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The Kyoto Protocol, signed in 1997 and ratified by 192 parties, was a steppingstone in taking a sectoral approach to climate governance by identifying key emitting industries. It was only until the end of the second commitment period in 2020 that these sectors became an integral part of climate action priority[1]. The top contributors include Energy (electricity and heat production), Industry (manufacturing), Agriculture & Land Use, and Transportation.
According to the US Environmental Protection Agency (EPA), energy contributed to approximately 34% (2019) of global GHG emissions – making it the highest contributor[2]. In line with Nationally Determined Contributions (NDC) and other climate commitments, countries raced to bring down emissions – wherever a business case existed.
An article published on behalf of COP25 and COP26 Climate Champions states that at least 20% of major (based on revenue) companies worldwide are aligning themselves with these sectoral reforms towards sustainability. This includes targets to generate 60% of energy through renewables1.
Figure 1 Annual Solar PV Installed Capacity 2000-2024 (SolarPower Europe)
In 2024, this race towards energy transition led to the installation of solar PV, enabled to capture 597 GW of solar energy. Asia-Pacific accounted for 70% of this installed capacity and China, 55% of global solar capacity. The sector is expected to grow at a rate of 33% and produce 7.1 TW total solar capacity by 2030. This adds up, considering, solar made up 81% share of all new renewable capacity added worldwide[3].
Bangladesh too has embarked on a transformative energy journey, also placing solar power at the core of its energy transition plans. The nation has set forth ambitious targets: achieving 15% of its energy needs from renewables by 2030, 40% by 2041, and a complete transition to 100% renewable energy by 2050[4].
In 2025, renewables only made up 5.2% of the country’s 31 GW installed capacity. Out of which solar covered 1,300 MW (covering roughly over 3 million households*) and made up for 80% of the renewable energy installed capacity. Signs of progress in the solar energy sector have already been visible.
Figure 2 The Energy Mix in Bangladesh
More than 6 million households now benefit from solar home systems and mini grids, while large-scale ventures like the Asian Development Bank’s $24.3 million investment in the Muktagacha Solartech Energy Limited project signals an appetite for utility-sector expansion[5]. Yet, in FY 2022-23 the country paid around USD 11 Billion on fossil fuel import[6] – the higher cost driven by global economic shocks and adjacent currency devaluation.
This import dependence extends to the renewable energy industry, with almost all the components being imported. Although no official price tag is assigned on this import, China & India play the roles of top contributors for the country’s renewable requirements. A majority of this requirement comes from solar energy related equipment which includes solar cells, panels (modules), inverters, solar mounting structures, and other balance-of-system (BOS) components[7].
This should in no way undermine the local capacity, or ecosystem of Bangladesh’s solar capacity. Just recently, Radiant Alliance Limited dispatched a consignment of solar module that can source 64.60 MW of energy to the United States[8]. Local evolution of the alternative energy sector in terms of electric vehicles, widespread solar use, and resilience of the light-engineering sector is an everyday sight.
The ecosystem goes further back with Rahimafrooz Renewable Energy being a pioneer with strides in export and developing BOS, however operations have since seized due to steep competition. It is estimated that in recent times, China’s giant overcapacity has made way for wholesale panel sales at prices near USD 0.1-0.16/W.
| Company Name | Approx. Module Capacity (MW/yr) | Status | Remarks |
| Radiant Alliance | 600 | Operating | Export-grade, flagship plant |
| Rahimafrooz Renewable Energy | ~50 to 100 (historic est.) | Not Operational | Exports, pioneer, BOS maker, volume varies |
| Solarland Bangladesh Co. Ltd | ~50 to 100 | Operating | Local leader |
| Solar Electro Bangladesh Ltd | ~50 to 100 | Operating | Rooftop, home system supplier |
| Sonnex Energie JV | 500 (by 2028, planned) | Under Construction | Planned advanced facility |
| Longi | N/A | Announced | New line, major global player entering |
| Notable mentions: Green Power Ltd., Grameen Shakti, Omera Solar | |||
| Note: Capacity data outside Radiant Alliance and Sonnex plants is based on published estimates and industry associations. Most older lines operate semi-automated assembly with variable output depending on order pipeline | |||
Table 1 An estimative solar manufacturing overview for Bangladesh[9]
The undermining of Bangladesh’s progress comes in the comparative view of our peers and their strides in energy transition:
Current solar manufacturing capacity of Bangladesh can supply around 500 to 700 MW/year, with firm plans to add at least another 500 MW/year by 2028. This is near the minimum required to meet Bangladesh’s 2030 solar installation targets, but expansion and further integration of BOS/local content are necessary for supply security and cost control.
The Integrated Energy and Power Master Plan (IEPMP) 2023 considers several scenarios, including the Reference Scenario (REF), Advanced Technology Scenario (ATS), and Net-Zero Emissions Scenario (NZS). The government prefers the ATS as the basis for the Power Development Plan (PDP) and predicts:
Figure 3 Renewable energy deployment plan in IEPMP 2023
While the public and private sectors currently share power generation roughly equally, the IEPMP forecasts the public sector’s role to increase to around 75% by 2041—aimed at maintaining strategic energy assets and managing transition risks[13].
Meanwhile, future solar and clean energy Power Purchase Agreement (PPAs) are expected to be structured increasingly as Public-private partnerships (PPPs), leveraging private capital to distribute risk, reflecting both government policy frameworks and recent practice in the sector[14].
Synthesizing the policy directives, climate commitments, local production capacity’s pace, and fluctuating global economies, we can jump to a few key understandings – (a) The energy transition is crucial, and thus far solar has been the North star, (b) Like all forms of energy, maintaining control over supply and prices are essential, (c) The cost for energy transition is heavy on the pockets.
Comprehending Bangladesh’s ambition to produce 15% of energy from renewables by 2030, we would need to expand the mix by roughly 10 percentage points. That translates to an additional installed capacity of over 3,133 to 3,300 MW in 4 years. That is to assume the power generation hasn’t increased, which is unlikely.
Realistically, the Integrated Energy and Power Master Plan (IEPMP) 2023 shows no indication to live by the 2030 renewables commitment. In fact, the study team predicts during an Advanced Technology Scenario (ATS) in 2030, 19% of net energy generation will come from coal.
Regardless, taking an optimistic & hopeful view of Bangladesh’s energy transition, the role of solar energy is undoubtably at the forefront in the short and medium term. This chapter takes a linear, but critical view of different scenarios to determine the best way forward with integrating solar energy.
Let’s assume Bangladesh yields a projected grid size of 40 GW by 2030, and that research into all other alternate source of renewable energy has come up with zero results, meaning solar is the only way forward.
Under these assumptions the top line numbers are:
Scenario 1: Capacity-Capped All Domestic Production
In this scenario, we assume all of the additional solar requirement will be manufactured locally, and only the gaps will be filled by import. Under this circumstance, about 4,021 MWp can be installed locally, the remaining 680 MWp has to be imported.
Assuming domestic production is capped at 600 against an approximate 940 MWp need, requiring an import of 340 MWp each year. Only from 2028 onwards would local manufacturing start covering all the additional requirements.
Scenario 2: A Phased Transition
This scenario aims to create a balanced mix between import and export, the hybrid modality ideally producing 70% of the requirement domestically till 2027 and bumping it up to 85% from 2028, once additional capacity has been added.
This strategy utilizes early import buffers quality/schedule, while keeping a small import (less than 15%) in later years for high efficiency classes and risk hedging.
Scenario 3: All Import
This scenario plans to cover all additional solar requirements through imports.
Bangladeshi manufactures will need to at least operate a mid-scale factory producing 200-300 MW/year to beat or match the lowest Chinese import prices. ideally more, with continuous investment in automation, local supply chain development, and technology upgrades. Factories below this scale benefit mainly from rapid delivery, niche projects, and special local incentives, not outright cost leadership.
All this would just touch our 2030 commitments, that is not to say the bigger leaps promised for 2041 and 2050. Local manufacturing of solar modules in Bangladesh can reduce certain costs, especially those related to shipping, currency exchange, import tariffs, and supply chain delays, but it faces challenges from the highly competitive global market, especially Chinaʼs ultra-low module prices. The net benefit depends on the scope of localization and policy support.
Local manufacturing can cut total system costs and stabilize supply for Bangladesh’s fast-growing solar market, but only if supported by industrial policy, technology transfer, and scale. Otherwise, prices may not beat China’s global dominance in module production. For many projects, tailored local assembly and BOS sourcing is the most viable way to achieve cost reduction, while full cell manufacturing remains challenging
In conclusion, the benefit of local manufacturing outweighs the risk of supply chain dependence in an ever increasingly deglobalizing world. Added to the growth and development of industry, localizing manufacturing also creates green jobs and builds skills. Thus, during this evident transition towards renewables, the decision to localize manufacturing is not just economic, it is strategic.
This article was authored by M. Rakinul Islam, a Business Consultant and Abida Rahman a Content Writer at LightCastle Partners. For further clarifications, contact us here : [email protected]
[1] 15 Sectors of Global Economy Shift the Dial on Climate, UNFCCC (Sept 2021)
[2] Global Greenhouse Gas Overview, EPA (Aug 2025)
[3] Global Market Outlook for Solar Power 2025-2029 (May 2025)
[4] Bangladesh’s energy transition journey so far, United Nations Bangladesh (Feb 2024)
[5] Renewable Energy sector overview, BIDA
[6] BB increases foreign currency support for energy import, The Financial Express (Aug 2024)
[7] Solar Manufacturing in Bangladesh: A Strategic Analysis of Local Sourcing vs. Import, PVknowhow (Aug 2025)
[8] Bangladesh ships locally made solar modules to US, The Financial Express (June 2025)
[9] The Business Standard, Textile Today, PVknowhow, Primroot, Mordor Intelligence, PV Magazine, Solar Feeds, SREDA Stakeholder Index
[10] Table 4.2-1 Final Energy Consumption by Sector, ATS In-Between, IEPMP 2023
[11] Table 5.2-1 Maximum Electric Power Demand, ATS In-Between, IEPMP 2023
[12] Table 6.1-1 Total Primary Energy Supply Requirement, ATS PP 2041, IEPMP 2023
[13] The Many Holes in Bangladesh Energy Master Plan, Energy Transition BD
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