Solar Home Systems save 4bn litres of kerosene: WB

The number of Solar Home Systems sold by the state-owned Infrastructure Development Company Limited (Idcol) has dropped to a mere 3,455 from more than 8.61 lakh in 2013 owing to a rapid expansion of the electricity grid line.

Despite the lower demand, the 15-year-solar programme beginning in 2003 has helped lighted more than 4.1 million households, revealed a study by the World Bank.

The programme, owned by the Economic Relations Division (ERD) of the government, helped the country save 4 billion litres of kerosene worth about $908 million. The estimated benefit from the programme is about $1,852 million, according to the study.

The Washington office of the World Bank published the report online last month while the Dhaka office of the global agency unveiled it at a virtual event on Thursday.

The report titled, "Living In The Light: The Bangladesh Solar Home Systems Story" revealed that the Bangladesh Solar Home System (SHS), which has been continuously operating off-grid electrification, is the largest and longest national programme in the world.

Over the 15-year period, more than 4.1 million SHSs were sold and supported using a competitive business model that offered consumers a choice of the quality solar system.

About 14% of the population or more than 20 million people in the country benefited from the programme which enabled one-quarter of the un-electrified rural population in 2003 to obtain electricity services.

The solar home systems were mainly used in rural homes for lighting, mobile phone charging, and powering televisions and radios. They were also used in about 200,000 rural businesses and religious facilities.

The report also said over 4.1 million solar-home systems sold by the programme helped the country produce 163MW of electricity. Over their useful lifetime, the programme would supply about 2GWh of electricity.

The share of rural households gaining access to electricity services through the SHS programme grew steadily and the rate reached 16.2% of rural households by 2016, or 10.5% of total households in Bangladesh.

About 39% of households in the Barishal Division were dependent on solar home systems.

The brighter lighting allowed children to study for longer hours. Boys and girls, with solar lights, studied 10–12 minutes per day longer on average than those without. These few minutes per day sum to an additional 50-60 hours per year of potential study time.

Beyond the households, the programme helped lighted about two lakh of enterprises and social service customers with better quality light, extended hours of operation, and power for small appliances. These included offices, educational institutions, restaurants, retail shops and other enterprises.

By reducing the consumption of liquid fuel, the programme has helped bring down emission of CO2 by 9.6 million tonnes.

The total net benefits from the programme are estimated at $1,852 million, of which households gained $745 million.

The project participating organisations gained $310 million while Idcol gained $379 million and the government's net benefit was $474 million.

The government earned $384 million from taxes and saved $90 million in kerosene subsidy.

The total investment in the programme during 2003–2018 is estimated at $1,095 million to provide electricity services to about 20 million people.

The credit support came from four development partners among which the World Bank provided $416 million.

Other credit financiers were Asian Development Bank, Japan International Cooperation Agency, and Islamic Development Bank, which provided $185.6 million.

Grant funds amounting to $80.9 million were received from several global agencies.

State Minister for Power, Energy and Mineral Resources Nasrul Hamid said in the report that solar home systems technology has been an important instrument in achieving universal access to electricity.

"Bangladesh completed the installation of 5.6 million solar-home systems providing electricity to about 22 million rural people during my tenure. Idcol was responsible for over 4 million of these installations from 2003 to 2018," he added.

Mercy Miyang Tembon, country director of the World Bank, said, the programme supported by the global agency began at a the time when only 27% of rural Bangladesh households had access to the grid electricity.

Over the course of 15 years, $1 billion in financing was mobilised from international and domestic sources for electrification.

Default loan worth $120 million

There were about 1.2 million defaulters from the beneficiaries of the programme. The default amount worth about $120. The average default amount was $110 and defaulters have yet to pay 36.5%, revealed the report.

The report also said loan repayment defaulters are slightly wealthier than non-defaulters. About 65% of defaulters are willing to pay the due instalments.