opportunity free from uncertainty.
By investing in Bangladesh’s solar sector, you can help light up homes, power industries, and drive economic growth. You can be part of a movement toward sustainability and prosperity.
This blog post highlights the potential for investment in Bangladesh’s solar power sector, covering current status, government policies, market potential, successful projects, investment environment, challenges, and comparisons with neighboring countries.
Why Invest in Solar Power?
Content Overview
Bangladesh’s solar power sector presents an attractive opportunity for foreign investors.
The country receives an average of 6.7 kWh/m² of solar irradiation per day, making it ideal for solar power generation.
The government has set targets to achieve 30% renewable energy by 2030 and 40% by 2041, with solar power playing a crucial role in meeting these goals.
Financial Incentives
Investors can benefit from 15% VAT exemption, 5-year tax holiday, and easy financing through the Green Transformation Fund. Net metering policies also encourage the installation of rooftop solar panels.
Market Potential
Bangladesh’s solar power market is expected to grow from 0.76 GW in 2025 to 3.9 GW by 2030, with a CAGR of 38.6%. The country’s population growth and economic development are driving electricity demand, increasing by 4.68% annually.
Challenges
Policy instability and high costs pose risks for investors, but the government is implementing reforms to address these issues.
Current Status
As of 2025, Bangladesh has a total renewable energy capacity of 650.53 MW, with solar power contributing 416 MW. The largest solar power plant is the Beximco Gaibandha Solar PV Park with 275 MW, commissioned in 2023. Another major project is Teesta Solar Limited with 200 MW, operational since 2023.
Bangladesh operates the world’s largest off-grid solar program, providing electricity to 11% of its population. This includes 1,000 solar irrigation pumps and 21 independent solar mini-grids, serving nearly 4 million households.
Table 1: Major Solar Power Plants in Bangladesh
| Project Name | Capacity (MW) | Location | Year of Commissioning |
|---|---|---|---|
| Beximco Gaibandha Solar PV Park | 275 | Rangpur | 2023 |
| Teesta Solar Limited | 200 | Gaibandha | 2023 |
| Teknaf Solar Park | 28 | Cox’s Bazar | Proposed |
| Sutia Solar Park | 50 | Mymensingh | Proposed |
| Sunamganj Solar Park | 32 | Sunamganj | Proposed |
Government Policies and Incentives
The Bangladesh government has introduced various policies and incentives to attract investment in renewable energy, particularly solar power. These include:
- Tax Exemptions: 15% VAT exemption on renewable energy equipment and raw materials, and tax holidays for up to 5 years for solar project investors.
- Capital Grants/Subsidies: SEDA provides grants for establishing solar, wind, and biomass projects.
- Financing Mechanisms: Public/private sustainable energy investments are supported by grants, subsidies, and carbon/CDM funds.
- Net Metering: Policies allowing rooftop solar systems to sell excess electricity back to the grid.
- Green Transformation Fund: Offers low-interest loans for renewable energy projects.
- Public-Private Partnerships: Encourages joint ventures and partnerships for renewable energy development.
The government aims to achieve 30% renewable energy by 2030 and 40% by 2041, providing a strong foundation for solar power investment.
Market Potential
Bangladesh’s geographical location and high solar irradiation make it ideal for solar power generation. The country receives an average of 4.5 kWh/m² of solar irradiation per day. Research indicates that Bangladesh has a solar power potential of 50,174 MW, which could meet nearly 80% of the projected 60,000 MW electricity demand by 2041.
The solar power market in Bangladesh is expected to grow from 0.76 GW in 2025 to 3.9 GW by 2030, with a CAGR of 38.6%. Population growth and economic development are driving electricity demand, increasing by 4.68% annually. The government’s focus on reducing dependence on imported fuels further enhances the sector’s attractiveness.
Table 2: Growth of Bangladesh’s Solar Power Market
| Year | Capacity (GW) | CAGR (%) |
|---|---|---|
| 2025 | 0.76 | – |
| 2030 | 3.9 | 38.6 |
Successful Solar Power Projects
Bangladesh has several successful solar power projects that demonstrate the potential for investment in this sector. Notable projects include:
- Teesta Solar Limited: A 200 MW project in Gaibandha, commissioned in 2023, crucial for addressing power shortages in the northern region.
- Beximco Gaibandha Solar PV Park: The largest solar power plant in Bangladesh with 275 MW, connected to the national grid in 2023.
- Solar Home System Program: The world’s largest off-grid solar program, providing electricity to over 20 million people.
- Utility-Scale Solar Farms: Projects like Teknaf Solar Park (28 MW), Sutia Solar Park (50 MW), and Sunamganj Solar Park (32 MW) are contributing to the country’s solar infrastructure.
Investment Environment
Bangladesh is actively seeking foreign investment in its renewable energy sector. The government offers similar incentives for foreign and domestic private investors, with minor formal differences. The Mujib Climate Prosperity Plan aims to attract $80 billion in foreign investment for environmentally sustainable projects, including renewable energy, by 2021.
Challenges and Risks
While there are opportunities, investors should be aware of challenges such as:
- Policy Instability: Government policy changes, such as the cancellation of Letters of Intent for 1,111 MW solar projects in 2019, pose risks.
- High Costs: Solar power costs in Bangladesh are among the highest in Asia, at 120 Taka/Watt, compared to India (11-12 Taka/Watt) and Pakistan (11-12 Taka/Watt).
- Governance Issues: Governance and policy instability can create risks for investors.
- Infrastructural Challenges: Weak infrastructure, such as transportation and grid systems, can hinder project construction and operation.
Comparative Analysis
Compared to India and Pakistan, Bangladesh’s solar power sector is growing rapidly. India has 11.5 GW of solar capacity, while Pakistan has 1.2 GW. However, Bangladesh added 1.1 GW of solar capacity in 2021-2022, higher than India (1.1 GW) and Pakistan (zero).
Conclusion
In conclusion, Bangladesh’s solar power sector offers unique opportunities for foreign investors. The country’s rapidly growing economy, government incentives, and high solar potential make it an attractive destination. However, challenges such as policy instability, high costs, and infrastructural issues need to be addressed.
Key Citations
- EnergyTracker Solar Energy in Bangladesh Current Status and Future
- Mordor Intelligence Bangladesh Solar Energy Market
- Bangladesh Power Development Board Official Website
- World Bank Bangladesh Solar Home Systems Provide Clean Energy
- The National Bureau of Asian Research Building Renewable Energy in Bangladesh
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