Bangladesh’s readymade garment (RMG) factories could lower monthly energy costs by 15.7% if solar power covered 30% of their electricity demand, according to a new study by the Centre for Policy Dialogue (CPD) presented Sunday at a dialogue on industrial decarbonisation at BRAC Centre Inn in Dhaka.
The research, based on data gathered from 350 RMG factories and an analysis of 65 machine types across eight production categories — including cutting, sewing, embroidery, finishing, printing, washing and dyeing, and packing — found that even a 10% solar offset could cut average monthly energy costs by 5.5%. Under CPD’s modelling, a 30% solar share would reduce a factory’s average monthly energy bill from Tk998,190 to Tk846,435.
A Monte Carlo simulation covering 1,000 possible scenarios per factory also found that renewable energy adoption reduced monthly energy-cost volatility at 96% of factories studied.
CPD Research Director Khondaker Golam Moazzem said Bangladesh’s gas crisis was likely to deepen, adding pressure on the RMG sector and the broader economy, and that continued reliance on imported liquefied natural gas (LNG) would not be sustainable long-term. He said the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) was already encouraging members to explore renewable options, but that manufacturers need clearer guidance on financing and technology choices.
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Beyond solar, the study found machinery upgrades offer uneven savings potential. Cutting equipment accounts for just 5.5% of installed machine capacity but could deliver 27% of total savings from substitution — a band-knife cutting machine, for instance, was found to be roughly 300 times more energy-intensive per unit of output than a laser cutter. Sewing machinery, by contrast, makes up 85.2% of installed capacity but offers less than 3% of potential savings, since much of the equipment is difficult to replace.
Optimising or replacing machinery across the 350 factories surveyed could cut average factory-level energy use by roughly 10.2%, though the study estimated the realistic annual saving — after accounting for actual capacity utilisation — at around 25,330 megawatt-hours. Full machinery replacement would require an estimated Tk13,209 crore in investment, versus Tk6,604 crore for 50% adoption.
Smaller factories showed the widest efficiency gaps, with an estimated energy-saving shortfall of 57.3% against the efficiency frontier, compared with 8.9% for the largest factories — a disparity CPD attributed to older machinery and tighter financing access. The think tank recommended expanding blended finance and concessional lending to close this gap.
CPD noted that washing and dyeing remain the most energy-intensive stage of production and require urgent attention, since solar power cannot substitute for the gas-based thermal energy many of these processes still require.
Industry representatives at the dialogue pressed for faster government action. BGMEA Vice President Vidiya Amrit Khan said incoming EU and UK decarbonisation directives leave manufacturers little time to adapt, and called for renewable-energy investments to be exempt from tax and VAT. Bangladesh Sustainable and Renewable Energy Association President Mostafa Al Mahmud cited more than 50% VAT still applied to solar technologies as a major bottleneck, while Bangladesh Knitwear Manufacturers and Exporters Association Executive President Fazlee Shamim Ehsan said Bangladesh risks falling behind competitors on renewable adoption despite available climate funds.
DBL Group Chief Sustainability Officer Mohammed Zahidullah said solar would be central to the sector’s decarbonisation push and warned Bangladesh could lose export orders to India, Pakistan and Vietnam if it does not accelerate its transition.
Moazzem proposed forming a joint committee involving BGMEA, BKMEA, BSREA, Petrobangla and other stakeholders to coordinate solutions to the energy crisis and remove regulatory barriers to renewable adoption.