NURUL Amin worked for 31 years in the private sector and invested most of his savings on a six-storey building at Mirpur. When he applied for an electric connection in January, the clerk gave a condition tat he had not planned for: his roof size triggered a mandatory requirement to install solar panels before the meter could be energised. This requirement is a formal mandate. A revised Power Division circular issued in December 2025 makes net-metered rooftop solar compulsory for any building with at least 1,000 square feet of usable roof space applying for a connection, legally binding the owner to a 20 operational commitment.

Then Nurul Amin came across the government’s rooftop solar incentive policy. On paper, there seemed to be a silver lining. He could earn an attractive tariff of Tk 10.50 for every unit of surplus electricity his battery-backed system fed into the national grid. However, his optimism quickly faded on reading the fine print.

Under the new framework, this guaranteed revenue is only locked in until February 28, 2030. For a solar setup he is forced to install and keep running for two decades, his immediate question: what happens afterward? The question exposes the central weakness of Bangladesh’s new rooftop solar incentive, a timing mismatch between a long-lived mandated asset and a revenue guarantee lasting less than three years.

The Power Division’s notification, effective from September 1, is an important step. For eligible systems commissioned by February 28, 2027, surplus electricity supplied to the grid will receive that incentive. The government has benchmarked the generation cost of battery-backed rooftop solar at Tk 8.00 and added a 20 per cent profit margin and an 11.25 per cent premium to calculate the incentive price.

The next day, the data presented in the parliament estimated a purchase rate of Tk 10.15, relying instead on a Tk 6 to Tk 7 cost structure with a 40 per cent margin and a 5 per cent premium. Although both frameworks add up mathematically, they introduce conflicting financial baselines. Because a long-term energy asset demands a predictable 20-year lifecycle, lenders require absolute legislative clarity on which economic framework will ultimately govern the investment.

This creates a strange investment proposition — a system expected to operate for twenty years receives a guaranteed incentive for less than three. Because the ending of the proposed incentive is a fixed date, February 2030, rather than a duration from the project’s commissioning date, early 2027 investors face a compressed recovery window. A system energised this October earns the incentive for roughly forty-one months, whereas one commissioned on the final permitted day in February 2027 receives it for only 36. The offer shrinks with every month of due diligence, rewarding whoever moves fastest rather than whoever builds best. The policy’s central bankability problem is not the level of the tariff but this calendar-based expiry of the revenue support, leaving investors without any clarity on the long-term tariff framework after 2030.

That uncertainty matters because Bangladesh is simultaneously pushing rooftop solar through its broader national programme. The opportunity is substantial. Infrastructure Development Company Ltd estimates more than 3,600MWp of rooftop potential, requiring about Tk 16,295 crore of investment. The textile and garment sector alone accounts for about 2,815MWp. Against that potential, the installed base remains thin. A Centre for Policy Dialogue study counted 4,551 net-metered rooftop installations totalling 213.3MW. The country also has a cautionary precedent in its own off-grid programme, where nearly half of the sixty lakh solar home systems once installed are now reported to be non-functional.

For these investors, Tk 10.50 is not necessarily the main problem. The problem is whether the revenue can be predicted over the life of the asset. For a commercial or industrial consumer, the economics will therefore depend heavily on how much solar electricity is consumed behind the meter and how much is exported. The incentive needs to encourage both, particularly on the large industrial roofs where Bangladesh has the greatest potential. Recent policy discussions have already identified financing cost as a major barrier. The question here is narrower: even if affordable finance is made available, will a lender have a sufficiently predictable revenue stream against which to borrow?

Then there is the issue of payment security. The policy tasks state distribution companies tracking exports and transferring earnings to bank or mobile wallets. Yet, it does not set out payment guarantees, escrow protections, or late-payment interest mechanisms. The structural problem is that the same distribution company measures the export and releases the payment. It is both the buyer and the party that determines what it owes, and a prosumer who disputes the reading needs an independent route for resolution. While demanding these safeguards might seem excessive for a household solar setup, it becomes important if Bangladesh wants to inspire a decentralised army of rooftop producers rather than relying on a handful of large-scale projects.

Power grid risk is another unmitigated threat. When a local grid goes down or a utility feeder fails to accept power, the rooftop system stops exporting. When these restrictions stem from utility constraints rather than system failures, the individual investor should not have to absorb the financial hit. The policy must establish transparent curtailment rules and clear compensation for ‘deemed generation’.

Similarly, the battery-backed structure of the new incentive package needs more rigorous economic grounding. Batteries increase upfront capital expenditure and require replacement over a twenty-year project life. Yet, the policy reduces this complex lifecycle question to a single generation-cost benchmark of Tk 8. While that may be useful as a policy assumption, it does not fully capture replacement and life-cycle costs, especially without a mechanism to monetise the storage services these batteries can provide to the grid.

More importantly, a flat export tariff can mis-price the value of storage. Solar power is harvested under the midday sun, but Bangladesh’s power system breaks under evening peak loads. On August 11, the national demand peaked at 18,043MW at 9:00pm against the supply of 15,036MW, leaving a deficit of about 3,000MW at precisely the hour when rooftop solar is no longer generating.  A battery that shifts clean energy into those critical hours provides a premium service to the grid, one that a blunt, uniform tariff fails to incentivise or reward.

Of course, funding avenues do exist. Bangladesh Bank’s green refinancing facilities support eligible projects at concessionary rates of up to 5 per cent for three to ten years, while Infrastructure Development Company Ltd offers targeted rooftop-solar financing. Yet, the mismatch extends far beyond loan tenure. Existing financing windows and dense documentation requirements remain extremely difficult for smaller or residential borrowers to navigate. Furthermore, a recent study by the Centr5e for Policy Dialogue on industrial rooftop solar underscores the fragility of these economics, demonstrating that investment readiness completely evaporates once commercial borrowing costs cross the 10.5 per cent threshold.

Eventually, energy financing cannot exist in a vacuum; it must match the project’s revenue profile. No bank will willingly issue a 10-year loan for a solar setup whose guaranteed returns expire in less than three. The central bank should, therefore, consider a dedicated, low-cost rooftop-solar credit package with longer tenors and credit guarantees across commercial lenders, creating a streamlined one-stop facility for citizens. But the financing product will only solve part of the problem unless the underlying revenue guarantee is also long enough to support it.

This does not mean the government must promise subsidies forever. A simple, two-pronged reform would suffice. First, the incentive from a fixed calendar date should be decoupled for, instead, a guarantee the tariff for a fixed 10–12 years from the actual commissioning date. Second, the post-2030 rules should be defined today by setting a predictable tariff floor tied to bulk electricity rates. A predictable lower rate is far more useful to a lender than an attractive rate that suddenly disappears.

True policy modernisation also requires enforceable utility payment deadlines, independent arbitration for meter disputes, and clear compensation for grid-enforced curtailment. If Bangladesh wishes to transition from heavy fuel reliance to decentralised solar security, it must stop treating battery storage as a passive commodity and start pricing it as the vital grid-stabilising service it truly is.

Bangladesh does not lack roofs; it lacks a sound investment framework that makes those roofs financially dependable. The new incentive package is a welcome beginning, but it must not devolve into another short-lived programme measured merely by the number of systems rushed online before a hard deadline. The real test of this policy is whether a building owner, a factory manager, and a banker can look at the same framework and confidently calculate what that rooftop solar system will be worth a decade from now.

People like Nurul Amin do not ask the state to subsidise their electricity forever. They simply ask for a baseline regulatory clarity. If the government forces them to buy into a 20-year asset, it owes them an answer to what happens when the clock runs out in February 2030.

Dr Sabbir Ahmad is a technology executive and chief executive officer of Silicon Array Ltd, with experience in digital connectivity, infrastructure and energy.

Dr Sabbir Ahmad is a technology executive and chief executive officer of Silicon Array Ltd, with experience in digital connectivity, infrastructure and energy.