Home ›› 30 Aug 2021 ›› Front
The recent expansion of the rural electrification network to the country’s remote corners has triggered a fall in demand for Solar Home Systems, industry insiders say.
Solar Home Systems (SHS) are small setups that use solar panels to absorb sunlight to produce electricity. The power gained through the SHS can be then used to run basic home appliances, such as lights and fans, and charge batteries.
SHS gained popularity in Bangladesh over the last decade, especially in rural areas outside the electrification coverage.
But a rising power demand and expanded electricity network encourage many rural homes to opt for grid power.
Mohammed Mojibul Haque, a SHS user for the last 10 years at Kamla union of Bhola, said he had to move to grid power as his power requirements went up.
“It is hard to run high-power consuming appliances, such as iron, refrigerator and television with solar power. SHS does not generate monthly bills but requires regular maintenance. I now have to depend on grid power to meet my everyday energy needs,” he told The Business Post.
“Many still use SHS in my locality as a backup in case of power outages,” he added. Zia Uddin Zaki, who has been using two SHS at his home and office in Kishoreganj for the last eight years, said he went for SHS as there was no grid power supply available in his area that time.
“When I installed a solar home system, there was no electricity supply in my area. Although my village is now under the rural power network, the need for SHS is not over. When we experience load-shedding here, solar power is our only hope,” Zaki told The Business Post.
According to a World Bank report published in April 2021, solar home system sales peaked in Bangladesh in 2013 with over 861,000 SHS installed that year. However, the pace of installations began dropping gradually from 2014.
Meanwhile, the Bangladesh Rural Electrification Board (BREB) expanded grid connections by 280 per cent between 2015 and 2019, from 9.4 million at the beginning of 2015 to 26.5 million by the end of 2019, suddenly shrinking the number of un-electrified homes, the report stated.
According to Bangladesh Solar and Renewable Energy Association (BSREA), only six to seven companies, including Rahimafrooz, Omera Solar and Paragon, assemble solar panels in the country. Most solar panels found in the market are imported.
The association estimates the country’s home solar system market is around Tk 150 crore.
As of now, monthly sales are around 10,000 panels, which were 80,000 in 2013. BSREA President Dipal C Barua said they recorded the highest sales in 2013 with a turnover of Tk 1,444 crore.
With rapidly decreasing demand, businesses related to solar panel import and installation are now concerned over the future of SHS business in Bangladesh.
“After starting in 2006, my business was doing great till 2017. I still import solar panels from China, but my import volume has decreased by 90 per cent over the last three years due to low market demand. If this situation persists, I think I have to shift my business to something else,” said Mohammed Obiadur, owner of Star Solar Limited at Dhaka’s Nawabpur.
Mohammad Mahbubur Rahman, regional manager of Hamko Solar in Gopalganj, said that the solar business has been declining since 2016 due to the expansion of the electricity network.
“Our business was very good in FY13-14 when our sales ratio was between 6,000 and 6,500 watts per year. However, our business has been declining gradually and in FY15-16, it fell to 3,000-3,500 watts per year. Our business was doing well when there was no grid power available in coastal and char areas,” he said.
“However, some buyers are still using solar power due to power outages or reduce electricity bills, but the number is very small,” Mahbubur added.
The fall in demand comes at a time when the prices of imported solar panels, especially from China, have reduced drastically over the last few years.
“The price of SHS has come down to a minimum of Tk 1,300, which was between Tk 2,500 to Tk 30,000 just four years ago. This is because most importers are bringing the products from China,” said Md Alam, who has been selling solar home systems at Mirpur in Dhaka.
“The per watt price starts from Tk 55 and if anyone wants to install a solar home system, they need to buy three products, solar panels of minimum 100-watt, a 10 AMP charge controller and a 40 AMP battery backup,” he said.
“From this package, a customer can run two ceiling fans along with five LED lights,” added Alam.
Meanwhile, the price of solar panels ranges between Tk 50 and Tk 85 per watt depending on the brand. Rahimafrooz sells a 10WP solar panel for Tk 514, 20WP for Tk 877, and 30WP for Tk 1,348 and highest watt 325WP for Tk 12,867.
Talking to The Business Post, Rahimafrooz Senior Marketing Executive Mohammed Ahsan said, “Our business is still doing well, but the demand had somewhat declined due to availability of grid electricity countrywide.”
In its 8th Five Year Plan July 2020–June 2025, the government focused on financing and incentivising renewable energy projects to achieve 40 per cent of the total electricity generation from renewable energy sources by 2041.
Under the plan, the government also undertook a Net Metering Policy for solar rooftop, utility-scale solar, solar irrigation, solar street light, among others.
Talking to The Business Post, BSREA President Barua said, “From our positive experience with solar home systems in the country, the government can take a new initiative to install 3KW, 4KW, 5KW, and 10KW solar power systems with net metering in the rural areas so that the excess energy generated can be added to the National Grid.”
