Bangladesh has introduced a new incentive scheme for rooftop solar panels paired with battery storage, in a bid to alleviate chronic power shortages and cut reliance on imported energy, Reuters reported.

The country of 175 million people is facing its worst electricity shortfalls in years, driven by a lack of natural gas and rising concerns over global fuel supplies amid ongoing Middle East tensions.

Under the plan, consumers who install eligible rooftop systems by February 28, 2027, will receive 10.50 taka/KWh ($0.086/KWh) for surplus electricity sent to the national grid, for a period of three years, according to an official government notice.

Bangladesh has set targets to generate 20% of its electricity – about 5,500 MW – from renewables by 2030, and 30% by 2040, as part of efforts to reduce dependence on foreign fossil fuels.

The move follows peak power shortages of nearly 4,000 MW in August, which caused rolling blackouts across the country. Gas shortages have forced many plants to run below capacity, while coal and fuel oil supply constraints have added further strain.

At the same time, Adani Power has attributed the recent drop in electricity supply to Bangladesh to disruptions in coal transportation by rail, saying the shortage has forced its Godda plant to cut output.

The reduced supply has deepened Bangladesh's ongoing energy crisis, with load-shedding exceeding 3 GW recently and the government forced to manage fuel shortages on an almost daily basis.

The government has been racing to secure oil and LNG supplies, but long queues at CNG stations, lower factory output, and frequent outages have underscored the severe economic and social impacts.

The authorities have set a cap of 8 taka per unit for the generation cost of rooftop solar including battery storage. The incentive includes a 20% profit margin and an extra premium. Consumers who install systems below that cost benchmark may keep the savings.

Bangladesh currently has about 1,559 MW of renewable capacity, mostly solar. Officials view rooftop installations as a quicker way to expand generation, alongside large-scale renewable projects.

With instability in the Middle East raising fears of price swings and supply disruptions, the government sees rooftop solar as a relatively fast and affordable solution to boost clean energy, especially in one of the world's most densely populated countries. Battery storage is expected to help households use solar power after dark and lower grid demand during peak hours.