As soaring imported fuel costs force the government push for alternative energy, heavy import tariffs on solar power equipment threaten to pull the plug on the sun-powered transition.
Energy sector experts and business leaders warn that high import tariffs on components used in rooftop and distributed solar power systems have become a major roadblock to the sector’s expansion in Bangladesh.
While large, utility-scale solar power projects enjoy full import tariff exemptions, the cost of installing rooftop solar systems is shooting up.
This is driven by heavy duties on essential equipment, including batteries, DC cables, mounting structures, and inverters.
Currently, lithium-ion batteries face a steep effective import tariff of 61.8 per cent. Additionally, import duties stand at 28.73 per cent for solar panels and inverters, 39.75 per cent for solar charge controllers, and up to 61.8 per cent for mounting structures and DC cables.
Hasan Mahmud Khan, managing director of solar equipment importing firm HNBC Industries Limited, told TIMES of Bangladesh that while the government has offered some relief on solar panels, heavy duties on other vital components remain.
“A functional solar system requires much more than just panels. It needs inverters, cables, and various other components,” Khan explained. “If duties on these items are reduced to match the relief given to panels, the entire system will finally become affordable for the public.”
Khan also noted that even though international prices for solar panels have dropped, importers face inflated costs due to Bangladesh’s weight-based customs pricing.
“The government assesses duties based on a fixed price per kilogram, which is often higher than the actual market price. This artificial pricing structure is driving up our total costs,” he said.
This tariff barrier stands in contrast to the current administration’s green energy goals. Since taking office, the BNP-led government has pledged to aggressively scale up renewable energy, setting a target to generate 5,000 megawatts of solar power within the next five years.
As part of this initiative, all government offices have been instructed to install rooftop solar panels.
In May, Energy Minister Iqbal Hasan Mahmud confirmed that directives had been issued to all Deputy Commissioners (DCs) nationwide to enforce the rooftop solar mandate across all government buildings.
Highlighting this push, Prime Minister Tarique Rahman recently inaugurated a 12-megawatt solar project on the roof of the parliament building.
Energy expert Shafiqul Alam emphasised that the high tariff burden falls squarely on distributed and rooftop solar systems, while large, grid-tied utility projects enjoy full waivers.
“These tariffs are mostly applicable to distributed systems,” Alam explained. “Large, grid-based utility-scale projects get full waivers, allowing them to progress relatively smoothly while the rooftop solar sector remains under immense pressure.”
Alam warned that this skewed tariff structure could jeopardize the government’s ambitious long-term goal of generating 10,000 megawatts of solar power.
He argued that the state is prioritising short-term revenue over massive, long-term savings.
“The government collects a one-time import duty on a megawatt of solar equipment, but that same solar installation will save 25 to 30 times its cost by reducing energy imports over its lifecycle,” Alam said.
“The government could easily grant a five-year waiver. Once the sector builds significant capacity, tariffs can be gradually reintroduced,” he added.
Alam also questioned the rationale behind the customs department’s controversial weight-based assessment method.
“There is simply no need for weight-based measurements or complex import calculations. A complete waiver for a specific period is what this sector needs to move forward quickly,” he added.
Industry leaders have mirrored these concerns. During a pre-budget discussion with the National Board of Revenue on 21 April, renewable energy traders pointed out a glaring discrepancy: while the international market price of solar panels sits at roughly $1 per kilogram, customs authorities are valuing imports at an artificial $3 per kilogram.
This inflated valuation significantly drives up the effective cost of bringing solar technology into the country.
