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

Starting from 2003, the SHS program of IDCOL has so far ensured supply of solar electricity to about 20 million people i.e. 12% of the country‘s total population. By June 2018, about 4.13 million SHSs have been installed under the program in remote areas, which is a considerable success in terms of providing access to electricity to a vast majority of the off-grid population in Bangladesh. The program sees ups and down, having reached its peak in 2013 when average installation of SHS was about 71,033 per month. Afterward, the installation rate started declining. During the last one year or so, the sales of SHS came down to about 891per month. This has posed a serious threat to achieving IDCOL‘s target of 6 million SHS installation. The factors such as sales of SHS at a lower price in the unregulated open market, a significant expansion of grid connection by Rural Electrification Board (REB), and the free distribution of SHS under KABITA and TR (two social safety net programs) programs as well as an absence of new demand are thought to be responsible for the current dwindling situation of the SHS market. IDCOL is also 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. 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 mainly attempts to assess the current market situation of the SHS program along with the impact of SHS on household welfare and based on the findings it aims to recommend some necessary measures that might improve the current default situation as well as help IDCOL to lay out a viable exit strategy.

Team Members: Monzur Hossain, M. Asaduzzaman, Mohammad Yunus, Jamaluddin Ahmed, Kazi Ershadul Alam, Zabid Iqbal and Paritosh Kumar Roy

Completed in November, 2018