The Bihar Electricity Regulatory Commission (BERC) has issued a Suo-Motu order on March 2, 2026, determining the generic levellised tariffs for renewable energy projects in the state for the financial year 2025–26. The decision establishes the tariff framework under the provisions of the Electricity Act, 2003, and the Renewable Energy Tariff Regulations 2025. The tariffs mark the first year of a three-year control period that will run from FY 2025-26 to FY 2027-28.
According to the order, the tariffs will apply retrospectively from April 1, 2025, and will remain valid throughout the useful life of the respective renewable energy projects. For most renewable technologies, the useful life has been set at 25 years. However, the Commission has specified longer durations for certain technologies. Small hydro projects will have a useful life of 40 years, while municipal solid waste-based projects will have a useful life of 20 years.
Before finalizing the tariff framework, the Commission conducted stakeholder consultations and public hearings. Several important organizations participated in the discussions, including the Bihar State Power Holding Company Limited, the Bihar Renewable Energy Development Agency (BREDA), and the Bihar Sugar Mills Association. Based on the feedback received during these consultations, the Commission made certain revisions to the draft proposals.
One of the key changes relates to Accelerated Depreciation benefits. Renewable energy generators seeking tariff benefits linked to Accelerated Depreciation must now submit a certified statement confirming that they have not claimed and will not claim Accelerated Depreciation under the Income-tax Act. This requirement is intended to ensure transparency and prevent double financial benefits.
The Commission also revised the interest rate applicable to Interest on Working Capital. Instead of the earlier proposal of 350 basis points above the State Bank of India’s Marginal Cost of Funds Based Lending Rate (MCLR), the final rate has been set at 325 basis points above the average SBI MCLR. Additionally, the reference period for calculating the SBI MCLR has been aligned to October 2024 to March 2025 so that it better reflects financial conditions at the start of the tariff year.
BERC has determined generic tariffs for several renewable technologies operating in the state. Biomass gasifier power projects will receive a tariff of ₹9.63 per kWh, while non-fossil fuel cogeneration projects based on bagasse will receive ₹7.95 per kWh. Municipal solid waste projects based on the Rankine cycle have been assigned a tariff of ₹6.98 per kWh, and refuse-derived fuel projects using the Rankine cycle will receive ₹9.51 per kWh. Biomass power projects using air-cooled AFBC boiler technology will have a tariff of ₹10.08 per kWh.
The levellised tariff calculations are based on key financial parameters determined by the Commission. The discount factor has been set at 9.11 percent using a normative debt-equity ratio of 70:30. The interest on loan has been fixed at 10.99 percent per annum, while the return on equity has been set at a normative 14 percent, grossed up by applicable taxes.
Through this order, the Commission aims to provide regulatory clarity and encourage the development of renewable energy projects within the state. The framework is expected to support the utilization of Bihar’s local renewable resources and help distribution utilities meet their Renewable Purchase Obligation requirements.
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