Why home solar scheme did not light up

The hot, humid days and the dark nights were unbearable for Rafiqul Islam, an Oman expatriate from Charfasson upazila of Bhola. He had seen a few solar panels installed in the homes of some well-to-do families around him. In those homes, the fans whirred to provide a soothing breeze and, at night, their families enjoyed TV serials to their content. So he went and installed a solar home system for himself with a capacity of 20 watts on the roof of his house in 2011 at a cost of Tk15,000.

At first everything seemed fine. He enjoyed his fans and lights and serials for a while but within four years, the battery of the system could not hold charge anymore to supply the power to his home circuit. When he wanted to replace the battery – which would have cost around Tk4,000 – he found to his chagrin that the system provider, Upakulio Biddutayan O Mohila Unnayan Samity, had wrapped up and left the area.

"The system lay there for years until we could buy a new battery in June last year when power outages began," said Sajedul Islam Rabby, son of Rafiqul Islam.

Faruk Maji, a fisherman from Dhonia union of the same district, also had to replace the battery of his solar system twice. He had subscribed to the system from Grameen Shakti in 2010.

This is the reality of 53.57 lakh solar home systems that have been distributed by the Infrastructure Development Company Limited (IDCOL), a government-owned non-banking organisation, and the Test Relief Project (TR/KABITA) of the Department of Disaster Management.

IDCOL distributed the solar systems through 56 partner organisations such as Upakulio Biddutayan O Mohila Unnayan Samity and Grameen Shakti. And the money due to it seems to be in jeopardy as IDCOL is yet to recover around Tk850 crore from the partner organisations, said IDCOL officials.

According to stakeholders, Solar Home Systems, once the lone sources of illuminating homes in remote areas, could have been a potential solution to the ongoing load shedding caused by the crisis of primary energy – gas, coal, and oil.

However, many of these systems remain out of service due to the poor quality of batteries, inverters, and solar panels.

Consumers cannot have their systems repaired as the distributors have discontinued their after-sale services, they said.

However, officials involved with the scheme said the inability to recover instalment dues from subscribers, the decline of the solar home system market because of the expansion of grid electricity, and the distribution of free solar systems by other ministries have jeopardised the programmes.

Mohammad Hossain, director general of the Power Cell at the Power Division, said there are around 20 lakh solar home systems now in operation.

"Solar home systems were introduced in the remote areas of the country where there was no grid electricity supply. But due to grid expansion, the number of active solar systems has decreased," he said.

According to IDCOL's Technical Specifications for Solar Home System, batteries should have a minimum lifespan of five years. In case of battery failure or if it does not perform as per the specified standards within the warranty period, the partner organisations should replace the battery.

However, IDCOL authorities informed TBS that the inability of consumers to pay their due instalments made it financially unsustainable for these organisations to continue operating their local offices.

Multiple programmes at the same time

IDCOL started the solar home system programme in January 2003 with credit and grant supports from the World Bank and the Global Environment Facility.

Later, German development agency GIZ and its investment and development bank KfW, Asian Development Bank, Islamic Development Bank, Japan International Cooperation Agency, United States Agency for International Development and other financing partners came forward with additional financial support for the expansion of the programme.

Up to January 2019, IDCOL installed about 41.3 lakh systems in remote areas with the support of 56 partner organisations.

On the other hand, the government started to distribute systems under the TR/KABITA project of the Department of Relief as part of the social safety net programmes.

Since FY2015-16, 12.21 lakh systems under the project have been distributed.

Meanwhile, power distribution companies started to expand the grid electricity supply to remote and isolated areas to meet the government's "100% electrification by 2021" campaign in 2015.

According to a study by the Bangladesh Institute of Development Studies (BIDS), the lack of policy coordination among stakeholders is a key factor contributing to the precarious state of solar power programmes.

Munawar Misbah Moin, managing director of the Rural Service Foundation (RSF), an initiative of Rahimafrooz, which is responsible for installing around 7 lakh solar systems, said that the IDCOL programme faced challenges when the TR/KABITA project started distributing free solar systems.

According to him, the TR/KABITA distributed solar systems without conducting quality checks, monitoring, or providing any training to the partner organisations.

Md Abdullah Al-Mamun, director of the TR/KABITA project, said they implemented the project in accordance with the government's decision.

He mentioned that the programme was discontinued as rural areas were brought under grid coverage through the 100% electrification campaign.

Low-quality equipment

A solar home system package includes solar panels, batteries, inverters and other equipment along with cables. Customers have to bear the cost of every piece of equipment in the package once they subscribe to a system.

Most of the systems, however, have faced trouble mostly due to the poor quality of the battery and inverter.

Md Asaduzzaman, a solar system user from Bhuapur in Tangail, said the outdated equipment of the solar system has left them living in darkness and enduring sweltering heat when the grid supply is cut off.

Munawar Misbah Moin, director of Rahimafrooz and president of the Accumulator Battery Manufacturers and Exporters Association of Bangladesh (ABMEAB), said the current situation is a consequence of the poor-quality batteries supplied by certain organisations that sourced the products from "illegal" markets.

Closure of after-sales services

Most of the customers of units distributed after 2013 did not receive after-sales service from the partner organisations of IDCOL.

These organisations closed down their local service offices once consumers started defaulting on their instalments.

Despite numerous attempts, TBS could not obtain any response from Upakulio Biddutayan O Mohila Unnayan Samity.

Md Abdus Sattar, chief financial officer at Grameen Shakti, said operating the local office was not financially viable due to consumers refusing to pay their instalments.

"There is still an outstanding amount of around Tk300 crore to be recovered from customers," he said.

"However, we have provided after-sales services within the warranty period set by IDCOL to eligible customers," he added.

IDCOL yet to recover Tk850cr

IDCOL provided grants and soft loans as well as necessary technical assistance to the organisations that used to select customers, extend loans, install the systems, and provide after-sale services.

IDCOL's total investment under the programme is around $696 million, including $600 million as loan and $96 million as grant.

Among all of the partner organisations, Grameen Shakti (38.8%) and Rural Services Foundation (14.5%) captured the major portion of customers. Others capture about 25% of customers, according to IDCOL.

Of the total financing, IDCOL is yet to recover around Tk850 crore from the partner organisations, said IDCOL officials.

As a financial institution, the company is following all the rules and regulations of the central bank to recover the dues, they said.