Bangladesh’s apparel industry, the country’s largest export earner, is eager to expand rooftop solar to reduce fuel imports, cut carbon emissions, and meet global compliance standards. Industry leaders say the sector has the potential to generate 2,000 megawatts of solar power, which could save the government Tk2,500 crore annually on fuel costs. But entrepreneurs warn that steep import taxes on solar equipment are making projects far more expensive and slowing down adoption.
Currently, installing industrial-scale solar panels requires 13 types of equipment. While solar panels and inverters face just 1% tax, other key items, representing nearly half of installation costs, are taxed at 62% to 77%. As a result, solar projects in Bangladesh cost 30 to 50% more than in India, undermining competitiveness. According to Saleudh Zaman Khan, Managing Director of NZ Textile Limited, a project that costs Tk2 crore in India can rise to Tk3 crore in Bangladesh because of these duties.
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The National Board of Revenue (NBR) has argued that tax breaks are limited to protect domestic manufacturers and prevent misuse. However, apparel factory owners counter that most of the heavily taxed items are not produced locally at the required quality, making imports unavoidable. They have proposed safeguards such as certification by experts rather than blanket duties that discourage green investment.
Some leading exporters such as NZ Textile, Fatullah Fashions, and Rising Group have already begun installing solar capacity. NZ Textile has reached 10 MW with plans to expand to 30 MW, while Fatullah Fashions aims for net-zero carbon by generating all its electricity through solar within five years. Yet industry insiders say progress remains slow compared to the scale needed.
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The challenge comes at a critical time. The European Union, which buys about half of Bangladesh’s apparel exports, has adopted strict carbon compliance rules including the Carbon Border Adjustment Mechanism (CBAM). These measures will penalize exporters with high carbon footprints, making renewable energy adoption essential to protect Bangladesh’s market share.
Industry associations argue that removing or reducing import duties on solar equipment, alongside easier access to green financing, would help exporters transition faster. Without such support, Bangladesh risks missing both its own goal of raising renewable energy’s share from 5% to 20% by 2030 and its ability to stay competitive in the global apparel market.