Sunlight to Savings: Environmental, Social and Economic Dividends of Solar Power in Bangladesh

The growth of solar power represents a beacon of hope in an otherwise bleak energy landscape, demonstrating that green energy is more cost-effective than fossil fuels. Bangladesh has achieved significant benefits from its small solar power sector, moving from zero grid-connected capacity a decade ago to over 722 MWp in 2024-25, a transition driven by private-sector investment.

Key Findings

1. Solar Power Installation Lags Behind: Solar capacity in Bangladesh has grown from 3 MWp in 2017-18 to 722 MWp in 2024-25, generating 3,230 GWh of electricity over the period. While the progress seems significant, Bangladesh's solar capacity remains lower than that of neighbouring countries.

2. Every MWp of Solar Power Saves BDT 2 crore in Power Generation Costs annually: Calculated by comparing the actual cost of generating solar and HFO power, the use of solar energy resulted in total savings of BDT 2,642 crore (USD 226 million) over the last eight years. In 2024-25, BDT 2 crore (USD 0.163 million) was saved in generation cost per MWp of solar power.

3. Each MWp of Solar Power Avoids Fossil Fuels Import of BDT 3.11 crore per year: The cumulative benefit of solar power in terms of avoided fuel imports has been substantial, totalling BDT 5,313 crore (USD 468 million) over the last eight years. In 2024-25, each MWp of solar power saved BDT 3.11 crore (USD 0.25 million) in annual fuel import costs.

4. Every MWp of solar power reduces emissions by 980 tons annually, equivalent to 696.5 grams per kWh compared to HFO power plants. Therefore, each MWp of solar power plants reduces carbon emissions by 980 tons annually. More than 2.25 million tons of carbon emissions were avoided by solar power over the last eight years.

5. Each MWp of solar power reduces 25 tons of pollution per year: Solar power avoids this pollution by eliminating harmful substance emissions at the source. Over the last eight years, from 2017-18 to 2024-25, solar power avoided a total of 48,403 tons of combined air pollutants. Each MWp of solar power avoids 25.33 tons of pollution annually.

Recommendations

To maximise the benefits of solar power and to ensure a socially inclusive energy transition, the following five major recommendations are proposed:

1. Policy and Planning: Establish a binding target for public and private entities to generate at least 30% of total electricity from renewable sources by 2030, supported by a clear implementation roadmap, and immediately halt all new coal and LNG power projects.

2. Land and Capacity Allocation: Repurpose acquired but unused lands from coal and LNG power plants, and develop dedicated solar zones on non-agricultural public land (such as char areas) to deploy at least 10,000 MW of solar power plants.

3. Grid Modernisation and Storage: Invest in smart grids and micro-grids, and integrate Battery Energy Storage Systems (BESS) into the national grid to manage solar intermittency and replace HFO peaking plants.

4. Financial and Fiscal Reform: Remove all import duties on solar panels, inverters, and accessories and establish a dedicated Renewable Energy Pre-financing Fund with simplified, single-stage approval for solar and wind projects.

5. Social Inclusion and Governance: Adopt a comprehensive Just Transition framework that legally protects and includes farmers, women, youth, indigenous peoples, and transitional workers in the energy transition, supported by a formal monitoring and evaluation framework involving civil society.

Expected Citation: Mehedi, H., & Mostafa, M. (2026). Sunlight to Savings: Environmental, Social and Economic Dividends of Solar Power in Bangladesh. Coastal Livelihood and Environmental Action Network (CLEAN): May 2026.