Bangladesh's energy crisis has grown beyond load shedding into a structural threat to the economy, and a rapid, policy-driven shift to solar power is the only way out, according to an analysis published by The Daily Star.
The argument rests on the country's deepening dependence on imported fuel. More than 60 percent of Bangladesh's energy demand is met through imports, the analysis said, leaving the economy exposed to volatile global markets and shrinking foreign currency reserves.
"What we are seeing today is not just a temporary shortage of gas or fuel. It is a signal that our energy system has become too dependent on imported fossil fuels," the analysis said.
How much does Bangladesh spend on energy imports?
The government spends more than BDT 200 crore per day on energy subsidies, while annual energy import expenditure stands at around USD 12 billion, according to The Daily Star.
Supply risk is concentrated. Nearly 70 percent of Bangladesh's LNG imports come from Qatar, meaning any disruption to that supply could quickly trigger a severe shortage.
The gap between demand and supply is already wide. Daily gas demand exceeds 2,500 mmcfd, but supply sometimes falls to 850–900 mmcfd. The daily gas shortage exceeds 1,100 mmcfd, and peak-time electricity shortages may reach nearly 2,000 MW. The strategic petroleum reserve covers only about 35–40 days, well below the buffers held by China and Japan.
Load shedding and the cost to garment factories
The crisis is cutting into the country's export backbone. Gas shortages and load shedding are reducing productivity in the readymade garment sector by 25–30 percent in many cases, the analysis said, threatening export earnings and foreign currency inflows.
Households are feeling it too. Although Bangladesh declared 100 percent electrification in 2022, many rural areas still experience 10 to 20 hours of load shedding every day during summer, disrupting education, small businesses and agriculture. Long fuel queues, shorter office hours and schools moving online have become recurring symptoms.
Electricity tariffs have been raised more than 10 times at bulk and retail levels over the past 15 years — a path the analysis calls unsustainable because fossil-fuel power remains tied to global prices, dollar availability and repeated subsidy cycles.
Solar power vs HFO: the cost gap in Bangladesh
The financial comparison is stark. A 1 MW heavy fuel oil plant costs nearly BDT 190 crore per year to operate, with much of that paid in foreign currency. A 5 MW solar project requires a one-time investment of around BDT 25 crore, after which fuel costs are practically zero for 15–20 years.
Each 1 MW of solar power can save around USD 325,000 per year in foreign currency, the analysis said.
"For Bangladesh, renewable energy means jobs, fuel independence, savings in foreign currency, industrial competitiveness, agricultural protection, and economic strength," the analysis said, framing the transition as an economic and energy-security issue rather than primarily an emissions issue.
What is blocking solar power in Bangladesh?
Despite the arithmetic, renewable energy contributes less than 5 percent of power generation — far below the global 30 percent target by 2030.
The obstacles identified in the analysis include:
- Import duties and taxes of around 50–60 percent on renewable energy equipment
- Financing costs of 10–12 percent or higher, with limited access to low-cost loans
- Slow approval processes and delayed net metering implementation
- High letter-of-credit margins, weak local manufacturing and insufficient grid digitalisation
Bangladesh's weight-based customs assessment inflates solar equipment valuations by three to four times, the analysis said, urging a shift to transaction-value assessment aligned with WTO norms. Neighbors including India, Pakistan, Vietnam and China have accelerated solar and wind deployment through low or zero import duties, tax exemptions and concessional financing.
Whether the government will cut the duties, change customs valuation, expand concessional financing and set measurable renewable targets with timelines remains unclear. The analysis argues that without those steps, the crisis will keep repeating itself.