Bangladesh has introduced a new incentive program designed to promote rooftop solar power systems equipped with battery storage, aiming to alleviate the country’s escalating energy shortages and reduce reliance on imported fossil fuels. The initiative comes amid one of the worst power crises in recent years for the South Asian nation of approximately 175 million people.

According to a government notification, consumers who install eligible rooftop solar systems by February 28, 2027, will receive a feed-in tariff of 10.50 taka (about $0.086) per kilowatt-hour for surplus electricity supplied back to the national grid over a three-year period. This incentive is part of Bangladesh’s broader renewable energy strategy, which targets generating 20 percent of its electricity, or about 5,500 megawatts, from renewable sources by 2030. The government also aims to increase this share to 30 percent by 2040 in an effort to curb dependence on imported fuels.

The announcement follows a peak power deficit of nearly 4,000 megawatts in August, which led to extensive outages nationwide. The crisis has been driven by a shortage of domestic natural gas, causing power plants to operate below capacity. Additionally, limited supplies of coal and fuel oil have strained the electricity system further. Efforts to secure oil and liquefied natural gas (LNG) imports are ongoing, but fuel supply uncertainties, compounded by instability in the Middle East, have raised concerns over price volatility and potential disruptions.

To facilitate the expansion of rooftop solar, the government has set a ceiling of 8 taka per unit on the generation cost, including battery storage. The incentive rate not only covers this cost but also provides a 20 percent profit margin plus an additional premium. Consumers installing systems below the cost benchmark will be allowed to retain savings, encouraging cost efficiency. Currently, Bangladesh’s renewable energy capacity stands at approximately 1,559 megawatts, predominantly from solar sources.

Energy officials view rooftop solar installations as a quicker and more practical method to expand electricity generation in a densely populated country where acquiring large land areas for utility-scale projects is challenging. The inclusion of battery storage technology is intended to enable consumers to use solar power beyond daylight hours, easing demand on the national grid during peak times.

This policy shift represents part of Bangladesh’s broader response to its ongoing energy constraints, aiming to stabilize the power supply and enhance energy security amid global fuel market uncertainties.