The 2026–27 national budget has been described as a “massive boost” for Bangladesh’s renewable energy sector, which has so far shown only “tepid progress,” according to Bangladesh lead analyst at the Institute for Energy Economics and Financial Analysis (IEEFA) Shafiqul Alam.
“With the government providing import duty waivers for renewables, the sector should now respond,” Alam said in an immediate reaction to Just Energy News following the budget announcement.
He noted that Bangladesh’s dependence on imported primary fuels—excluding biomass—has risen significantly, by more than 14% in the last four years, making the government’s push to incentivise renewable energy a “logical stepping stone.”
The budget has introduced full import duty exemptions on renewable energy components for specified periods, with some benefits extended until 2028 and others until 2030. Alam said these measures, along with incentives for electric vehicles, are likely to accelerate adoption of clean technologies.
He added that distributed renewable energy systems, particularly rooftop solar, stand to be major beneficiaries. “With full import duty waivers on key accessories, rooftop solar becomes less capital-intensive and more competitive compared to grid electricity, especially for industries, commercial buildings and high-energy users,” he said.
Alam also highlighted the potential for rural expansion, saying that even households across Bangladesh’s approximately 87,000 villages could benefit. If each village installed around 25kW, the country could add over 2,000MW of rooftop solar capacity.
A proposed 5% tax rebate on solar energy bills under an OPEX model could further stimulate uptake, he added.
On storage technologies, Alam said the removal of import duties on lithium-ion batteries would significantly reduce capital costs and encourage industries to invest in energy storage systems, helping lower peak electricity costs, currently around Tk16 per kWh.
He also pointed to strong incentives for electric mobility. Reduced duties on electric vehicles and waivers for charging infrastructure could accelerate EV adoption, helping reduce reliance on imported diesel, which accounts for more than 60% of transport fuel consumption.
“Different levels of duty waivers for local EV manufacturers could also help develop a domestic industry,” he said.
While welcoming the policy direction, Alam cautioned that implementation would be critical. Bangladesh has previously faced challenges with poor-quality installations, particularly in small-scale household renewable projects.
He stressed that the role of the Sustainable and Renewable Energy Development Authority (SREDA) would be “even more important” in ensuring quality control and effective rollout.