Restoration of full customs duties for inverters hits Bangladeshi solar sector

The re-imposition of higher import duty and taxes on inverters has come as a burden to Bangladesh's slowly expanding renewables sector.

A special regulatory order which had applied a reduced, 11% import duty and tax cost on inverters was revoked in the 2021-22 budget which took effect in July, restoring the combined levy on the ‘important capital machinery' items to its previous 37%.

The Bangladesh Solar and Renewable Energy Association (BSREA) yesterday wrote to the government to appeal for the removal of the duties in their entirety if the nation is to achieve its aim of generating 40% of its electricity from renewables by 2041.

The “imposition of any additional duty and taxes will hinder attaining the target,” wrote BSREA president Dipal C Barua in a letter to the chairman of the nation's Sustainable and Renewable Energy Development Authority.

The reimposition of duties also threatens Bangladesh's sustainable development goals and the greenhouse gas reductions the nation has committed to under the nationally determined contribution it set under the Paris climate agreement, Barua added.

Bangladesh is currently chairing the 48-nation Climate Vulnerable Forum group of countries disproportionately affected by global heating.

The trade body president suggested inverters intended for use in clean energy systems could have their own product code under the ‘harmonized system' used to classify items internationally, thus making it easier for governments to incentivize their use.

Imran Chowdhury, country head for inverter supplier Sungrow Renewable Energy Bangladesh Limited, said the restoration of full duties had come as a blow, especially with the Covid-19 pandemic continuing to affect the sector.

“The price of the item has already gone up, especially [for] rooftop solar, and other small initiatives will face hurdles,” he told pv magazine.