The government has issued an ordinance regulating the installation, operation and approval of solar power systems with a capacity of up to 5 megawatts (MW).

The ordinance allows solar installations at public and private institutions, residential buildings, industrial facilities, tea gardens, irrigation pumps, cold storage facilities and electric vehicle charging stations. However, large-scale ground-mounted solar power projects are excluded from its scope.

It also prescribes penalties for obstructing solar power installation or damaging solar facilities.

The president promulgated the Special Solar Power Installation Ordinance, 2026 on October 19, introducing provisions on investment, service provider selection, electricity bill adjustments, public procurement and project implementation.

Under the ordinance, priority will be given to the operating expenditure (OPEX) model, under which service providers will finance, install, operate and maintain solar power systems. Payments will be adjusted against the electricity generated in accordance with contractual terms.

Institutions with their own funds or regular income may opt for the capital expenditure (CAPEX) model, financing the installation themselves and retaining ownership of the systems.

The ordinance also requires the relevant authority to prepare and maintain district-wise lists of eligible service providers.

Customers will select providers through a competitive process from the approved lists.

However, they may also appoint providers outside the lists through open tenders to install solar power systems.

The ordinance requires a tripartite agreement among the customer, service provider and relevant authority for project implementation. The agreement will cover equipment quality, safety, installation and maintenance, electricity distribution, the customer's share of generated power, pricing and payment terms.

It must also include provisions for the safe disposal of expired equipment and e-waste, as well as the return of unusable components.

Special provisions have been introduced for government procurement. Under the CAPEX model, the ceiling for procuring goods and related services through a limited tender has been set at Tk5 crore. The use of electronic government procurement (e-GP) will not be mandatory for procurement under the ordinance. It also includes special provisions on contract approval and duration.

The ordinance allows consumers to use solar-generated electricity to meet their own demand and supply surplus power to the national grid through net metering.

Electricity supplied to the grid will be adjusted against the consumer's bill for the relevant billing period. If any surplus remains after the adjustment, the consumer will be paid according to applicable rules and government-approved tariffs. The government may also introduce incentives to promote net metering.

A National Policy Council, chaired by the prime minister, will be formed to provide policy guidance on solar power development. It will include ministers or state ministers from the ministries of power, energy and mineral resources, finance and law, as well as secretaries of relevant ministries and representatives of government agencies.

The council will review progress towards renewable energy targets, coordination among agencies, net metering, incentives and the implementation of investment models.

The ordinance also provides for technical and coordination committees at the district and upazila levels. The committees will assist and oversee project implementation, resolve disputes, maintain necessary records and provide training to consumers.

Relevant authorities will also be required to maintain data on solar power systems and regularly monitor whether the installations remain operational.

The ordinance prescribes penalties for stealing solar power systems or their components, trading in stolen components, damaging installations, making illegal connections and obstructing installation or maintenance work.

Stealing or trading in stolen components may result in up to three years' imprisonment, a fine of up to Tk50,000, or both.

Damaging a solar power installation may carry a maximum penalty of five years' imprisonment, a fine of up to Tk5 lakh, or both.

Illegal connections and obstructing installation activities may each be punishable by up to three years' imprisonment, a fine of up to Tk5 lakh, or both.

The ordinance has taken immediate effect. The government may issue rules, gazettes, orders and guidelines to facilitate its implementation and provide necessary interpretations.

Why it matters

The ordinance establishes a regulatory framework for expanding solar energy adoption in Bangladesh, supporting the country's renewable energy transition and energy security goals.