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Bangladesh introduces 0% tax rate for solar power sector

Bangladesh has announced a major solar energy incentive package, including a 0% tax rate for the solar power sector until 2035 and a 5% rebate on consumer solar electricity payments. The policy also removes import and other duties on key solar components to boost investment and support the country’s renewable energy targets for 2030 and 2050.
By
Syful Islam
Image: Fredrik Rubensson, Wikimedia Commons, CC BY-SA 2.0

The government of Bangladesh on Thursday announced a major policy package to accelerate solar power development, including a zero per cent tax rate for the solar power sector until 2035.

In addition, a 5% tax rebate will be provided on payments made against consumers’ solar electricity bills.

The initiative aims to attract investment into the solar power sector as part of the government’s plan to generate 20% of total electricity demand from renewable energy sources by 2030, and between 30% and 50% from clean energy by 2050.

Finance Minister Amir Khosru Mahmud Chowdhury, while presenting the national budget in parliament on Thursday, announced a new notification reducing import duty, regulatory duty, supplementary duty, and advance tax on essential solar power components to 0%.

According to the announcement, items such as solar inverters, battery pack housing, lithium cells, lithium-ion batteries, solar photovoltaic modules/panels, mounting structures, battery energy storage systems (BESS), battery management systems, UV-protected solar DC cables, and battery thermal management systems will benefit from the duty and tax exemptions.

“Through the gradual expansion of solar, wind and other clean energy sources, the foundations of a low-carbon economy will be established,” the minister said.

He also noted that investors would receive support and incentives for domestic manufacturing of renewable energy equipment, including solar panels, wind power components and battery systems.

Solar sector stakeholders have welcomed the initiative, describing it as a strong signal of government support for renewable energy investment.

Mostafa Al Mahmud, president of the Bangladesh Sustainable and Renewable Energy Association (BSREA), said the incentives demonstrate the government’s commitment to the renewable energy sector. “There is no alternative to clean energy for sustainable development,” he said, adding that with continued policy support, industries would be able to generate electricity for their own use, while households would also be encouraged to install rooftop solar systems.

Bangladesh currently has a renewable energy generation capacity of 1,797 MW, of which 1,504 MW comes from solar power.

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