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Solar system expansion slow

Published : 28 May 2022 09:58 PM | Updated : 28 May 2022 10:19 PM

The expansion of the country’s solar power system is moving at a slow pace as equipment costs have escalated by around 25 percent recently. 

Stakeholders said higher panel and inverter prices are driving up total EPC costs. The costs are also driving up due to rising US dollar exchange, as shipping costs soar due to the lingering impact of the pandemic. 

The government has taken various initiatives to enhance generation of renewable energy as part of its efforts to ensure energy security keeping carbon dioxide emissions at a low level. Bangladesh is now generating around 790 MW of electricity from renewable sources. 

It has set a target to generate 40 per cent of total electricity from renewable energy by 2041. That is why the government is encouraging everyone to generate electricity from renewable energy. 

Bangladesh Solar and Renewable Energy Association (BSREA) is the largest association of business houses and NGOs working for promoting the clean energy industry in Bangladesh. 

Md. Irfanul Haq Bhuyain, Joint secretary of the BSREA told Bangladesh Post that the price of solar equipment has increased by about 25 percent. As a result, both the trader and the customer are suffering, which has somewhat hampered the rapid expansion of solar power systems across the country. Some very small projects are being implemented. But most large or medium projects are having problems in implementation. 

These projects were finalised and contracted a few months ago. But suddenly, the price of solar equipment has gone up and everyone is in trouble. Many are also delaying the start of new projects - in the hope that prices will drop.

“Earlier, the shipping charge for 40-feet HQ containers was $1,500 to $1,800, which has now increased to $8,000 to $10,000. Imports costs have risen by 5-6 percent due to the rise in the value of the dollar. The government has increased VAT on inverters from 11 percent to 36 percent. Solar equipment prices have also risen in China. Prices of cables and other accessories have also gone up locally. This price increase is having a negative impact on this sector,” he added. 

Engineer Mahfuzur Rahman, Chief Executive Officer (CEO) of MR. Engineers told Bangladesh Post “The price of the solar system had come down along with its efficiency increase. As a result, the people of the country were showing interest in using this environmentally friendly green energy. But with the recent hike in the price of solar power equipment, interest among many has waned. As a result, a few projects are being implemented at present, which was finalized earlier. However, there is very little work on new projects.”

“Although many of our clients are finalizing on setting up large and medium projects, many of them are now showing less interest due to rising prices. Again, the profit margin is very low in the projects that are going on,” he added. 

Rahman further said that the government has a lot of success with solar power, and has also taken various steps to expand green energy. Therefore, the price of solar products should be kept at an affordable limit. If necessary, the government will have to temporarily waive the import duty in this sector as well as give incentives.

So far, around six million Solar Home Systems (SHS) have been set up in remote areas across the country, which is currently directly and indirectly benefiting about three crore disadvantaged rural people. This is the largest and most globally renowned Solar Programme.

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