Surge in Solar Powered Homes ― Experience in Off-grid Bangladesh

Bangladesh has the world’s fastest growing, off-grid solar home system (SHS) coverage. In the past decade, the number of SHS installations has risen phenomenally—from a five-year target of 50,000 in 2003 to 50,000 a month in 2013, with support from the World Bank and other development partners. Even so, only 10 percent of off-grid households have been reached, suggesting ample room for continued expansion. Given the recent surge in SHS adoption, a key policy issue is whether the partial subsidy provided under the current program, implemented by the Infrastructure Development Company Limited (IDCOL), should be continued.Surge in Solar Powered Homes: Off-Grid Experience in Bangladesh assesses the country’s remarkable growth in SHS, its support schemes, and the welfare impacts for rural households, using both large-scale household survey and institutional data. The book’s findings clearly demonstrate that the social benefits from SHS adoption far exceed the cost of the subsidy. Within the current market incentive structure, there is tremendous scope for broadening the rural market reach. But the high upfront cost of purchasing a SHS at current market prices is a barrier to future sales, suggesting the continued need for IDCOL’s well-targeted, subsidized operation.