Jun 6, 2026
| New Age
Civil society organisations and energy experts on Saturday urged the government to introduce a symbolic 1 per cent tax on renewable energy equipment in the upcoming national budget and establish a Tk 25,000 crore revolving green finance facility to accelerate the country’s transition to clean energy and strengthen energy security.
They proposed that the fund be managed by Bangladesh Bank and provide loans for renewable energy projects at interest rates below 5 per cent.
The demands were made at a press conference, titled ‘Renewable Energy for Energy Security: Policy Shifts Needed in the National Budget’, held in Dhaka.
The event was jointly organised by the Coastal Livelihood and Environmental Action Network and the Bangladesh Working Group on Ecology and Development, with support from the Bangladesh Environmental Lawyers Association, Ethical Trading Initiative Bangladesh, Lawyers for Energy, Environment and Development, and Manusher Jonno Foundation.
Presenting a concept paper, CLEAN Networking adviser Monowar Mostafa proposed reducing all customs duties, value-added tax and other taxes on renewable energy equipment to a symbolic 1 per cent for the next decade to boost investment and deployment of clean energy technologies.
He said a significant gap remained between Bangladesh’s renewable energy ambitions and actual implementation.
According to him, the country’s installed renewable energy capacity, including hydropower, currently stands at only 1,679 megawatts, far below national targets.
However, there is an estimated combined solar and wind energy potential of around 132,000MW.
Mostafa noted that renewable energy equipment currently faces taxes and duties ranging from 27 per cent to 61 per cent, substantially increasing project costs and discouraging wider adoption.
‘Meanwhile, fossil fuel-based power generation continues to enjoy significant direct and indirect policy advantages,’ he said.
He added that taxes on renewable energy equipment contribute less than 0.05 per cent of total government revenue, making the existing policy economically insignificant while hindering the country’s clean energy transition.
Citing economic and environmental benefits, he said every megawatt of solar power can save approximately Tk 31.1 million annually in fuel import costs and prevent around 1,180 tonnes of carbon dioxide emissions.
Speakers warned that Bangladesh’s continued dependence on imported fossil fuels could lead to higher electricity prices, mounting pressure on foreign exchange reserves and increased vulnerability to global fuel market volatility.
They recommended a rooftop solar subsidy of at least Tk 25,000 per kilowatt, with an additional 10 per cent incentive for projects led by women and indigenous communities.Â
They suggested mandatory integration of 20 per cent Battery Energy Storage Systems in new renewable projects, activation of corporate power purchase agreements, and a progressive carbon emission tax.
They warned that ongoing fossil fuel subsidies and minimal support for renewables could harm industrial competitiveness and climate goals.
Expanding domestic renewable energy, they argued, would reduce import dependence, create jobs, and enhance national energy security.
They urged the government to focus on rooftop solar, agrivoltaic, and floating solar technologies to protect agricultural land while improving access to electricity.
CLEAN chief executive Hasan Mehedi warned that Bangladesh could become trapped in rising energy costs and import dependence without urgent policy reforms.
He emphasised the need to prioritise renewable energy in the upcoming budget through tax reforms and financial incentives.
President of the Bangladesh Sustainable and Renewable Energy Association Mostafa Al Mahmud highlighted that reliable electricity is crucial for economic growth, stating that without it, industrialisation and job creation are hindered.
LEED research director Shimonuzzaman noted a significant gap between renewable energy targets and actual investments, calling for stronger fiscal incentives.