Dhaka: The investors of big solar power projects have voiced concern that the government’s decision to lower tariff for big solar power projects will impede the growth in the sector.

The Power Division has recently set the tariff range of 14-16 US cent per unit (per kilowatt per hour) in October last for big solar power projects that fall under the category of independent power producer (IPP), a bit lower than the range of 18-19 US cent per unit as proposed by the investors.

The investors now fear that this tariff structure may not be helpful for the smooth growth of a business which just remains in the start-up stage.

Siddique Zobair, member of the Bangladesh Solar and Renewable Energy Development Authority (Sreda) and joint secretary of the Power Division, said the tariff range of 14-16 US cents per unit was set considering the declining cost of the solar power investment.

Many aspects of the investment cost were taken into consideration while fixing the minimum and maximum tariff, he said.

‘Some 14 US cents will be for those projects where the cost of ‘power evacuation’ and land development is be lowest and the reverse for the highest cost projects,’ Zobair added.

He said software has been developed to fix the tariff on the basis of the costs of projects. ‘So, tariff will automatically be set considering the overall project costs.’  

However, the private investors expressed their discomfort with the Power Division’s tariff structure saying that it would not help them implement big projects.

‘Actually, aspirant investors are new in solar power sector and many of them are inexperienced about many unseen costs. Considering such issues, we had proposed the tariff to be 18-19 US cent,’ said Dipal Barua, president of Bangladesh Solar and Renewable Energy Association (BSREA).

He said the BSREA-proposed tariff of 18-19 US cent could be applicable for first generation projects until the total solar power generation reaches 500 MW.

He also pointed out that if the investors at the early stage of business fail to get good return due to a conservative government policy, the next phase investors will feel shy and the sector will finally face the dearth of investment because of its non-lucrative outlook.  

The government has recently declared a plan to generate 3,168 MW of renewable energy by 2021 where the portion of solar power will be 1,700 MW. Now less than 200 MW of solar-based electricity is produced in the country.

Recently, a 200-MW project has been awarded to a private investor fixing the tariff through negotiations. Negotiations for more large projects are going on, according to sources.