Subsidy Policy Instruments for Rapid Growth of Photovoltaic Electricity Generation in Bangladesh

Bangladesh is a developing country which demands power generation for economic growth. But, a wide gap prevails between supply and demand. To resolve the issue, solar energy could be utilized for electricity generation. The aim of the paper is to propose policy and incentives to address economic barriers for grid-tied ground mounted Photovoltaic (PV) power generation. Market based instruments and policy of some countries were reviewed. Interviews were conducted at both private solar firms and government offices in Bangladesh to learn their responses. The outcome shows that most of the solar firms were unsatisfied about the present policy and incentives of the grid-tied PV power generation for Independent Power Producer (IPP). Thus, the worldwide practiced feed-in tariff (FIT) policy could be adopted. In addition, the estimated tariff was calculated slightly above 28.5 to 35 BDT/kWh or higher for financial viability of such project under existing incentives. Incentive schemes were also proposed for successful implementation. The recommendations will help for policy development and sustainable growth of PV electricity generation in Bangladesh.