The Chhattisgarh State Electricity Regulatory Commission (CSERC) has proposed a generic levelized tariff of ₹3.40 (~$0.04)/kWh for solar photovoltaic projects between 500 kW and 2 MW and ₹4.95 (~$0.05)/kWh for biogas-based power projects commissioned in the financial year (FY) 2026-27.

The proposed tariffs are higher than the levelized tariffs of ₹3.39 (~$0.038)/kWh for solar projects in FY 2026 and ₹4.88 (~$0.054)/kWh for biogas projects.

The levelized tariffs were determined based on a suo-motu petition filed by the Commission.

The Commission also proposed tariffs of ₹7.68 (~$0.08)/kWh for small hydro projects below 5 MW, ₹7.87 (~$0.08)/kWh for projects between 5 MW and 10 MW, and ₹7.47 (~$0.08)/kWh for projects between 10 MW and 25 MW.

A levelized tariff of ₹8.18 (~$0.09)/kWh has been proposed for mini/micro hydro projects of up to 2 MW, and ₹4.55 (~$0.05)/kWh for non-fossil-fuel-based cogeneration projects.

The Commission also proposed energy charges of ₹5.10 (~$0.05)/kWh for non-fossil fuel-based cogeneration projects and ₹6.21 (~$0.06)/kWh for biogas power projects.

Stakeholders can submit their objections and feedback by June 5, 2026.

To compute the generic tariff for solar PV and biogas-based power projects, the useful project life has been set at 25 years for both technologies. For small hydro projects, the useful life has been set at 40 years, while for non-fossil fuel-based cogeneration projects, it has been set at 25 years.

The levelized tariff will apply throughout the project’s useful life.

The generic tariff structure for renewable energy projects will be based on return on equity, interest on loan capital, depreciation, interest on working capital, and operation and maintenance expenses.

For biogas- and non-fossil-fuel-based cogeneration projects, the tariff will include a fixed-cost component and a fuel-cost component.

Capital Cost

To determine the tariff, the Commission has assumed a capital cost of ₹35 million (~$365,692)/MW for solar projects and ₹135.4 million (~$1.41 million)/MW for biogas projects in FY 2026-27.

The capital cost for small hydro projects up to 5 MW has been set at ₹89 million (~$929,903)/MW, while for projects above 5 MW and up to 25 MW, it has been set at ₹102.7 million (~$1.07 million)/MW.

For non-fossil-fuel-based cogeneration projects, the capital cost has been assumed to be ₹56.2 million (~$587,197)/MW.

Operation and Maintenance Expenses

The Commission has considered operation and maintenance (O&M) expenses of ₹0.98 million (~$10,239)/MW for solar projects and ₹8 million (~$83,587)/MW for biogas projects to determine the generic levelized tariffs.

For small hydro projects up to 5 MW, O&M expenses of ₹4.39 million (~$45,868)/MW have been assumed. For projects between 5 MW and 10 MW, O&M expenses have been estimated at ₹3.73 million (~$38,972)/MW. For hydro projects between 10 MW and 25 MW, O&M expenses have been considered at ₹3.18 million (~$33,226)/MW.

The O&M expenses for non-fossil-fuel-based cogeneration projects have been assumed to be ₹3.20 million (~$33,435)/MW.

Debt-Equity Ratio

The Commission has adopted a debt-to-equity ratio of 70:30 for tariff determination. The average State Bank of India one-year marginal cost of funds-based lending rate was considered at 8.72%. Based on this, the interest on loan capital has been computed at 10.72% for FY 2026-27.

Depreciation will be 4.67% per annum for the first 15 years, with the remaining depreciation spread over the project’s remaining useful life.

The return on equity is 14% for renewable energy projects other than small hydro and 15% for small hydro projects. For the remaining tariff period, the return on equity will be grossed up by the latest available corporate tax rate.

The interest rate on working capital has been assumed to be 11.97% for all renewable energy sources.

The capacity utilization factor has been set at 21% for solar projects and 30% for small hydro projects. A plant load factor of 90% has been assumed for biogas projects, and 38% for non-fossil-fuel-based cogeneration projects.

Auxiliary consumption has been set at 0.25% for solar projects and 12% for biogas projects. The Commission has also considered auxiliary power consumption of 1% for small hydro projects and 8.5% for non-fossil fuel-based cogeneration projects.

The station heat rate for non-fossil-fuel-based cogeneration projects has been set at 3,600 Kcal/kWh, while the calorific value of bagasse has been assumed to be 2,250 Kcal/kg.

For cogeneration projects, the bagasse price has been set at ₹2,914 (~$30.45)/MT. For biogas projects, the feedstock price will be ₹1,822 (~$19.04)/MT, with specific fuel consumption of 3 kg of substrate mix/kWh.

The Commission has considered a discount factor of 9.38% for small hydro projects and 9.08% for solar, cogeneration, and biogas projects.

Last month, the Commission notified the Framework for Resource Adequacy Regulations, 2026, establishing a comprehensive planning mechanism to integrate renewable energy and battery storage to ensure a reliable electricity supply.