As Bangladesh races toward its ambitious 2041 renewable energy targets, industry leaders are sounding the alarm: a restrictive tax regime that favors a handful of large corporations could bottleneck the country’s entire green transition.

While the proposed 2026-27 fiscal budget introduces several positive initiatives for the power sector, energy experts warn that confining customs and tax benefits to a select few players threatens to stifle the broader market. According to Ataur Rahman Sarkar Rozel, General Secretary of the Bangladesh Sustainable and Renewable Energy Association (BSREA), true progress requires democratizing access to these technologies for everyday consumers, small-to-medium enterprises (SMEs), and the agricultural sector.

“Currently, we have surplus power generation capacity, but surging import costs, foreign exchange constraints, and rising production expenses remain massive macroeconomic headaches,” Rozel, who also chairs Filament Engineering Ltd, noted. “In this climate, decentralizing renewable energy—specifically through rooftop solar and solar irrigation—is not just an environmental goal; it is a matter of national interest.”

The Grassroots Engine of Solar Adoption

A common misconception is that mega-corporations are the primary drivers of Bangladesh’s solar market. In reality, the sector’s momentum is fueled by grassroots adoption. Residential buildings, hospitals, telecom towers, off-grid communities, and SMEs make up the bulk of the consumer base.

Industry advocates argue that without an open, competitive market, a few large firms could establish a monopoly. If duty-free privileges are restricted, independent importers, distributors, and EPC (Engineering, Procurement, and Construction) companies will be priced out. This lack of competition would stifle technological diversity and keep prices artificially high.

The immediate casualty of inflated prices would be the rooftop solar sector. The economic viability of rooftop installations relies heavily on the affordability of components like solar panels, inverters, lithium batteries, and mounting structures. If these remain heavily taxed for general importers, the return-on-investment timeline stretches, effectively killing the incentive for new consumer investments.

Agricultural Risks and the Value Chain

The ripple effects extend deep into the nation’s agricultural heartland, which still heavily relies on expensive, polluting diesel pumps for irrigation. Transitioning to solar-powered pumps is the obvious solution to cut diesel dependency. However, without a highly competitive market to drive down the capital costs of solar structures and batteries, farmers will be locked out of the technology, severely slowing the sector’s energy transition.

Furthermore, a monopolized market threatens job creation. A decentralized renewable energy sector naturally spawns a massive value chain, creating thousands of jobs for local engineers, technicians, sales representatives, and installers. Concentrating industry incentives at the top risks shrinking this potential employment boom, directly contradicting the government’s budgetary promises to boost private-sector job creation.

Short-Term Pain, Long-Term Payoff

Treasury officials are understandably wary of offering sweeping zero-import-duty facilities due to the immediate hit to state revenues. However, experts argue this is a myopic view.

Global case studies from countries like Vietnam, India, China, Germany, and Pakistan prove that an open market system—backed by equal tax benefits, robust net metering, and accessible green financing—rapidly accelerates green energy adoption. The long-term macroeconomic dividends far outweigh the initial tax shortfall. A broader solar rollout drastically reduces reliance on imported fossil fuels, saves critical foreign currency, and alleviates the crushing burden of state power subsidies.

A Blueprint for 2041

To prevent a centralized bottleneck and keep the 2041 targets within reach, the BSREA and industry stakeholders are pushing for an immediate policy pivot. Their core recommendations include:

“Tax and duty benefits on renewable energy equipment should not be viewed as a state expense, but as a critical long-term investment,” Rozel summarized. “If the government’s ultimate budget goals are energy security, economic growth, and sustainable development, an inclusive market is the only realistic path forward.”

Ataur Rahman Sarkar Rozel: Engineer; General Secretary, Bangladesh Sustainable and Renewable Energy Association (BSREA) and Chairman, Filament Engineering Limited.