Bangladesh's acclaimed solar home scheme is facing difficulties in recent years due to "lack of coordination" among relevant government agencies, according to a new report.
The installation of new solar home systems is drastically falling in the country in recent times while employment in the sector is also shrinking lately, said the report from the International Renewable Energy Agency (IRENA).
The findings were part of the agency's annual review report titled "Renewable Energy and Jobs" that came out recently.
"Bangladesh's solar home systems programme has successfully deployed more than four million systems in rural areas. However, the lack of coordination among government entities in rural electrification has recently been causing difficulties," the IRENA report said.
After grid connection through the state-run Rural Electrification Board, many households have stopped making installment payments on their Solar Home Systems.
"New installations have reportedly fallen to an average of 2,000 a month from as high as 60,000 to 70,000 in earlier years", the report said.
Apart from growing expansion of grid connection, the IRENA report noted that the free distribution of solar panels under the TR-Kabikha project has also weakened the programmes of state-owned renewable energy promoter Infrastructure Development Company Limited (IDCOL).
Notably, the report found that a mixture of all these factors have translated into reduced solar PV employment, estimated to be 133,000 jobs this year from 140,000 a year earlier.
With the installation of five million systems over the last two decades, Bangladesh's solar home scheme has often been dubbed a "role model" for the world.
The government, meanwhile, has set a target of meeting 10 per cent of the country's total energy demands through renewable energy sources.
This means increasing the renewable energy generation capacity to 2,896.68 mega watts (mws) by 2021, more than half of which (1,470 mws) is expected to come from solar power by that time.
In this context, the latest IRENA report depicts a grim picture for the future of renewable energy in the country.
When asked about the reason for such a trend, insiders within the renewable energy sector admitted that the growing expansion of grid connection in rural areas is indeed resulting in less demand and expansion of solar power in the country.
"Solar Home Systems are quickly approaching a saturation level in Bangladesh", said Siddique Zobair, who is the Member of the state-run Sustainable and Renewable Energy Development Authority.
"I don't think there is any real lack of coordination as cited in the report", Mr Zobair said, "Rather, the growing energy demand in the rural areas and the increased availability of grid electricity through REB means that even village people are now opting for grid connection instead of SHSs".
Bangladesh has increased its power generation capacity more than four times in the last nine years. Meanwhile, some 72 per cent of rural areas have already been brought under electrification coverage.
The REB is currently targeting to cover all 460 upazillas under electrification by 2018 while increasing the number of consumers to 240 million and the number of villages under total electrification to 84,000 during the same period.
"Solar remains a viable energy solution only in very remote areas, a large chunk of which has already been covered by the five million strong SHS program of the country", he added.
Insiders, however, pointed that the growing cases of non-payment of installments for SHS lending is resulting in substantial outstanding loans in the sector, the amount of which is currently estimated to be around Tk. 15 billion to Tk 18 billion.
"This is truly a major concern", said Dipal Barua, president of the Bangladesh Solar and Renewable Energy Association.
"While the expansion of grid electricity or the free distribution of solar panels under TR-Kabikha is a welcome initiative, the government also needs to focus on the growing amount of SHS loans arrears", he added.
Experts also noted that the increased availability of grid electricity does not necessarily mean the end of solar and other renewable energy sources. "Despite some limitations, solar energy is still less costly for the consumers and friendlier for the environment", Mr Barua said.
Recently, the government has moved to introduce net metering system under which the consumers having minimum 10 kilowatts of electricity load will get the opportunity to sell their PV rooftop-solar power to the national grid.
"Innovative schemes like this can help the country to increase its reliance on solar and renewable sources. Because, in the end, green energy is the future for the globe," Mr Barua said.
