Why Do More Than 50,000 Families in Bangladesh Buy a Solar Home System Every Month?

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Image“Does the solar home system work? Do you really get better lights? Or, is it just a big fuss?’ I have been asking solar home systems households in rural Bangladesh these basic questions for the past five years as part of my implementation review missions for the Rural Electrification and Renewable Energy Development program, which has installed over  2.8 million solar home systems since 2002. This has so far contributed to a 9% increase in access to electricity in Bangladesh.

During one of those field trips, in response to my question, a rather elderly gentleman shot back, “I bought this system and am paying for it every month till it is paid off. Do you think I am stupid to pay for something that does not work?” His answer sums up why the solar home system is becoming more popular. People buy the system because it works. Today, over 50,000 households are buying the systems every month.
On field visits to rural Bangladesh, I constantly hear stories about how solar home systems transform lives. A solar home system enables Farida Begum in a village marketplace to run a tea stall from her house while her children study in the evening in a room behind the stall.

Women Empowered by Solar Energy in Bangladesh
Bangladesh is rapidly getting energy with solar home systems

Mussamat Farida tells how she is no longer afraid to step out of her home in the dark - thanks to lighting from a solar home system. "Ever since we got the solar home system, life here has become safer. There are fewer thefts and robberies. The thieves used to steal the cows. Now, that has become much harder because there is light everywhere"           
Fakhruddin of Gazipur district told me how his grandchild got burn injuries when their mosquito net caught fire from kerosene lanterns at home. That incident prompted Fakhruddin to get in touch with a local NGO to install a solar system to light his home. He no longer has to worry about the safety of his grandchildren. With improved lighting, he can also run the tailor shop in front of the house well after dark, and make more profits by working longer hours before festivals.
Why are solar home systems so popular in Bangladesh?
Based on user responses from implementation missions over the past five years, these findings are increasingly becoming apparent:

  • Rising rural income: Improved agricultural productivity and the huge influx of foreign remittances (sent by Bangladeshi workers abroad) make solar home systems more affordable than they were a few years ago. 
  • High population density makes it affordable: Being one of the most densely populated countries in the world has its advantages with economies of scale. The average cost of a 40 watt-peak (Wp) system, which is enough to run 3-4 lights, a mobile charger, and a TV, is about US$300.  This is less than half the cost of a similar system in Uganda, for example.
  • Strong microfinance support from established grassroots NGOs:  The program leveraged the extensive network of non-governmental organizations (NGOs) in Bangladesh. These NGOs are known and trusted by rural households as they have historically provided microfinance for other income generating activities. The NGOs procure and install the systems and extend micro-credit to households for buying the systems. Households now see the NGOs as bringing yet another important solution to meet their energy needs.
  • Technological innovation has been a boon: Thanks to LED lighting, a 20Wp system can now support the same number of lights that previously would have required a 50Wp system. Coupled with the rapid decline of panel prices, this has expanded the market.
What are the key factors that led to the large-scale adoption of solar home systems?

Two elements of program design, I believe, were instrumental in the Bangladesh success, and these are possible to replicate in other countries. The first is the competence of the implementing agency - the Infrastructure Development Company Limited (IDCOL), a government-owned financial intermediary. IDCOL receives funds from the Bank Group and other development partners and channels funds to the NGOs who are in turn providing micro-credit to households for buying the solar home systems.
The second is the close attention paid by IDCOL and the NGOs to ensure quality of the solar home system components. An independent technical standards committee approves system components from various vendors. IDCOL inspectors are in the field year-round checking systems for compliance with approved technical standards. This, along with enforcement of a penalty for not meeting standards, is crucial to ensure that the NGOs comply with them.
All these measures ensure that the program works. An impact evaluation study in 2013 confirmed longer study hours for children, improved health due to improved indoor air quality as well as increased health awareness from watching TVs from SHS, and more participation of women in decision making in certain household affairs.
Every day, solar home systems touch the lives of people in myriad ways, inspiring my day-to-day work.  The goal of reaching 6 million homes or providing 20% of access by solar home systems is now an attainable reality. I feel lucky to be doing something that brings light and a better quality of life to millions of people in far-flung areas of Bangladesh.


Zubair K M Sadeque

Senior Energy Specialist, South Asia Region

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