The FY2026–27 budget was widely reported as the end of import duty on solar equipment. The Statutory Regulatory Orders (SROs) that followed are narrower than the headlines — and who imports and owns your system now decides whether you see the saving.
What the budget granted
| Measure | Position | Stated validity |
|---|---|---|
| Import, regulatory and supplementary duty and advance tax on key solar equipment | Zero | 30 June 2031 |
| Income tax on solar power generation | Fully exempt | 2035 |
| Tax rebate for users of solar electricity | 5% | Per budget provision |
| Customs duty on lithium-ion batteries | 25% → 5% | See 2028 note |
| Supplementary duty on energy storage systems | Removed (was 20%) | See 2028 note |
| Relief on mounting structures, lithium cells, battery packs and BESS | Granted | Proposed to end 30 June 2028 |
That is a real change. Before it, taxes on panels, inverters, lithium battery packs, battery housings and mounting structures reportedly added about 58.6% in combined incidence — around 27% on panels, 29% on inverters and close to 89% on PV-DG controllers. And a five-year window gives investors and lenders something to plan against.
The catch: who actually qualifies
After reading the SROs, the Bangladesh Sustainable and Renewable Energy Association (BSREA) said the relief applies in practice mainly to solar generation companies and providers — not to the whole sector. On that reading, households, farmers, small commercial users and many solar businesses fall outside it. BSREA is lobbying for importers, EPC contractors and distributors to get the same treatment, arguing that this could take Bangladesh to 6,000–8,000 MWp of solar by 2030.
The difference matters. Relief tied to the generation side benefits whoever imports and owns the plant; relief tied to the equipment would benefit anyone who buys it. The SROs, as the industry reads them, lean towards the first.
Caveat: SRO interpretation is technical and notifications get amended. Check the SRO that applies to your import with a customs agent before relying on it.
What each party gets
- Factories buying a system outright — equipment should land cheaper, but only if the importing party qualifies and passes the saving on. A quotation from before mid-2026 was priced with duties in it and is likely out of date.
- EPC contractors — the most exposed. A contractor importing equipment for a client-owned system is not itself a generator, so it may sit outside the exemption.
- ESCO, RESCO, OpEx and BOO developers — the clearest winners. The developer owns and operates the plant and sells the power, which puts it on the generation side, where both the duty relief and the income-tax exemption to 2035 apply.
- Importers and traders — appear to be left out. Solar goods are also still assessed on weight rather than invoice value, which inflates the assessed cost whatever the headline rate.
- Factories that need storage — battery and BESS relief is proposed to end on 30 June 2028, three years before the solar relief. Storage projects should plan on that date.
The bigger picture
The measures favour installed megawatts over import volume, and the 2028 sunset on batteries and structures is meant to encourage local manufacturing. But a post-budget dialogue by the Centre for Policy Dialogue found that 98% of the energy-sector allocation went to fossil fuels and 2% to renewables, with eleven renewable projects — including grid modernisation and solar schemes — left unfunded. Tax policy pushes towards distributed solar; spending still funds the conventional system. For the sector as a whole, grid capacity is likely to bind before equipment cost does.
What it means for you: pick the right structure
- Buying through a trader or distributor — most exposed to the gap. Ask in writing under which SRO the equipment is imported and whether the exemption is claimed.
- EPC contract where you own the asset — you keep ownership, depreciation and every unit generated. Settle before signing how the equipment is imported and how any duty saving shows in the price.
- OpEx, ESCO or BOO — the developer imports, owns and operates, so it sits inside the exemption; that lower cost should show up in the tariff. You invest nothing and carry no performance risk, but you don't own the plant.
Whichever route you choose, ask for the price or tariff to be quoted against the current duty structure, and ask plainly whether the exemption is being claimed on your equipment.
What it doesn't change
Cheaper equipment doesn't make a weak roof stronger, remove shading, raise your sanctioned load or shorten utility approvals — and a cheaper project still has to be funded. We offer every business model, from CapEx to OpEx, ESCO, RESCO and BOO, and quote against today's duty position. Ask us for a site survey.
Sources
- FY2026–27 budget reporting and post-budget analysis in The Daily Star, The Business Standard, Prothom Alo, The Financial Express, Dhaka Tribune, Daily Sun and New Age
- BSREA press conferences (April and June 2026)
- BKMEA pre-budget submission to NBR (April 2026)
- Centre for Policy Dialogue post-budget dialogue (June 2026)
Duty rates, validity dates and SRO scope are as reported in mid-2026 and can change through later notifications. This is analysis, not tax advice — confirm the current position with a customs agent or tax adviser before making procurement decisions.