Solar Tariff Exemption
In a decisive move to combat its ongoing energy crisis, the Bangladeshi government has announced a landmark policy shift in its FY 2026-27 national budget: a solar tariff exemption. Confronted with severe power shortages and skyrocketing costs for imported fossil fuels, the nation has eliminated all import tariffs, regulatory duties, supplementary duties, and advance taxes on solar components and Battery Energy Storage Systems (BESS).
exemption scope:
- Solar PV modules/panels
- Solar inverters
- Mounting structures
- Lithium cells, Lithium-ion batteries
- Battery pack housing
- Battery Energy Storage Systems (BESS)
- Battery Management Systems
- UV-protected solar DC cables
- Battery thermal management systems
- Other related core components for solar power generation
Zero-Tariff Market Potential
Currently, Bangladesh has an installed renewable energy capacity of 1,797 MW, with the majority (1,504 MW) coming from solar. However, with the country's total installed capacity sitting at approximately 29,000 MW, renewables account for only about 6% of the mix, leaving massive room for growth.
Furthermore, a recent report by the Institute for Energy Economics and Financial Analysis (IEEFA) highlights that renewables contribute a mere 2.3% of Bangladesh's grid power generation-far below the global average of 33.8%. aligned with its Renewable Energy Policy 2025, Bangladesh aims to slash project costs, attract foreign investment, and accelerate rooftop solar and BESS deployment to meet its target of 20% renewable energy by 2030. This solar tariff exemption presents a massive boon for Chinese manufacturers, who serve as the country's primary source of solar equipment, by significantly lowering export costs and boosting competitiveness.
Transforming Commercial ROI and Investment Yields
Beyond lowering import barriers, the budget introduces powerful downstream incentives, including a total corporate income tax exemption for solar power projects until June 30, 2035. For commercial and industrial (C&I) enterprises, investing in an on-site solar plant now guarantees nearly a decade of tax-free profits.
Furthermore, businesses consuming solar power will receive a 5% tax deduction that can be directly offset against their corporate income tax liabilities. This clever demand-side mechanism shifts solar adoption from a passive environmental choice to an aggressive corporate tax-saving tool.