Bangladesh issues special ordinance to accelerate distributed solar deployment

Bangladesh has issued a special ordinance to facilitate private-sector investment in rooftop solar installations on government buildings under Opex and Capex models, as the country seeks to accelerate renewable energy deployment.

Under the Capex model, project owners finance and own the solar installations, while under the Opex model, third-party developers finance, install and operate the systems, with consumers typically paying for the electricity generated under long-term agreements.

The Special Solar Power Installation Ordinance, 2026, is intended to support the government’s ambitious target of adding 3 GW to 4 GW of renewable energy capacity before next summer.

The ordinance, published in the official gazette on Monday, aims to address regulatory gaps that have hindered rooftop solar deployment on government-owned buildings across the country.

In a statement following the ordinance’s approval, the Cabinet Division said existing legislation lacked clear provisions governing long-term electricity tariffs, rooftop rental payments and maintenance arrangements under Opex and Capex models. Cabinet Secretary Nasimul Gani said the ordinance addresses these issues.

The new rules cover solar power systems with capacities of up to 5 MW at government, semi-government, autonomous and local government institutions, state-owned companies and residential buildings.

Eligible installations include rooftop solar, solar-powered irrigation pumps, solar cold storage facilities, electric vehicle charging stations, floating solar and agrivoltaic systems. The ordinance also covers installations on tea garden rooftops, adjacent vacant land, courtyards and other suitable sites.

“A tripartite agreement shall be executed among the consumer, the service provider, and the appropriate authority for the purpose of installing and operating a special solar electricity system under this ordinance,” the ordinance states.

To accelerate project implementation, the ordinance also exempts relevant procurement processes from mandatory use of the Electronic Government Procurement (e-GP) system.

Private-sector investors have welcomed the ordinance, saying it could stimulate rooftop solar investment, although they have called for further measures to address remaining barriers.

Mostafa Al Mahmud, president of the Bangladesh Sustainable and Renewable Energy Association (BSREA), said the ordinance demonstrates the government’s growing commitment to renewable energy, particularly rooftop solar. “The ordinance will definitely bring some success in power generation,” he said. “However, there are some bottlenecks in it. If those could be removed, perhaps a better output could have been achieved.”

Imran Chowdhury, a director of BSREA, described the ordinance as a timely measure to accelerate distributed solar deployment by making rooftops, unused land and other suitable spaces available for private-sector investment. He said the introduction of Capex and Opex models, alongside simplified procurement procedures, could mobilize investment and shorten project development timelines.

The provision allowing limited tendering for Capex projects valued at up to BDT 50 million ($404.8 million) could also speed up procurement, he added.

However, Chowdhury said greater clarity on bidder eligibility, technical qualifications and participation procedures would be essential to ensure transparent and competitive private-sector participation. “While the ordinance creates promising opportunities for local solar developers, EPC contractors and investors, smaller project sizes may offer limited commercial attraction for foreign investors unless projects can be aggregated into larger, bankable portfolios,” he said.