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     Volume 8 Issue 69 | May 15, 2009 |

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Cover Story

A Solar Dream

With some of the worst load shedding in living memory, this year should stand as an example of just how bad things could get if we do not act on our current energy problems. Depressingly things could actually get worse before they get better, but for Bangladesh to euphemistically step out of the darkness and into the light, we may need to look at alternative sources of energy to solve our problems. Wind and hydropower have a limited scope of success in Bangladesh, but could solar power provide us with a viable solution to our nagging energy problems?

Nader Rahman
Photos: zahedul I Khan

Solar power is not new to Bangladesh, since 1996 companies have tried to market solar energy systems to the public. Yet in a technologically backward country like Bangladesh the idea took a fair while to gestate. Grameen Shakti likes to think of itself as one of the solar pioneers in Bangladesh, having started operations in 1996 they found the reality of solar energy difficult to deal with. Initially people were simply interested in how the sun could provide electricity, then slowly that inquisitiveness turned into a genuine interest to own such a system. The problem with such futuristic technology was that the expectations almost always outweighed what the systems could achieve. Most thought a simple system could power an entire household quite easily, and while that is essentially achievable now, in the mid nineties solar technology was a long way from doing anything remotely as efficient as that. But after everything was explained thoroughly the main problem of solar energy was its price. The first systems were very expensive with little or hardly any energy being produced. So on top of being expensive the systems did not provide much electricity, it was a tough product to market and sell, yet at Grameen Shakti they knew they had come across something special. They decided to persevere with the product and now nearly 15 years later they have sold a whopping 230,000 solar systems all in the heart of rural Bangladesh.

The average 50-Watt system will provide four lamps and one black and white TV.

Dipal Chandra Barua, Managing director of Grameen Shakti says, “Between 1996 and 2003 we installed 10,000 solar systems. While that may not seem like much, they were worth their weight in gold. Selling those 10,000 systems gave us belief that we could really provide alternative energy for Bangladesh. To us those first 10,000 seemed like 10 million and those people were real pioneers.” But simply being a pioneer does not guarantee one success and in 2003 the government finally stepped in to help the fledgling industry. That was the year the Infrastructure Development Company of Bangladesh (IDCOL) made its first foray into financing the desperately under financed sector. It was the shot in the arm that the industry needed and since then the growth in solar energy has been exponential. Barua says, “from selling 10,000 units in eight years, we now sell 10,000 units a month and I still don't feel like we are living up to our potential. If the sector is given proper government support, then solar power could help augment the power supplied by the national grid.”

This is where the issue really starts to get tricky. Currently IDCOL has rather strict rules that govern the financing of solar power. One of its prerequisites is that the solar units they finance must be provided to off grid areas of the country, places the national grid has yet to reach. While from a developmental point of view the idea seems good, if one were to take a more practical stance on the issue then it could be said that IDCOLs prerequisites are too strict and provide no genuine reason to leave out urban areas from the power of solar energy. There is some logic to their plan, in a country where over 60% of the population does not have proper access to electricity in a way it makes sense for solar energy to be forced onto those who have nothing. At least the 'advancement' of electricity is not leaving them behind. But their decision is also short sighted for a number of reasons.

Solar power could help augment the power supplied by the national grid.
Currently everything except the solar panel is assembled and made in Bangladesh.

Solar energy systems are not cheap, even though they are being provided to villagers at rock bottom prices, a 50 Watt system which will provide four lamps and one black and white TV costs a fortune in rural terms at TK 27,000. Only because Grameen Shakti provides their own three-year financing deals which reduces the price to 36 manageable monthly instalments are these solar systems actually being sold. If people were asked to fork out all the cash at the time of purchase one feels Grameen Shakti would be selling solar energy systems in single digits, not in the tens of thousands they currently are.

Dipal Chandra Barua

Basically selling expensive energy systems even if they are renewable and help rural developmet, to villagers it just does not make complete sense.

What IDCOL should do is to allow the sale of solar energy systems to rural as well as urban areas, because at first they must create a market for the product. Only after there is significant demand and after companies start to turn a profit from the business will the technology really start to mushroom.

The cost of solar systems is often out of reach of the average villager, yet possibly millions in urban areas could afford such systems. From the businesses point of view there would also be the possibility of increased fully paid one instalment purchases, thereby speeding up turnover and also freeing up the money they paid for the solar panels. With the current financing schemes, it takes years for a company to make back the money they put into every system, in the cities with increased one instalment purchases companies will be able to plough back their earnings into the business, thereby making them more interested to continue their trade. While IDCOL currently has 15 partner organisations such as Grameen Shakti only a few are using the potential of solar energy to the fullest. Most of the companies sell well below a thousand units a month and with the prices they charge and the market they are looking at, it is easy to understand why. Immediate steps have to be taken to bring this technology into the cities because that is where the real market lies, that is where people can afford to pay such prices. Only after companies start turning a profit will they be interested in really pursuing this business and has yet to be achieved. With over 300,000 units installed all across Bangladesh the programme has been a success, yet those figures could be doubled and trebled in just a few years if the power of solar energy could be introduced to modern city life.

Anwar Rahim a 60-year-old real estate developer says, “With all the load shedding that's going on and the persistent power troubles I would be more than happy to purchase a solar powered energy system. They are roughly the price of the generators and IPSs in the market and most importantly they do not need to be refilled with pricy fuel or batteries. It would be an ideal solution to our current troubles.” His words have been echoed around the city as people are now desperate to find anything that will relieve them from our current electricity woes. If renewable energy spread around the city and more densely into the countryside there could also be a silver lining for the consistently debt ridden Bangladesh Petroleum Corporation, as conceivably such a 'silent revolution' as Barua puts it could reduce our fuel exports. But all of that is into the realms of fantasy, for the time being the industry has to be made competitive and must sell its product to everyone who can afford it. Only when the profits start rolling in will more people be interested to enter the business and the increased competition should also potentially push the price lower than it currently is.

Solar energy systems are currently only allowed in areas the national grid has yet to reach.

Here in lies another problem, currently the prices of solar energy systems are very high. only when they fall considerably will the product really take off in rural and urban areas. Barua says, “Currently everything except the solar panel is assembled and made in Bangladesh. We import our panels from Japan and that is where our prices really increase. We have been asking for a removal of the import tax, the advanced income tax and VAT so that this sector can be encouraged to grow. If that occurred then we would be able to charge much less per unit.” Barua also cites the importance of the government in encouraging solar power, he says, “The Prime Minister recently said that she would remove all taxes and VAT from renewable energy and for us and the whole sector, that was a great day. Now we have to anxiously wait for next month's budget to see just how the new system will work. If everything happens as she has said, then it would be a new dawn for renewable energy, especially for solar power.”

The new CEO of IDCOL, Islam Sharif, also feels strongly about the cost of solar energy. He says, “It (solar energy) is a sector that needs to be paid attention to on an emergency basis. It is easy to see its potential, yet just as easy to see its weaknesses. I am doing my best to try and make factories to produce solar panels here in Bangladesh. Currently an imported solar panel accounts for 60% of the cost of an entire solar energy unit, if that cost could be reduced by producing the module in Bangladesh, then aside from creating jobs, it would greatly reduce the price of such renewable energy systems.” Sharif who took over his new job just over a month ago also feels that the productivity of IDCOLs partner organisations has to be increased. If productivity could be increased, along with the fabrication of the solar panels in Bangladesh then a solar energy unit's price could be drastically cut. Only then would the technology really start to make inroads into the countryside and cities of Bangladesh.

The challenges facing the industry have clearly been spelled out, the prices of systems must be reduced and they should be made available to urban as well as rural areas, but now comes the question on everyone's mind. Can solar energy solve our current energy problems? The answer is not an emphatic yes or no, but a cautionary maybe. This also depends on how one wishes to define 'solve'. If by solve, one means generate 2000 Mega Watts in the near future and end our problems completely then the answer is no. If by solve, one means to augment our current energy needs and liberate many remote places which will take years for our national grid to reach, then the answer is yes. In the near future solar power will not be the answer to all our energy problems, but it will be the answer to some.

On this issue Barua says, “Solar power could provide more for Bangladesh than one realises. In Europe there is now a system called 'Feed-In Tariff' which is working remarkably well. The system is very easy, those who produce renewable energy no matter how small are connected to the national grid. Since solar energy is being produced all the time there is a constant flow into the grid and energy is measured and then paid for at a higher rate than normal energy by the government. Being renewable energy it is priced higher than normal power and then everyone, even home users can do good to their nation by providing energy to the national grid as well as earning money from their systems. It would be a dream scenario in Bangladesh and most importantly it is all possible if only more people who are currently connected to the grid are allowed to purchase solar energy systems.” The idea is currently being used around the world from California, to England to Australia. Interestingly, Feed-In Tariffs have been associated with a large growth in solar power in Spain, Germany and wind power in Denmark. It currently supplies 9%, 5% and 20% of their electricity respectively. The possibilities of solar power are endless and if used properly then they could have a bright future in Bangladesh, helping out more than just our rural populace.

What is also difficult to measure are the positive externalities that solar power creates, in the villages it makes people self reliant, in the cities it could wean us of the horrible habit of using fossil fuels to fill the gaps in our energy system. The current Energy Minister has promised tax holidays for all businesses that use solar power so it could also usher in an age of green business in Bangladesh. Sharif says, “Solar power could really at one point be the driving force behind Bangladesh. All we need is the proper policy support from the government and we could well be on our way to success.”

Solar power has started to revolutionise village life, now all it needs is a strong push
and an entrance into urban city centres.
Aside from providing electricity to areas that had none, women have also been central to the development and dissemination of the technology.

The father of solar energy in Bangladesh, Dipal Chandra Barua is a soft-spoken man who does not take the challenge of solar power lightly. Anyone who enters his office is handed a piece of paper that speaks volumes about his dedication to the issue. On the paper there is a quote of his which says, “I have a dream of empowering 75 million people through renewable energy technologies”. It also highlights his vision for 2015 which includes a whopping 7.5 million solar home systems to be installed and a massive 100,000 green jobs to be created. When asked about it, he smiles and politely says, “I'm allowed to dream aren't I?” Who knows maybe one day his dream will come true. If one only has the commitment and conviction of Barua, then anything is possible. The sky's no longer the limit, the sun is.


Copyright (R) thedailystar.net 2009