On a humid mid-afternoon in Dhaka, the sun beams down on a city of crowded rooftops, narrow lanes, and a population always hungry for power. As power cuts linger and fuel prices soar, a new hope pierces through the haze: solar energy.
A recent report suggests that the humble solar panel is about to become Bangladesh’s cheapest source of electricity. If that turns out true, it could reshape the nation’s energy future — and perhaps its destiny.
Catching The Light: The New Report And Its Promise
According to a Dhaka Tribune summary of a BloombergNEF (BNEF) analysis, Bangladesh stands on the cusp of an energy transformation. The report argues that utility-scale solar in Bangladesh—already competitive with new coal and gas plants—is projected to become the cheapest way to generate electricity by 2025.
Today, the levelized cost of electricity (LCOE) for new solar projects is estimated at $97 to $135 per megawatt-hour, in comparison to $88 to $116/MWh for gas (CCGT plants) and $110 to $150/MWh for coal.
The BNEF authors believe that continued reductions in solar and battery costs will further tilt the scale: by 2030, solar paired with storage will undercut even existing fossil fuel plants.
Why is this shift so significant? Because Bangladesh currently leans heavily on fossil fuel imports—especially LNG and coal—and each new thermal plant burdens the country with fuel risk, foreign exchange pressures, and emissions concerns. Retrofitting thermal plants for hydrogen or ammonia may sound futuristic, but the economics of new solar look more robust.
Still, numbers and models rarely tell the full story. Let’s peer deeper into how this might unfold — and what could stand in the way.
Solar In Action: Lives, Factories, And Rooftops
The promise of solar is more than just numbers. In Bangladesh, it’s already changing lives — from remote villages to industrial zones.
A Reuters investigation describes how rooftop solar has become a game changer for businesses. One kilowatt-hour from rooftop systems now costs roughly 4 taka (US$0.04), compared to 8–11 taka per unit from the grid, for certain commercial users. That means lower bills today and protection against volatile fossil fuel prices tomorrow.
In rural areas, the tale is even more inspiring. Bangladesh’s expansive solar home systems programme—arguably one of the world’s largest—has brought power to over 4 million off-grid households, touching 20 million lives. Families use solar lights to study at night, power small businesses, and escape reliance on kerosene.
In the industrial sector, studies indicate that factories adopting solar PV systems can cut operational costs significantly. And in a sign of growing investor interest, India’s Amara Raja Group recently won a $130 million contract to build a 100 MW solar plant in Bangladesh.
Together, these stories suggest that solar is already more than theory — it is actively rewriting Bangladesh’s energy narrative.
Navigating The Shadows: Challenges Ahead
But the path to a solar future is littered with challenges, regulatory puzzles, and practical snags.
Rooftop Capacity And Timelines
In June 2025, Bangladesh’s interim government ordered that public buildings like schools, hospitals, and colleges must host solar panel installations. Yet, the ambition is steep: a target to install 3,000 MW of rooftop solar by December 2025. Critics warn that this is overly aggressive. From 2008 through mid-2025, only about 245 MW of rooftop solar had been installed—a ramp-up of over 12 times would be required to meet the new goal. Also, many public buildings lack the sanctioned load that supports such installations.
Grid Stability And Integration
Solar is intermittent by nature. As its share grows, the national grid will need reinforcement, smart demand management, and storage solutions. In Bangladesh’s draft energy plan, critics say renewables are under-emphasized, while costly, speculative technologies like hydrogen or carbon capture get undue attention.
Financing, Incentives, And Tax Regime
Financing green energy in Bangladesh remains tricky. Even though renewable energy is increasingly competitive, interest rates, risk perceptions, and capital costs hamper wide deployment. Recently, though, the government proposed slashing import tax on solar panels from 37% to just 1%, a move that could lower upfront costs substantially.
Land Constraints And Spatial Tradeoffs
Bangladesh is among the most densely populated nations. Finding land for large-scale solar parks is difficult. Rooftop systems mitigate this, but scale is still constrained. For centralized solar, balancing land use for agriculture, habitation, and ecology is delicate.
Institutional Capacity And Governance
Implementation demands technical capacity, monitoring, transparent auctions, and consistent policy. Institutional gaps—regulatory uncertainty, weak enforcement, and interagency coordination—pose real risks.
The Most Important Fulcrum: The 4th Point — Land And Retrofit Risk
Amid these barriers, perhaps the most pivotal is the risk of doubling down on thermal power under the assumption of future conversion (the so-called retrofit gambit).
According to BNEF, many policymakers envision coal or gas plants being converted to hydrogen or ammonia combustion after 2030. But their modeling suggests that such retrofits will almost always remain costlier than building new solar capacity from scratch.
This is a critical insight. If decision-makers continue approving new fossil fuel plants today on the promise of clean fuels tomorrow, they risk locking the country into stranded assets—plants that never pay off.
That would saddle Bangladesh with significant financial and environmental burdens. In contrast, accelerating solar deployment now ensures that future energy growth aligns with low-carbon paths rather than costly legacies.
In other words: the choice is not simply between solar or thermal. It’s between a clean, forward-looking trajectory or an expensive gamble on retrofits that may never come. The stakes are high — and the clock is ticking.
Toward A Radiant Horizon
Imagining a Bangladesh powered by sunlit grids, humming factories, and brighter rural homes may seem ambitious. Yet the signs are already in motion. Solar’s cost curve continues to drop, livelihoods are being reshaped in off-grid villages, and public institutions are waking to the potential.
Momentum is building: investors are stepping in, tariffs for new solar projects are tightening, and tax reforms lighten the upfront burden. Still, ambition must be tempered with prudence. A sound rollout necessitates clear policy alignment, capacity building, grid reform, and risk mitigation.
The image that lingers in my mind is simple: a rooftop in Dhaka, once dark and unused, now dotted with panels bathing rooms below in renewed energy. A student studies by LED light long after dusk; a hospital runs critical machines seamlessly; a small business in a narrow alley hums with new possibility.
Bangladesh may be stepping into its solar dawn. The trajectory is not guaranteed; the journey requires careful turns. But with clear direction, courage, and cooperation, the sun may indeed become not just affordable — but indispensable.
Sources:
Dhaka Tribune
Reuters
