Bangladesh stands at a critical crossroads in its energy journey. On one side lies a future marked by rising electricity demand, mounting fuel import costs, pressure on foreign exchange reserves and increasing climate vulnerabilities. On the other stands an unprecedented opportunity to transform the country’s energy system through renewable energy.
Renewable energy is no longer an environmental aspiration. It is an economic necessity and central to energy security, industrial competitiveness, foreign currency savings, sustainable development and Bangladesh’s long-term climate commitments.
The proposed National Budget for FY2026-27 has signalled greater support for renewable energy. This policy direction deserves appreciation. However, the effectiveness of any incentive ultimately depends on whether it benefits the entire renewable energy ecosystem or only a limited segment of the market.
If tax and duty incentives remain accessible only to a narrow group of businesses or specific business models, Bangladesh will struggle to achieve the large-scale energy transition it urgently needs. Renewable energy policy must serve all stakeholders, including households, farmers, small businesses, industries, EPC companies, investors, importers, distributors and technology providers alike.
More than 60 per cent of Bangladesh’s electricity consumers belong to the residential, agricultural and small commercial sectors. Yet current incentive structures offer limited direct benefits to these consumers. As a result, the country’s largest potential market for renewable energy remains underutilised.
A successful energy transition cannot be driven solely by a handful of utility-scale projects. Around the world, renewable energy growth has been driven by millions of households, businesses, farms and commercial establishments making independent investments in clean energy technologies.
If equal tax and duty benefits are extended across the renewable energy value chain, including solar modules, inverters, battery storage systems, mounting structures, DC cables, smart meters and related equipment, millions of Bangladeshis will be empowered to participate directly in the country’s clean energy transition.
Consumers should have the freedom to choose whichever model best suits their needs, whether through direct ownership (CAPEX) or third-party financing (OPEX/RESCO). Public policy should encourage competition, innovation and consumer choice rather than favouring one model over another.
Bangladesh’s renewable energy future cannot depend exclusively on large power plants.
Distributed Renewable Energy (DRE), rooftop solar systems, solar irrigation, solar-powered commercial facilities and community energy solutions must become central pillars of the country’s energy strategy.
The potential is enormous. With appropriate fiscal incentives and supportive policies, rooftop solar installations alone could contribute several thousand megawatts of additional electricity generation by 2030. Thousands of factories, commercial buildings, educational institutions, hospitals and residential complexes have unused rooftop space capable of producing clean and affordable electricity.
Likewise, Bangladesh still operates nearly two million diesel-powered irrigation pumps. Accelerating their transition to solar-powered irrigation would reduce fuel imports, lower agricultural production costs and improve energy security simultaneously.
These opportunities remain largely untapped.
It is important to acknowledge that the current administration did not create many of the structural challenges facing Bangladesh’s renewable energy sector today. Years of policy uncertainty, implementation delays, financing constraints and market barriers have contributed to the present situation.
However, history rarely judges governments based on the problems they inherit. It judges them based on their ability to solve those problems.
The current government therefore has a historic opportunity.
It can position Bangladesh as a regional leader in clean energy and create a modern, competitive and resilient energy system. But if policy distortions continue to restrict market participation and slow renewable energy deployment, achieving national energy and climate targets will become increasingly difficult.
Bangladesh’s renewable energy ambitions require more than symbolic commitments. They require bold and inclusive policy actions.
Key priorities should include equal tax and duty incentives across the renewable energy value chain, strong policy support for rooftop solar and distributed renewable energy, dedicated incentives for solar irrigation and rural electrification, long-term low-cost financing mechanisms, improved payment security and investment protection frameworks, equal opportunities for both CAPEX and OPEX business models, a transparent and competitive market environment, and full implementation of the principle: “Renewable Energy for All, Not for a Few.”
Bangladesh’s energy security, industrial growth, foreign exchange stability and climate commitments depend on decisions being made today.
The world will not wait. Technology will not wait. Investment will not wait.
The question is simple: will Bangladesh become a leader in the global energy transition, or will it continue to fall behind while others move ahead?
Renewable energy is not a privilege for a select few. It is a national imperative and a right that should be accessible to every citizen, farmer, entrepreneur and industry across Bangladesh.
The author is the President of Bangladesh Sustainable and Renewable Energy Association (BSREA) and the Chairman & CEO of Gtech Solution Ltd. Views expressed in the article are solely those of the author.
