Renewable Energy

Renewable Energy in Bangladesh

Renewable energy in Bangladesh is a sector with huge growth potential in Bangladesh. By 2024, Bangladesh was largely dependent on natural gas. The rest of the fuel mix was dominated by oil and biofuels. However, as the economy developed, Bangladesh is now looking for sustainable and more affordable alternatives to meet its growing energy demand. In light of the country’s recent struggles with climate change, the focus is now shifting from fossil fuels to green fuels.

Bangladesh is establishing itself as a regional hub for renewable energy, backed by strong policy guidance, growing industrial demand, and abundant natural resources. With over 27,000 MW of power generation capacity, the country is steadily increasing its renewable share through solar power, both on-grid and off-grid systems, which is currently above 5%. With actual peak power generation at around 15,000 MW, there is a significant opportunity for investment in efficient, scalable renewable energy solutions that can unlock grid efficiency and meet growing demand.

Electricity demand is growing at an annual rate of 7%, with peak demand expected to exceed 25,000 MW by 2030. In response, the government’s draft renewable energy policy sets ambitious targets: 20% of total electricity from renewable energy by 2030 and 30% by 2040. The roadmap includes incentives for local generation, battery storage integration, competitive power trading, and targeted financial and monetary support for investors.

With high solar radiation, biomass availability, and growing energy demand, Bangladesh offers attractive opportunities in solar, biomass, and waste-to-energy. Through clear policy momentum and infrastructure development, the country is creating a future-ready platform for clean energy investment and innovation.

Growth Drivers

Expanding Capacity: Bangladesh’s renewable energy generation capacity stands at 1,559 MW, of which solar power leads at 1,265 MW (81%), followed by hydropower (230 MW) and wind (63 MW). The solar power market is projected to reach 3.9 GW by 2030, growing at a CAGR of 38.6% (2025-2030).

Natural Advantages: High solar radiation (5 kWh/sq m/day), effective wind (3-4.5 m/s), and tidal potential support various RE projects.

Policy Momentum: Solar home systems have reached over 6 million users; land-efficient innovations are on the rise. Strong regulatory pressure from BERC and SREDA provides supportive tariffs and encourages smart energy solutions for flood-prone areas.

Growing investment: Foreign direct investment (FDI) in the energy sector reached $3.48 billion in 2022. The transition from the Independent Power Producer (IPP) model to merchant power plants enables direct energy sales, unlocking competition and efficiency.

Competitive costs: The levelized cost of electricity (LCOE) for solar power in Bangladesh ($97–135/MWh) is becoming competitive with gas ($88–116/MWh) and cheaper than coal ($110–150/MWh), with costs expected to decline in the future between 2030 and 2050.

Strategic renewable energy targets: Achieving a 30% renewable energy share by 2040 through strong growth in solar, wind, tidal, and biogas projects. Opportunities such as low-cost greenhouse-based agro-solar systems (€90–150/m², the cheapest in Asia) expand the country's renewable energy diversity.

Renewable Energy in Bangladesh 2025

In 1980, only 0.016% of Bangladeshis had electricity. Fast forward 40 years, and this number has increased to 92%. Just a few years ago, Bangladesh was on par with countries like Mongolia in terms of electrification levels below 90%.

Bangladesh’s renewable energy policy journey began in 2008, when the Ministry of Power, Energy, and Mineral Resources released its policy guidelines. Since then, until 2022, Bangladesh has been making slow progress in the field of sustainable energy. However, the development of renewable energy projects has started to move forward gradually.

As of 2024, Bangladesh has 1,200 MW of clean energy capacity. In the country’s total energy mix, this accounts for about 2% of renewable energy. Solar energy accounts for the vast majority of current renewable energy capacity, at 968 MW. The country generates less than 1% of its electricity from hydropower. These levels are well below the global average of 13%.

While the country has great potential to accelerate renewable energy deployment, current targets are still weak. Bangladesh’s Integrated Energy and Power Master Plan for 2023 aims for 18% clean energy by 2030 and 40% by 2041. This may seem like a significant leap from current levels. However, there is a caveat. Only 5.7% of the 18% clean energy target by 2030 will be renewable. This will increase to 8.8% of the 40% target by 2040. The rest will come from questionable technologies such as CCS, ammonia, and hydrogen, which, although fossil fuels in nature, are included in the clean energy targets set by the government.

This will further lock Bangladesh into the major fossil fuel crisis it suffers from today. In 2023, the share of fossil fuels was 98%, most of which was natural gas.

Potential Renewable Energy in Bangladesh

Bangladesh's National Solar Action Plan has launched a plan to change its renewable energy policy. It aims to install up to 40 gigawatts (GW) of power by 2041. This was accompanied by a medium-term production of 25 GW and a business outcome of 8 GW as usual.

As a result, achieving the 40 GW target based on renewable energy capacity in Bangladesh could be challenging. Latest figures show that renewable energy accounts for only 2% of the national energy mix. However, if successful, it would be made up of the following:

• 2.5 GW - irrigation pumps
• 4 GW - electric utilities
• 5 GW - private developers
• 12 GW - rooftop installations
• 16 GW - solar plants

There is potential for a rapidly changing and diverse renewable energy mix. For example, using just 1% of the water table of the Kaptai Dam for floating solar power would allow for the generation of about 500 MW of solar power. Additionally, untapped land potential can be found in the riverbanks and reclaimed areas of the Meghna estuary.

Furthermore, according to the National Renewable Energy Laboratory (NREL), there are over 20,000 square kilometers of land with wind speeds between 5.75 and 7.75 km/s. This equates to a potential of over 30,000 MW.

Challenges of Renewable Energy Sources in Bangladesh

Bangladesh is one of the countries most affected by climate change. Several studies have shown that coastal lands and riverine areas are increasingly vulnerable to erosion and flooding. These challenges are forcing people to relocate and complicating renewable energy network development and policy.

To bring about rapid change in the national electricity system, Bangladesh needs to address several other challenges. There is also a lack of incentives for private investors, including: lack of coordination between ministries, procedural difficulties, limited budget allocation to RER-based projects, slow technological adoption, a lack of awareness and implementation of green building policies, and a lack of grid infrastructure with increased demand and capacity.

Importantly, despite the best efforts of the authorities, the entire area of ​​Bangladesh cannot be electrified. The United Nations projects that about 10% of it will remain off-grid. This has led to the innovation of non-profit groups such as Grameen Shakti to maintain electricity generation in rural areas and provide renewable energy technologies.

Benefits of the Renewable Energy Transition

A transition to the renewable energy sector will further accelerate economic development, keep energy access reliable and affordable, and improve healthcare and quality of life.

A key factor in Bangladesh’s renewable energy transition is the support of global institutions. Since the country’s independence, the World Bank has provided more than US$30 billion in grants and interest-free loans. In addition, Bangladesh has been taking advantage of interest-free loans to finance its renewable energy projects.

Another success story is the partnership between the World Future Council, a local coastal development partnership organization, and the German development agency, Bread for the World. In 2018, it launched the project “100% Renewable Energy for Bangladesh – Access to Renewable Energy for All within a Generation”.

There are also long-standing and ongoing initiatives with partner organizations such as REEP. Their goal is to encourage the renewable energy transition within Bangladesh.

Important Renewable Energy in Bangladesh

• Energy Demand & Shortages: Bangladesh is experiencing exponential growth in industrialization and urbanization, creating unprecedented electricity demand.
• Environmental Concerns: The country faces pollution and carbon emission challenges. Transitioning to renewable energy reduces reliance on fossil fuels.
• Government Incentives: Policies favoring solar and wind power encourage private and public sector investment.
• Economic Benefits: Renewable energy generates jobs, reduces energy costs, and attracts international investors.

Benefits of Renewable Energy in Bangladesh

1. Reduces Dependence on Fossil Fuels
   Bangladesh relies heavily on imported fossil fuels for electricity. Renewable energy like solar and wind reduces this dependency, saving foreign currency and enhancing energy security.
2. Environmentally Friendly
   Renewable energy generates little to no greenhouse gas emissions. By using solar, wind, and biomass, Bangladesh can lower air pollution and combat climate change.
3. Cost Savings in the Long Term
   After initial installation, renewable energy sources have low operating costs. Solar panels or wind turbines can provide electricity for decades, reducing electricity bills for homes and businesses.
4. Energy Access for Remote Areas
   Many rural areas in Bangladesh lack reliable electricity. Solar home systems, mini-grids, and micro-hydro projects bring power to remote communities, improving education, healthcare, and livelihoods.
5. Job Creation and Economic Growth
   The renewable energy sector creates jobs in manufacturing, installation, maintenance, and management. This contributes to local economic growth and skills development.
6. Supports Sustainable Development Goals (SDGs)
   Renewable energy promotes affordable and clean energy (SDG 7), climate action (SDG 13), and sustainable cities and communities (SDG 11), aligning with Bangladesh’s development plans.
7. Reduces Energy Loss
   Distributed renewable energy systems (like rooftop solar) reduce energy transmission losses, making power delivery more efficient.

Services Offered: Renewable Energy in Bangladesh

1. Solar Energy Solutions
• Rooftop Solar Systems
• Solar Street Lights
• Solar Water Pumps
2. Wind Energy Solutions
• Small-Scale Wind Turbines
• Industrial Wind Power Projects
3. Hybrid Energy Systems
• Solar-Wind Hybrid
• Battery Storage Solutions
4. Energy Consultation and Project Management
• Feasibility Studies
• System Design & Installation
• Maintenance & Monitoring
5. Community Projects
• Rural Electrification
• Renewable Energy Awareness Campaigns