Home ›› 14 Mar 2022 ›› Front
Bangladesh introduced the net metering guideline – an initiative allowing industrial and commercial customers who generate solar power to sell their unused electricity back into the grid – back in 2018, with dreams of producing an additional 6,000 MWs of renewable energy.
After nearly four years, the initiative is generating a meager 36MW – which is nowhere near the initial projection, reveal data from the Sustainable and Renewable Energy Development Authority (SREDA).
When The Business Post approached SREDA for more information on the initiative, all they could provide was a small leaflet. Industry leaders too pointed out that they know little about the net metering system, and more has to be done to popularise this green initiative.
On the issue, the Bangladesh Garment Manufacturers and Exporters Association’s (BGMEA) Director Abdullah Hill Rakib said, “I have been hearing about the net metering system for years, but SREDA has not been able to give us any solid information on how profitable it is.
“They never even organised a single seminar in this regard with the industry owners. Had SREDA taken a bit of initiative, the BGMEA could have at least encouraged its members to adopt this system.”
When asked why industry owners are not participating in the net metering initiative, SREDA Chairman Mohammad Alauddin said, “This is a work in progress, and it will not be limited to just the industrial and commercial rooftops.
“We are meeting stakeholders regularly. I believe if the media writes more about net metering, it will generate more interest towards this initiative.”
What’s in the guideline?
In accordance with the Power Sector Master Plan 2016, Bangladesh sought to generate 10 per cent of its total electricity using renewable sources by 2020, and as part of the process, took initiatives to install solar panels at different levels.
The net metering guideline is a govt-backed initiative allowing industrial and commercial consumers who generate power through rooftop solar panels to sell unused electricity back to the national grid.
In case of a power deficit, a consumer can also use electricity from the grid at a significantly reduced rate.
To avail this facility, a consumer will have to install rooftop solar panels having at least 70 per cent of their power demand from the national grid. The installation and maintenance costs of a 50KW solar power system are around Tk 30 lakh and Tk 10 lakh respectively.
Under this guideline, the cost of per unit electricity from the grid will be Tk 4, and a customer will be able to sell surplus power generated using solar panels back to the grid at the wholesale price of their distribution company, which currently stands at around Tk 6.
The SREDA leaflet says that in 20 years, a customer will be able to make Tk 40 lakh – Tk 50 lakh in profits by selling solar power, depending on the price of grid electricity. A customer can self-finance the rooftop solar power system, or do it through loans or a third party.
On the matter, Bangladesh Solar and Renewable Energy Association’s President Dipal C Barua said, “Global prices and gas and oil are on the rise, causing the price of electricity to go up every year as well.
“Per unit of electricity from the grid costs around Tk 11, but under the net metering guideline, power will cost only Tk 4 per unit. The initial costs of installing rooftop solar power is high, the profits would be significant in 20-30 years.
Big potential left untapped
GMS, a garment factory in Gazipur, installed a 4MW capacity solar power system on its rooftop last year. Power generated from this system is now saving this company Tk 15 – Tk 20 lakh per month.
Golam Mostafa, managing director of GMS Composite Knitting Industries, provided more details saying, “The plant has been set up at a cost Tk 25 crore. Our experience with the system has been very good, and we will hopefully recoup the costs in seven years.”
SREDA – in a recent presentation on all sectors of renewable energy – mentioned that 6,000MWs of electricity can be generated through the net metering guideline in commercial buildings, industrial plants, economic zones, railways and highways.
Reaz Uddin Chowdhury, lead expert at SREDA Solar Help Desk, said, “We have yet to conduct a feasibility study for net metering, but we have many small case studies. Using the data, we can estimate that around 6,000MWs of electricity can be generated through net metering.”
According to the Bangladesh Industrial Police, there are currently 7,828 small and large factories in the country. The Business Post could not find accurate data on the number of industrial buildings.
Data from the Power Development Board (PDB) shows that the country’s daily electricity demand is 9,000MW. Sixty-five percent or about 6,000 megawatts electricity is used in the industrial and commercial sectors.
The Bangladesh Energy Regulatory Commission (BERC) says an average mid-level industry in Bangladesh uses 400 to 600 units of electricity per month, and pays around Tk 3.5 lakh as bill.
A large industry consumes between 600 – 4,000 units of electricity per month, and pays Tk 1.6 crore in electricity bill. In other words, 10-15 per cent of the total expenditure of an industrial plant is spent on electricity, industry insiders say.
SREDA officials say the electricity distribution companies have been providing net meter connections since 2018. So far, net meter solar has been installed in the roofs of 1,536 industrial and commercial buildings.
‘Small projects not profitable’
Since the initiative’s inception, the Infrastructure Development Company Ltd (IDCOL) has been offering loans to cover up to 80 per cent of rooftop solar power setup cost at a 6 per cent interest rate. However, IDCOL is not providing loans for any project below 200KW capacity.
According to the Center for Energy Research, at least 2,000 square feet of space is required to install solar panels with 200KW capacity. But most of the industrial buildings in the country do not have such a big roof.
“Small projects are not profitable,” an official of IDCOL said on condition of anonymity, admitting that many industrial owners are not interested in installing solar panels due to unavailability of loans.
High costs, taxes challenging
According to the World Economic Forum, the cost of solar energy installation in India has decreased by 84 per cent in the last 10 years, and it is 60 per cent in the United States. But entrepreneurs say the costs of installing solar have increased in Bangladesh.
Mahfuz Ur Rahman Bhuiyan, director of the UCC Renewable Energy and Power Division, said, “The main component in net meter technology is the inverter, and import tax on this component is currently 37 per cent. This is a hurdle.”
