Solar power that once lit up rural homes is dimming

Solar power for homes in Bangladesh, which received widespread appreciation, is losing its lustre as the electricity supply through the national grid expands, virtually ending the growth of solar energy, which illuminated millions of rural households long used to go to sleep shortly after dark.

Over the last two years, the proportion of the population with solar home systems (SHSs) has been falling.

In 2021, some 2.25 percent of the population used SHSs. The number declined to 1.81 percent in 2023, according to a recent survey report of the Bangladesh Bureau of Statistics (BBS).

The data illustrated that SHSs, the adoption of which accelerated between 2003 and 2013, are expanding no more. Today, SHSs light up 60 lakh homes in Bangladesh and stakeholders say the number is unlikely to grow because an increasing number of households are being connected to the national grid.

So, SHSs might be available only in geographically distant locations, such as remote chars, that are challenging to connect to the grid.

"It is already saturated and there is no future for SHSs as electricity has been made available in rural areas," said Mohammad Alauddin, a former chairman of the Sustainable and Renewable Energy Development Authority (SREDA).

Bangladesh began to install SHSs in rural off-grid areas at the turn of the millennium as the supply of electricity through the national grid was low and a huge portion of the population had to depend on kerosene lamps as their only source of light.

In 2009, only 47 percent of households were connected to the national grid.

Infrastructure Development Company Ltd (IDCOL), with financing from the World Bank (WB), began to promote the installation of SHSs in 2003. Sales peaked 10 years later, in 2013, with over 8.61 lakh systems installed that year. Since then, the installation has begun losing steam.

The decline was mainly attributed to the rapid expansion of the grid, beginning in 2015, and the free distribution of SHSs under the government's social safety net schemes, according to a WB study report on SHSs in 2021.

Bangladesh Rural Electrification Board (BREB) had 94 lakh connections at the beginning of 2015. That number climbed to 3.56 crore in January this year.

BBS data also showed that the ratio of the population under the coverage of the national grid grew to 97.54 percent in 2023 compared to 96.86 percent two years ago. Such progress made SHSs less attractive.

Take the example of those residing in the Ghugumari village in the northern district of Kurigram.

People in the remote locality used SHSs until four years ago when the village was connected to the national power network. Villagers then began to switch to electricity, said Mahidul Islam, a resident, over the phone.

"Electricity connection through the grid is yet to come to our area. If we get it, we will switch as well," said the 30-year-old whose home is still powered by an SHS.

Today, SHSs in Bangladesh generate 263.79 MW of power, bolstering the share of renewables in the total energy mix, which is highly dependent on fossil fuels.

A senior official of the SREDA said many of the SHSs installed 18-20 years ago were reaching the end of their lifespan while new SHSs are being installed at a very slow rate.

"People have lost interest in SHSs because of electrification," said SREDA Chairman Munira Sultana.

SM Monirul Islam, deputy chief executive officer and chief financial officer at IDCOL, said state-sponsored financial institutions have discontinued SHS programmes since 2017.

IDCOL provided Tk 4,500 crore in loans to expand the use of SHSs. It could realise all but Tk 550 crore because of the discontinuation of instalments by many clients after the expansion of the national grid.

The non-bank financial institution provided subsidised loans through its partner organisations, mainly NGOs, to encourage the installation of the SHSs.

"However, if we consider our interest income and overall benefit from SHSs, it is a huge success," said Islam.

The WB cited a study and said the Bangladesh Institute of Development Studies found positive, statistically significant impacts on rural families that used SHSs.

"Brighter lighting allowed children to study longer hours. Boys and girls with solar lights studied 10–12 minutes longer per day on average than those without," it said.

Such systems also provided more safety, comfort, and convenience.

"Bright electric lighting afforded a greater sense of security. SHS-powered households had easier and lower cost access to TV, radio, fan, and mobile phone charging."

Other than these benefits, SHSs saved about four billion litres of kerosene from 2003 to 2021 and avoided 9.6 million tonnes of carbon dioxide emissions by offsetting kerosene.

The value of kerosene saved by households between 2003 and 2018 at the retail price is estimated at $908 million.

"Additional savings will continue to be obtained from SHSs that are used beyond 2021 -- though these savings are smaller and accrue to avoiding mainly grid electricity use rather than kerosene avoidance," the WB added.

IDCOL CFO Islam said SHSs had been expanding fast because there were a lot of off-grid areas, which is no longer the case.

Now, the financial institution focuses on promoting solar rooftops of industrial and commercial buildings, solar mini-grids, solar irrigation, and floating solar power projects to increase the generation of renewable energy and enable the government to attain its target.

Earlier, the government set a target to generate 10 percent of the total required electricity through renewable sources by 2021. But it failed.

At present, renewable sources account for 4 percent of the total electricity generation capacity of roughly 30,000 MW.

Nurul Aktar, president of the Bangladesh Solar and Renewable Energy Association (BSREA), said many did not expect the grid network to expand so quickly.

"Such systems become obsolete as the grid expands," he said, blaming a lack of coordination among government agencies.

He said the government would not have encouraged the installation of small SHSs if it had more foresight. Instead, it could have opted for the installation of minimum-sized solar power plants and connected them to the grid once it was expanded to those areas.

"If it could do so, such wastage would not have happened."

"But it cannot be said there have been big losses. The expansion of solar home systems had benefited rural people in many ways, including in education, until they got electricity supply."

In its study, the WB also said SHSs had provided electricity before the availability of the grid connection.

It said the experience with the SHS programme in Bangladesh, one of the largest and most successful in the world, offers lessons that may help other countries implement off-grid programmes to complement grid electrification.

"Design the programme in relation to a clear goal, such as deepening access or reaching universal access… Ensure coordinated planning of on-grid and off-grid electrification, at the highest levels," the Washington-based lender said.