Roof- and ground-mounted solar deployment in Bangladesh is reportedly slowing due to rising prices for panels, inverters and other PV system components.
Project developers in Bangladesh have slowed down developing power plants as the overall cost of PV modules has risen by 15 to 20 percent since the Russian-Ukrainian conflict.
Stakeholders say the ongoing impact of the Covid-19 pandemic has caused shipping costs to soar, and the continued strengthening of the U.S. dollar is pushing up costs further. Imran Chowdhury, regional manager at Sungrow Renewable Energy Development, said the ongoing impact of the Covid-19 pandemic over the past two years and the appreciation of the U.S. dollar against the Bangladeshi taka has had a "serious impact" on renewable energy.
Rising prices for solar panels and inverters are pushing up the overall cost of EPC. Prices for Tier 1 solar modules have risen by 15% to 18%, Chowdhury said, while the prices of well-known inverter brands have risen by 8%. Due to rising prices, project developers are unable to achieve their expected internal rate of return, which is one of the key factors in banks' determination of project financing viability.
Masudur Rahim, chief executive of Omera Renewable Energy, said developers are currently hesitant to move forward with PV projects because transportation costs have doubled and the price of solar panels has risen by 10 to 15 percent.
"Once the PPA is signed, developers have to start projects within a year. Today, many projects may face delays due to procurement delays," he said.
Solar EPC Development Ltd. managing director Ezaz Al Qudrat A Mazid said that PV module prices started to rise a few months ago, while cable and aluminium prices were also rising.
Bangladesh's renewable energy capacity to date stands at 787 MW, of which 553 MW comes from solar. The country aims to reach 40% of its electricity generation from renewable sources by 2041.