CSERC Sets 2025-26 Levelized Tariffs For Small Hydro, Solar, Biogas, And Co-Generation Projects In Chhattisgarh

The Chhattisgarh State Electricity Regulatory Commission (CSERC) has issued a suo-motu order to determine the generic levelized generation tariffs for various renewable energy technologies for the financial year 2025-26. This new order will apply to projects that achieve their commercial operation date (COD) within the first year of the 2025 control period. The technologies covered under this order include small hydro projects, non-fossil fuel-based co-generation plants, biogas-based power projects, and solar photovoltaic (PV) projects ranging from 0.5 MW to 2 MW.

The Commission has specified the “useful life” for these projects to define the tariff period. Small hydro projects have a useful life of 40 years, while solar PV, biogas, and co-generation plants have a useful life of 25 years. Most of the technologies have been assigned a single-part tariff structure, but projects with fuel costs, such as biogas and co-generation plants, will have tariffs comprising both fixed and variable components.

Key financial parameters have also been outlined for these determinations. A debt-equity ratio of 70:30 has been applied across projects. The interest rate on loans for FY 2025-26 is set at 10.99%, calculated using the State Bank of India’s Marginal Cost of Funds-based Lending Rate (MCLR) plus 200 basis points. Depreciation is allowed up to 90% of the capital cost, with a rate of 4.67% per annum for the first 15 years. The return on equity has been set at 15% for small hydro projects and 14% for other renewable technologies, grossed up by the prevailing Minimum Alternate Tax (MAT) rate of 17.472%.

Capital costs differ by technology. Small hydro projects up to 5 MW have a normative capital cost of ₹890 lakh per MW, while projects between 5 MW and 25 MW are set at ₹1,027 lakh per MW. Solar PV projects are estimated at ₹3.5 crore per MW, and biogas-based projects have the highest capital cost at ₹1,354 lakh per MW. Operation and Maintenance (O&M) expenses have been defined and will escalate at a rate of 5.25% annually. For FY 2025-26, these range from ₹9.26 lakh per MW for solar PV to ₹76.04 lakh per MW for biogas projects. Performance norms, including Capacity Utilisation Factor (CUF) and Plant Load Factor (PLF), are set at 30% for small hydro, 21% for solar PV, and 90% for biogas projects.

The final levellised tariffs for FY 2025-26 have been determined as follows: small hydro projects will receive between ₹7.42/kWh and ₹8.07/kWh depending on size; solar PV projects from 0.5 MW to 2 MW will have a tariff of ₹3.39/kWh; non-fossil fuel-based co-generation plants will have a fixed cost of ₹4.50/kWh and a variable cost of ₹4.93/kWh; and biogas-based projects will have fixed charges of ₹4.88/kWh and energy charges of ₹6.00/kWh.

CSERC has invited stakeholders to submit comments or suggestions on these proposals by January 20, 2026. A formal hearing on the matter is scheduled for January 22, 2026. This order is expected to provide clear guidelines and financial certainty for renewable energy developers in Chhattisgarh, supporting the state’s efforts to expand clean energy capacity.