Let There Be Light
Bangladesh has surprised everyone with its high penetration rate for solar home systems.
Since 2007, the World Bank has been consistently increasing the percentage of its total energy financing towards non-renewable projects. No country has shown the kind of receptiveness to these projects as Bangladesh. The Infrastructure Development Company Ltd (IDCOL), which is owned by the government of Bangladesh, has implemented a massive Rural Electrification and Renewable Energy Development Project (RERED) with funding provided by the World Bank. Under the project, around 3 million home solar systems (SHS) have been installed in the country.
The IDCOL operates with the help of 30 local partner organizations that sell and install the systems as well as carry out their maintenance. A typical 50 watt solar home system costs around 25,000 Takkas which equals to less than 250 Euros. One solar home system produces enough energy to run low-power DC appliances, such as lights, radios, sockets for battery rechargers and even small TVs for about three to five hours a day.
Munawar Misbah Moi works as managing director of a Dhakabased company that manufactures photovoltaic units. He believes that being able to power even these relatively small appliances makes a huge difference to the people’s lives. “It’s unbelievable, and until you see
it, it’s very difficult to explain. Let’s say, you go to a remote rural home where they’re burning kerosene lights. Suddenly, overnight ( because it only takes four hours to install a typical system), that home has proper lights and a connection to TV – it’s transformational. And the quality of life keeps on improving, especially in terms of late hour education,” says Moin.
Those who want to buy solar home systems either pay cash or use the option of paying monthly installments through microcredit schemes that make solar home systems an affordable option for the average rural family. The greatest benefit of the program is its easily accessible partner organizations that have a permanent presence in rural areas. They offer microcredit facilities as well as technical assistance. Interestingly, most of their technicians are women who install the system, offer guarantees and perform free maintenance.
The success of this well-established network has prompted the World Bank to lend further support to the government of Bangladesh. It has offered $78.4 million in order to finance some 480,000 solar home systems.
Solar home systems are standalone equipment that use batteries powered by photovoltaic units. These units consist of solar cells that directly convert sunlight into electricity. This has proved a cost-effective method of supplying electricity to remote households that are out of the grid’s reach.
Nearly 60 percent of Bangladeshis do not have access to electricity generated by the grid. The government aims to bring this number down to zero by providing 100 percent access to electricity through solar home systems by 2021.
The solar home systems have significantly contributed towards the improvement of the standard of living of Bangladeshis by facilitating access to information and communication. Many clinics use them to provide electricity during check-ups and even surgeries. Women benefit the most from owning a solar home system. They feel safer after dark and it also increases their mobility.
Apart from social benefits, the solar home systems also offer significant income-generation avenues. Many women have used the increased working time provided by solar home systems to start small businesses such as handicrafts and poultry. Many businesses can remain open for longer durations, including grocery shops, restaurants and tailoring shops. These systems have also increased production in areas such as rice processing, fishing and poultry farming.
Furthermore, they have resulted in the creation of a multitude of jobs, ranging from those which deal with assembling solar panels to the ones that involve selling, installing and maintaining them. The number of solar home systems in Bangladesh has jumped from 25,000 to 2.8 million in the last ten years, resulting in the creation of over 114,000 jobs. In fact, the number of jobs related to this industry has doubled in the last two years. It is expected that the industry will further expand in the coming years.
However, this high penetration rate is a recent phenomenon and became possible largely due to the support of the World Bank. In 1996, when solar systems were first introduced in Bangladesh via the Grameen Shakti program, spearheaded by the Grameen Bank, the cost of the solar modules was US$7 per watt - far too high for the average rural person to afford. But as the cost reduced and financing became easier, the interest in solar home systems grew. The Managing Director of Grameen Shakti, Dipal Barua said that the key factor was bringing the amount spent on a solar home system closer to the cost of kerosene used every week. The prices did not have to match because the solar home system provided benefits that kerosene didn’t. “You can’t watch television on kerosene,” said Barua.
By 2003, there were 20,000 solar home systems in Bangladesh but the penetration rate was still minimal, considering the large population of more than 150 million people. It was during this time that the World Bank, looking at the growing interest in solar-powered energy, started granting soft loans to NGOs and microfinance organizations. By 2011, about 30 organizations were installing more than 40,000 solar home systems a month. Today, this figure stands at more than 70,000 - the highest penetration rate for solar home systems in the world.
Domestic manufacturing, partnerships with local organizations and establishment of microfinance facilities have contributed towards this overwhelming success of solar home systems in Bangladesh. While domestic manufacturing helps in keeping the costs low, the involvement of local organizations and the introduction of microfinance help in the implementation and reach of these systems. Such a model can be replicated in developing countries and across the world to ensure a more sustainable and cost effective future in terms of fulfilling energy requirements.
The writer is currently pursuing a BBA degree. She focuses on marketing and social issues.