Bangladesh cuts import tax on solar and storage equipment from 17 per cent to 1 per cent for 180 days, chasing 4 GW of rooftop before next summer

Bangladesh's National Board of Revenue has issued a gazette notification cutting the tax burden on imported solar and storage equipment from 17 per cent to 1 per cent for 180 days. The notification is signed by acting chairman Ahsan Habib. The 17 per cent it replaces consisted of 15 per cent value added tax plus 2 per cent advance income tax, and the new 1 per cent rate is stated to exempt customs duty, value added tax, regulatory duty, supplementary duty, advance tax and advance income tax. The government's stated aim is at least 4 GW of rooftop solar capacity before next summer.

The equipment list is broader than these measures usually are. It covers steel and aluminium mounting structures, photovoltaic DC and AC generators, solar inverters, PV modules, battery management systems, battery thermal management systems, supervisory control and data acquisition systems, and plant monitoring and control equipment.

That list is worth pausing on. Mounting structures, modules and inverters are the obvious contents of a solar import concession. Battery management systems, SCADA and plant monitoring hardware are not: they are the control and telemetry layer, the part that determines whether an installation can be observed, scheduled or aggregated rather than merely connected. A state that zero rates the control layer alongside the panels is, whether or not it has framed it this way internally, making it cheaper to build a fleet that can participate than one that simply exports whatever it produces.

The measure is the second half of a policy that only functions as a pair. Earlier this month Bangladesh set a payment of BDT 10.50 per kilowatt hour, around 8.6 US cents, for surplus rooftop generation under net metering, for systems installed by 28 February 2027. An export payment does nothing for a household that cannot afford the hardware in the first place, and cheap hardware does nothing for a household whose surplus is worth nothing. Bangladesh has now done both inside a few weeks, and the two deadlines roughly coincide.

The 180 day limit is the most revealing design choice in the package. A standing concession builds an industry. A six month concession buys installed capacity, and it buys it from whoever already has inventory, working capital and installation crews. It rewards importers and large installers over anyone who would have to build a supply chain to respond. The phrase "before next summer" in the government's stated target is the tell: this is procurement of peak capacity dressed as tax policy, aimed at a specific season, in a country where summer peak demand and load shedding are a recurring political problem.

Whether that is a criticism depends on the goal. If the goal is to get megawatts onto roofs before a particular summer, a sharp short window is the right instrument and a standing concession would be a slower one. If the goal is a domestic industry, this does the opposite, and Bangladesh does have module assembly capacity that has just been undercut by six months of duty free competition. There is nothing in the available reporting about whether that sector was consulted, and that question should be put to someone.

Several things about this are not established and should not be smoothed over. The report does not give an SRO number for the gazette notification, and it does not say on what date the 180 day window opens, which means nobody reading it can tell when the concession expires. The notification itself was not retrieved. The 4 GW target is reported as a government aim without an attached document or a minister's statement. And this item rests on a single outlet. None of that makes the measure doubtful, but it does mean the operative dates, which are the only part an installer or importer actually needs, are currently missing.

The comparison worth drawing is with India's PM Surya Ghar, which runs on a capital subsidy paid after installation and has spent two years discovering that the binding constraint is vendor capacity and application throughput rather than consumer appetite. Bangladesh is attempting the opposite lever: lower the landed cost of the hardware at the border, set a fixed export price, put a deadline on both, and see what the market does. If it works, it is a cheaper instrument to administer than a subsidy disbursement system, because customs already exists and a subsidy portal has to be built. If it fails, it will fail for the same reason PM Surya Ghar has been slow, which is that somebody still has to climb onto several hundred thousand roofs.