The bustling market in Dhaka has emerged as a focal point for Bangladesh’s energy transition. Narrow aisles filled with shoppers and delivery personnel showcase numerous small shops stocked with solar panels and batteries. Monju Hossain, a sales representative for Dongjin Group Bangladesh, reported a significant surge in sales, with a 50 per cent increase in recent months compared to the previous year. This rise in demand is attributed to the ongoing energy crisis affecting households and businesses, prompting them to seek alternatives to an increasingly unreliable power grid.

Hossain noted that the worsening blackouts in Bangladesh have intensified the need for solar equipment. “The blackouts have worsened, which has increased the demand for our products,” he stated from his shop located on the second floor of Kaptan Bazar. The demand from industrial clients has notably increased, as they require consistent power to maintain factory operations.

This market scene reflects how the energy challenges stemming from the Middle East are accelerating the transition away from fossil fuels in developing nations. Countries such as the Philippines, Pakistan, and Nigeria are also turning to solar energy and batteries to manage utility costs or ensure a reliable power supply.

Impact of Energy Crisis on Bangladesh

Bangladesh, with a population of 180 million, has been significantly affected by disruptions in energy supplies from the Persian Gulf. In 2023, load-shedding, or rolling blackouts, has extended to as much as 18 hours a day in certain regions due to a drastic reduction in liquefied natural gas (LNG) exports from Qatar, previously the country’s main supplier. To address the shortfall, Bangladesh has resorted to purchasing LNG on the spot market, which is approximately three times more expensive than its contracted rates, leading utilities to increase electricity prices.

The combination of rising costs and frequent power outages is driving consumers towards renewable energy solutions. Reports indicate that even Prime Minister Tarique Rahman has installed solar panels on his residence. An informal survey conducted at Kaptan Bazar revealed that every shop has experienced varying degrees of increased demand for solar products.

The decline in the cost of solar panels and batteries in recent years has made these technologies more accessible to average households, stimulating sales not only in Dhaka but throughout the country. Imports of solar equipment from China have more than doubled, reaching approximately $140 million from March to September this year compared to the previous year.

Government Initiatives and Future Prospects

Panels manufactured by Chinese companies like Jinko Solar Co. and Longi Green Energy Technology Co. are particularly favoured due to their affordability and reliability, according to local retailers. The cost of a 750-watt solar panel, sufficient for an average household, is around 15,000 taka ($121), which is significantly lower than the annual electricity bill of approximately 38,000 taka. Although the initial investment for a complete solar setup, including batteries, can be substantial, it is expected to be recouped within a decade for most families.

In September, the government reduced import tariffs on solar equipment, supporting its ambition for renewables to constitute 20 per cent of the energy mix by 2030 and 30 per cent by 2040, a significant increase from just 2.5 per cent last year. Authorities believe that expanding clean energy sources will diminish the country’s vulnerability to future energy crises, as stated by Shafiqul Alam, a lead analyst at the Institute for Energy Economics and Financial Analysis.

Despite the positive trends, the transition to solar energy may primarily benefit higher-income households that can afford upfront costs. Some experts suggest that models similar to India’s capital subsidy programme could assist lower-income groups in adopting solar technology. Abdul Hakim, managing director of Excellent Ceramics Industries Ltd., reported a growing interest in solar energy, with plans to expand into the energy sector by providing solar panels and batteries.

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