Civil society organizations have welcomed the government's decision to exempt renewable energy equipment, particularly solar technologies, from import duties, Value Added Tax (VAT), and Advance Income Tax (AIT) in the proposed FY2026–27 national budget, describing it as a significant step toward accelerating Bangladesh’s clean energy transition.
However, they expressed concern that a recently issued National Board of Revenue (NBR) Statutory Regulatory Order (SRO) could limit access to these incentives and undermine the country's renewable energy goals.
The observations came at a press conference titled “Energy Sector in the National Budget: Civil Society Perspectives”, held on Sunday in the capital, Dhaka.
The event was jointly organized by the Coastal Livelihood and Environmental Action Network (CLEAN) and the Bangladesh Working Group on Ecology and Development (BWGED), with support from the Bangladesh Environmental Lawyers Association (BELA), Ethical Trading Initiative (ETI) Bangladesh, and Manusher Jonno Foundation (MJF).
The keynote paper was presented by Hasan Mehedi, chief executive of CLEAN and member secretary of BWGED.
According to the organizations, removing taxes on solar equipment could reduce the installation cost of rooftop solar systems by 30% to 37%, making renewable energy more affordable for households, businesses, farmers, and industries.
They said the measure could help reduce dependence on imported fossil fuels, ease pressure on foreign currency reserves, and accelerate progress toward Bangladesh’s target of installing 10,000MW of solar power by 2030.
“This is not merely a tax reform; it is a strategic investment in Bangladesh’s energy security, economic resilience, and climate future,” Hasan Mehedi said.
Despite welcoming the tax incentives, the organizations raised concerns over an NBR SRO issued on June 8, 2026, which limits eligibility for the exemptions primarily to VAT-registered Renewable Energy Service Companies (RESCOs) operating under Power Purchase Agreements (PPAs).
They argued that the regulation could exclude millions of residential consumers, small entrepreneurs, farmers, solar irrigation operators, and community-based renewable energy initiatives from accessing the benefits.
“While the government has taken a bold step toward expanding renewable energy, the NBR’s restrictive SRO risks becoming a major obstacle to that transition. The benefits must be available to all citizens, not only a handful of large corporate developers,” Hasan Mehedi added.
The speakers also pointed to what they described as contradictions in the national budget.
Although the finance minister acknowledged the growing economic burden of imported liquefied natural gas (LNG), tax exemptions for LNG imports remain in place. The budget also extends incentives for coal imports and supports refinery expansion and other fossil-fuel infrastructure projects.
According to the organizations, these measures risk locking Bangladesh into costly, import-dependent energy systems while slowing the transition to cleaner alternatives.
Data presented at the event showed that the government has allocated Tk17,193 crore for the power and energy sector in FY2026–27, of which only Tk379.24 crore, or 2.2%, has been earmarked for renewable energy initiatives.
Research cited by the organizations estimates that Bangladesh requires at least Tk21,750 crore annually to meet its renewable energy targets by 2030, including a minimum public investment of Tk6,750 crore per year.
To address the financing gap, they proposed the establishment of a Tk25,000 crore Renewable Energy Fund, which would provide low-cost financing to households, entrepreneurs, farmers, and renewable energy developers through commercial banks.
Syeda Rizwana Hasan of BELA said renewable energy commitments must be backed by adequate budgetary support and effective implementation.
“Renewable energy targets must be matched with budgetary support and effective implementation. Rooftop solar alone is not enough; we need broader investment to address energy inequality and load shedding beyond the capital,” she said.
Munir Uddin Shamim, director of ETI Bangladesh, said an inclusive energy transition requires equitable access to opportunities.
“A green energy transition cannot happen with existing inequalities. The government must provide incentives for decarbonization and align policies to meet future renewable energy goals,” he said.
Monowar Mostafa, networking adviser of CLEAN, emphasized the economic benefits of accelerating renewable energy deployment.
“Accelerating renewable energy is a national priority. The faster we move, the greater the economic benefits. We must rethink policies that create barriers for this sector,” he said.
The organizations urged the government to take several measures to support the renewable energy sector, including:
- Revoking the June 8 NBR SRO and extending renewable energy tax exemptions to all users for the next 10 years;
- Establishing a Tk25,000 crore Renewable Energy Fund through Bangladesh Bank;
- Providing direct subsidies of at least Tk25,000 per kilowatt for residential rooftop solar systems, with additional support for women and Indigenous communities;
- Operationalizing Corporate Power Purchase Agreements (Corporate PPAs) and introducing competitive wheeling charges;
- Requiring all new utility-scale solar projects to include at least 20% Battery Energy Storage System (BESS) capacity;
- Launching nationwide renewable energy skills development programs capable of creating more than one million green jobs annually;
- Introducing progressive emissions taxes on fossil-fuel-based power generation and highly polluting industries.
The organizations said Bangladesh’s energy challenges are driven more by policy choices than by resource constraints.
They argued that the country now faces a critical decision between continuing an energy model heavily dependent on imported fossil fuels and pursuing a more resilient, self-reliant future powered by renewable energy.
“The decisions taken today will determine Bangladesh’s energy security, economic stability, and climate leadership for decades to come,” the speakers said.
