February 15, 2006

Solar Energy Technology in Bangladesh – Why?

According to a World Bank funded market survey, there is an existing market size of 0.5 million households for Solar Home Systems (SHS) on a fee-for-service basis in the off-grid areas of Bangladesh. This assessment is based on 1998 expenditure levels on fuel for lighting and battery charging being substituted by SHS. Also it has been observed that in most developing countries, households typically spend not more than 5% of their income on lighting and use of small appliances. By this measure, about 4.8 million rural Bangladeshi households could pay for a solar home system. There is no solar resource constraint for the application of SHS as solar energy is abundant throughout the country.

At present the national grid is serving only 50% of the nearly 10,000 rural markets and commercial centers in rural areas of the country which are excellent markets for centralized mini solar photovoltaic plants. Currently private diesel genset operators are serving in most of the off-grid rural markets and it has been found that 82% of them are also interested in marketing SHS in surrounding areas if some sorts of favorable financing arrangements are available.

Therefore, in those rural areas which cannot be electrified by grid extensions; off grid centralized or single Solar Home Systems (SHS) may be provided for lighting 100,000 households through SHS by 2008 is quite feasible. 100,000 SHS would annually displace 18 million litres of kerosene. Since both, kerosene and diesel are imported in Bangladesh; any reduction in their consumption would help reducing foreign exchange outgo besides making the country that much more secure in terms of energy supply. Due to recent price hike for oil the cost of generation for PV and diesel generator are similar. For Rajshahi, it was found from RET-Screen analysis that for 100kW generation using PV cost is $0.19/kWh while for diesel generator it is $0.21/kWh.

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