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Encouraging growth of solar home system in Bangladesh

To be able to facilitate more off-grid population, the authorities will have to interact with all stakeholders to strike a fine balance between import and local production of solar  panels and other necessary kits, writes Wasi Ahmed 

It is heartening to see that the country has struck a breakthrough in the use of renewable energy. Bangladesh is now a big name in the use of Solar Home Systems (SHS) -- an important segment of renewable energy, which has been acclaimed as the largest off-grid renewable energy programme in the world. This has been revealed in a recent report of the Paris-based energy think-tank, REN21. According to the report, as of 2016, more than six million SHS and kits were in operation worldwide, with 25 million people benefiting from them. Bangladesh, the largest SHS market worldwide, now has more than four million units installed.

This by all means is a laudable achievement. Infrastructure Development Company Ltd (IDCOL) Bangladesh, the main entity to run the initiative, started the SHS programme in early 2003 to meet basic electricity needs of the off-grid rural people as well as supplement the government's vision of ensuring access to electricity for all citizens of by 2021. Up to October 2016, about 4.1 million SHSs have been installed under the programme in the remote areas where electrification through grid expansion is challenging and costly. Thus the programme has ensured supply of solar electricity to 18 million people i.e., 12 per cent of the country's total population who previously used kerosene lamps for lighting purpose. IDCOL has a target to finance six million SHS by 2021 with an estimated generation capacity of 220 MW of electricity. The multi-donor funded programme has proved highly beneficial, especially in the far-flung off-grid locations, including among others the char areas where grid connectivity is too remote a dream for the people. As per the energy and power ministry data, currently, 2.86 per cent of all power generated in the country comes from renewable energy, including solar power.

The REN21 report lauded the role played by micro-credit schemes in Bangladesh for helping the growth of SHS consumption. "Markets for both mini-grids and stand-alone systems are evolving rapidly.  Bangladesh, with four million units installed, has the largest solar home system market using mainly micro-credit schemes," said the report. The REN21 report noted that mini-grids and stand-alone energy systems are evolving rapidly, as does the growth of pay-as-you-go business models supported by mobile technology.

That solar home systems have done a miracle in vast swathes of off-grid regions is a reality not many of the people living in the urban locations are aware of. Most of the char and island locations and low-lying haor areas are benefiting hugely from the technology. While initially, for most users, installation of SHS was meant to have their houses well lit, the technology soon emerged to change their life style by adding value to their economic life, catering for critical needs such as irrigation among others. Small businesses, hitherto unthinkable in those locations, are evolving with the support of innovative technology.

The spectacular growth of the SHS market in Bangladesh is awe-inspiring. It has been gathered that in 2012, investment in solar companies was to the tune of only $3 million, and by 2015 investment rose to $158 million, and in 2016 to a staggering $223. With the momentum on, SHS is highly likely to reach out to increasing the number of the population in the near future. Currently, the country has around 38 per cent of the population without access to electricity. With grid connectivity growing as a result of the newly installed power stations, a sizeable population in remote areas will still remain off-grid. This is where SHS is to fill in the gap.

Under the prevailing situation, there is definite logic to help expand the SHS market in the country. With the mechanism in place and benefits visible, it's only a matter of time to see its all-round positive impact. In this context, the decision of the government to withdraw 10 per cent import duty on solar panels proposed in the 2017-18 national budget will hopefully provide the required boost. However, there seems to be a lack of harmony in imports and local production. The local manufacturers want a considerable gap in import pricing through import duties so that investment made in the sector can be secured. There is thus the need to assess the ground reality, especially the domestic manufacturers' capacity to meet the growing demand as well as the quality of their products. To be able to facilitate more off-grid population, the authorities will have to interact with all stakeholders to strike a fine balance between import and local production of panels and other necessary solar kits.

There is an equally important issue that needs to be addressed. It has been reported that in many rural areas where the locals have put in their money for installation of solar panels are now in a tricky situation as some of those locations are being brought within grid connectivity. There is thus a critical need for harmony in government planning in this regard.