Financial Viability of Solar Energy for Household in Dhaha City

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Table of Contents
1.1 Introduction2

1.2 Objective of the Study4

1.3 Findings5

1.4 Recommendations6

2.1 Scope of the work8

2.2 Study Findings8

2.2.1 Government’s Power Distribution Plan8

2.2.2 Initial costing and Process to get traditional electricity connection – 2 KW9

2.2.3 Schedule of Electricity Pricing and monthly cost for 2 KW load in residential10

2.2.4 Government’s Renewable Energy Policy10

3.1 Renewable Energy Potential in Bangladesh11

3.2. Achievement in Renewable Energy Development in Bangladesh11

3.3 Recent Initiatives in Renewable Energy12

3.4 500MW Solar Power Program12

3.5 Possible Strategy for Reducing Urban Power Crisis of Bangladesh13

3.6 How Solar Home System works14

3.7 Initial costing and system components of 240 Wp Solar Power System@ 4hrs back up.15

3.8 Cost benefit analysis of Solar Home System as a replacement of alternative energy usage during loadshedding16

3.9 Discounted Cash flow analysis of a typical SHS in Bangladesh17

3.10 Findings17

3.11 Conclusion18

3.12 References19

3.13 Appendix 1 - Questionnaire for service provider20

3.14 Appendix 2 - Questionnaire for household22

1.1 Introduction

Energy is a basic need of human society and has rightly been termed by many as the “life-blood” which keeps human civilization progressing. Without adequate access to modern energy, poor countries can be trapped in a vicious circle of poverty, social instability and underdevelopment (World Energy Council 1999). One such energy starved country is Bangladesh. In 2003, Bangladesh’s energy consumption per capita was only 157 kilograms of oil equivalent (Kgoe) which is one-tenth of the world’s energy consumption per capita (Hussain et al. 2007). Bangladesh’s endowment of conventional energy resources is neither adequate nor varied, as a result of which it suffers from an acute energy crisis and crippling power shortages. However, Bangladesh is endowed with relatively abundant renewable energy resources such as solar energy. Bangladesh, with its 160 million people in a land mass of 147,570 sq km, has shown tremendous growth in recent years.  A booming economic growth, rapid urbanization and increased industrialization and development have increased the country's demand for electricity. Presently, 50% of the total population has access to electricity and per capita generation is 252 KW, which is very low compared to other developing countries. In Bangladesh, the serious demand-supply gap of electricity is one of the largest bottlenecks for economic growth.

Though the government is claiming that presently, the generation capacity is nearly 6,700 Mega Watt (MW),according to recent statistics of Bangladesh Power Development Board, on an average 3,950 MW of electricity is being produced against the demand of about 5,050 MW in day pick hour while about 4,500 MW of electricity is being produced against demand of 6,200 MW in evening pick hours. Therefore, the authority has no choice but to have scheduled load-shedding 1,000-1500 of electricity supply during the peak time. The situation becomes worse in summer season. Bangladesh is losing at least 3.5% of Gross Domestic product (GDP) due to the shortage of Power supply.

To achieve commitment to public through election manifesto, in spite of the major deterrents energy crisis and gas supply shortage, government has taken several initiatives to generate 6,000 MW by 2011, 10,000 MW by 2013 and 15,000 MW by 2016. Government is claiming that 2,944 MW of new electricity (as of Jan, 2012) has already been added to the grid within three years’ time. The government has already developed Power system Master Plan 2010. According to the Master Plan the forecasted demand would be 19,000 MW in 2021 and 34,000 MW in 2030. To meet this demand the generation capacity should be 39,000 MW in 2030. The plan suggested going for fuel-mixed option, which should be...
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