Bangladesh’s solar power sector is mired in rent-seeking practices and elite capture, inflating costs and distorting solar market efficiency. Our analysis shows that the true levelized cost of electricity (LCoE) for solar should be approximately 5.78 cents/kWh, yet government-sanctioned solar tariffs are nearly double, reflecting regulatory capture and energy sector corruption.
Land acquisition costs, a critical factor in solar project feasibility, are systematically manipulated. While some landowners face forced expropriation, others benefit from artificially inflated compensation, reinforcing political patronage networks. A shadow ecosystem of bureaucratic gatekeepers and political intermediaries controls solar energy project approvals, maintaining a high-cost solar investment landscape that deters new market entrants.
With most projects awarded through unsolicited solar power bids, market competition in Bangladesh’s renewable energy sector remains low, perpetuating crony capitalism and discouraging efficiency-driven investment in solar energy. Reducing solar power costs requires dismantling these entrenched power structures, promoting transparent renewable energy policies, and incentivizing competitive solar bidding to foster a more efficient, market-driven solar sector.
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