solar home system (shs) · 9/6/2017 · solar home system (shs): bangladesh success case june 5,...
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Presented by:
Prof. Syed Munir Khasru
Chairman The Institute for Policy, Advocacy, and Governance (IPAG)
Solar Home System (SHS): Bangladesh Success Case
June 5, 2017
Asia Solar Energy Forum 2017
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SHS Structure
IDCOL
Government &
Development
Partners
NGO/Partner
Organizations (PO) Households
Sells PV &
Provide Services Suppliers Supplies
Equipment
Technical Standards
Committee Provides
Loans
PO Selection
Committee
World Bank
ADB
GEF
GIZ
KfW
IDB
GPOBA
JICA
USAID
DFID
Multilateral Donors
Monitors
Provides
Loans
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Key Features & Success Factors
Multi-Layered Monitoring & Quality Control:
- Training & Inspections by IDCOL
- Technical Standards Committee (TSC) monitors suppliers’
components.
Competition leading to better quality at lower costs:
56 Partner Organizations (PO) provide services across the country providing consumers freedom of choice.
Quality
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Phased-out Subsidy:
Subsidies gradually phased down to almost zero making the system financially viable for all investors.
Micro-Credit Scheme:
- Leveraging micro-credit lending to increase affordability for poorest segments.
- 88% customers pay off on time.
Finance
0
20
40
60
80
100
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Subsidy Per PV ($)
Key Features & Success Factors
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Focus on Poorer Off-Grid areas: - 60% customers buy the smallest panel (covers 3 LED lights
and 1 mobile phone charger).
- Targeting the segment lacking access to any electricity. - As grid electricity is already subsidized, this prevents dual
subsidization.
Strategic
Key Features & Success Factors
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Support for Domestic Industries: - Semi-concessional credit facilities by IDCOL to local
workshops encourages new domestic manufacturers. - Promotion of domestically sourced SHS equipment.
- All batteries locally made.
- 25% Panels made locally. Rest 75% sourced from China.
Strategic
Key Features & Success Factors
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Service at a Personal Level:
- Communication at a root level with customers on the financial benefits of SHS has helped convince them.
- Typically, 6 loan officers operate in a six-km radius.
Convenient Modelling:
- Panels are detachable and can be brought indoors during natural disasters in cyclone-prone areas.
- Disaster Management Fund acts as insurance for customers
affected by cyclones.
Marketing & Convenience
Key Features & Success Factors
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Financing Structure
2003
50% Down Payment
Rest Paid in 6 months
2016
15% Down Payment
Rest Paid in 5-7 years
• Economies of Scale • Falling Subsidies of grid electricity • Falling Prices of Solar
Interest Rates (Concessionary)
6-9% 12% 8%
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Challenges
Entrance of unregulated poor quality SHS providers at low prices.
Market Maturity as Bangladesh Government is aggressively expanding
on-grid connections.
100% penetration difficult to achieve as the ultra-poor unable to
afford even the cheapest options.
Lack of a roadmap & coordination resulting in lack of timeline of
grid connections, creating uncertainty for SHS providers.
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Expanding services to grid connected areas to tackle load-shedding in peak seasons.
Expand International Collaboration to share success:
- IDCOL conducts capacity building & experience sharing in 11 countries in Asia & Africa.
Market Scope: Target of 6mn SHS by 2021, generating 220 MW.
Investment and Capacity Building Support for local manufacturing & assembling facilities for
Solar PV, bringing down costs.
Increased focus on solar and wind to support power generation roadmap cost-effectively.
- BD will have 90% dependence on imported energy by 2030 at high costs.
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Takeaways
Bangladesh’s growth in Renewable Energy will be driven by the solar power, forming more than 50% of the total composite.
Decentralized Renewable Energy (DRE) are quicker and cost-effective means to provide power in remote parts.
SHS has lifted thousands of families out of poverty by targeting only the rural population lacking grid connectivity.
Micro-credit financing and Mobile Money adoption has been at the heart of SHS success.
SHS can serve as a profitable role model for Asian and African economies that have significant population lacking access to electricity.
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