Why harnessing the potential of solar power is lagging behind?

Apart from the non dependability of adequate supply from the national grid, there are many rural areas where it would take no one knows how long for power from the national grid to reach. This is because of vast resources that would have to be mobilised for setting up only infrastructures for transmitting conventional electricity to these areas. For such places, therefore, off-grid power or solar power remains the best option. Even a medium sized power plant requires a great deal of investments and takes years to be set up and made operational. But a house in a remote part of Bangladesh can have its needs of electricity met instantly from a single solar panel set up on its roof top. Access to electricity in Bangladesh is one of the lowest in the world. The coverage at present is about 35 per cent of the total population. The rural areas of Bangladesh, where nearly 80 per cent of the population live, are very seriously deprived of electricity. As the conventional national grid-fed electricity can hardly cover one-fifth of the total households, tapping different sources of alternative energy can be used for the benefit of the people. The government in its national energy policy stated that it wants to bring the whole country under electricity supply by the year 2020. But major extension of electricity supply through grid expansion is not a viable option for most parts of Bangladesh in the foreseeable future, mainly due to inaccessibility. There are many areas in the country where electricity from the national grid will not reach in the next 30 years. Some experts say that at the current rate of conventional electrification, it will take decades to provide access to electricity to all people in the country. In contrast, favourable natural conditions, like sufficient sunshine, exist for production of electricity from the sun's ray's on a regular basis throughout rural Bangladesh. To fulfill the vision of universal electrification, this alternative energy source will have to take a vital role for off-grid electricity generation. Of all the non-conventional options for power production, solar power has so far been considered as the most easy and viable one. Solar energy's attributes of needing no fuel, high durability and reliability and being able to operate for prolonged periods without maintenance, make it economical for all types of applications. Expert studies have suggested that as much as 10,000 mw of solar electricity can be produced even in the short and medium terms if the solar option is adopted and aggressively pursued. This amount of electricity would be more than twice the total amount now being produced conventionally for supplying to the national grid. The same would effectively meet the present demand for power and demand in the near future for different categories of users in rural a well as urban areas. What has been holding back progress in this very promising sector, specially in the backdrop of the acute crisis of power in the country? It is not that government has been unaware of the great promises of solar power. In 2009, Bangladesh Bank was reported to have created a special fund to promote the production of solar power. Reportedly, it set up a Taka 2.0 billion fund and for drawing from the same all the state-owned and private commercial banks signed agreements with the central bank. Under its terms and conditions, the banks would draw from this fund under a re-finance mechanism. The banks would take from this fund at a rate of interest of 5.0 per cent only and later lend the same to borrowers in the solar power sector, charging the highest rate of 10 per cent for such loans. The fund was supposed to cater to all ends. It would make available credits to borrowers of this sector on easier terms and conditions. Usually, the lending rate from the financial institutions is well above the double digits in most areas of credit extension. The financial institutions now charge interest between 14 to even 16 per cent for loans in different areas. But getting the same at maximum 10 per cent rate of interest as a result of the special initiative from the Bangladesh Bank, individuals and institutions wishing to be supplied with solar power, would feel encouraged to come forward in much greater number. This was the good intention from Bangladesh Bank. But very regrettably, it appears to have been defeated by lack of interest by the banks. The banks are reportedly showing no interest in this special scheme of the Bangladesh Bank as they find it as not so profitable. They like to extend credit to trading, unproductive sectors and as consumer loans where they can charge much higher rate of interest from customers. The management of some banks contend that they do no have extensive countrywide networks to utilize this scheme from the central bank. But they could, of course, use the NGO network for the purpose. Why the banks are not working for the success of the scheme is transparently their profit maximisation motive. The higher national economic interests to be served by promoting solar power is not their concern. Thus, Taka 1.97 billion out of the Taka 2 billion refinance scheme is lying idle with Bangladesh Bank, according to reports. It is imperative that Bangladesh Bank should have urgent and productive discussions to exert its influence on the banks to have this solar power promotion scheme implemented fully and at the fastest. The banks may be advised by the Bangladesh Bank on how to go about doing this and told to take up this scheme as a matter of priority. Government has reportedly made import of solar panels and other paraphernalia duty-free to encourage more people to opt for solar power. But according to media reports, a section in the National Board of Revenue (NBR) is playing tricks and is not allowing the importers of enjoying this fiscal incentive. In one way or the other, they want the importers pay duties on import of solar panels. The users in Bangladesh are, thus reportedly, not getting the benefits of duty-free imports. Although the costs of solar panels and other devices have fallen by about 50 per cent in other countries during 2010, consumers in Bangladesh are hardly getting the benefits of such price decreases. Government should investigate such improper actions by a section of the NBR personnel and take appropriate measures. The making of solar panels and related equipment also needs to be promoted in the country through the giving of special fiscal concessions to entrepreneurs who would join this field.