MCC Limited Bangladesh Institute of Development Studies
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BIDS
Premier multi-disciplinary autonomous public research organization

Assessing the Current Situation of Solar Home System (SHS) program of IDCOL and Recommending Action Plan

Since its introduction in 2003, the SHS program of IDCOL has ensured supply of solar electricity to 18 million people i.e. 12% of the country’s total population who previously used kerosene lamps for lighting. By April 2017, about 4.11 million SHSs have been installed under the program in remote areas, which is a considerable success in terms of providing access to electricity for all citizens of Bangladesh. The program reached its peak in 2013 when average installation of SHS was about 71,033 per month. However, the average installation rate started declining since then. During the last 4 months, it was about 5,012 per month. This has posed a serious threat to achieving IDCOL’s target of 6 million SHS installation. Introduction of alternative SHS at a lower price by a new supplier, a significant increase of grid connection by REB, and the distribution of SHS under KABI/TR program or absence of new demand are perhaps the key factors that contributed to the above drastic decline of IDCOL’s SHS installation. Along with this problem, IDCOL is facing two other important challenges. First, a substantial number of SHS customers who have connected to the grid have returned their SHS systems because of massive expansion of grid electricity. Second, customers who are currently using SHS did not return the system and stopped paying their due installments. Over-all the SHS program of the IDCOL is in jeopardy to the brink of abandonment. Therefore, IDCOL wishes to assess if and how this situation may be improved for the future viability of the program. Against this background, the present study will assess the current market situation of the SHS program and recommend necessary measures to improve the situation.

BIDS Team: Dr. Monzur Hossain (Team leader), Dr. M. Asaduzzaman, Dr. M. Yunus; Dr.  Zabid Iqbal

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