The Chhattisgarh State Electricity Regulatory Commission (CSERC) has proposed generic levelized tariffs for renewable energy projects to be commissioned during the financial year (FY) 2025–26.

Under the proposal, solar projects with capacities of 500 kW to 2 MW have been assigned a levelized tariff of ₹3.39 (~$0.038)/kWh, down from ₹4.34 (~$0.048)/kWh in FY25.

Small hydro projects below 5 MW will have a proposed tariff of ₹7.57 (~$0.084)/kWh, up from ₹7.05 (~$0.078)/kWh in FY25. Projects between 5 MW and 10 MW will receive a tariff of ₹7.80 (~$0.087)/kWh, up from ₹6.33 (~$0.070)/kWh last year.

Small hydro projects in the 10 MW to 25 MW range have been proposed a tariff of ₹7.42 (~$0.082)/kWh, up from ₹5.97 (~$0.066)/kWh in FY25.

Mini and micro hydro projects up to 2 MW will have the highest tariff at ₹8.07 (~$0.090)/kWh, up from ₹7.55 (~$0.084)/kWh last year.

For non-fossil-fuel-based cogeneration projects, the Commission has proposed a fixed cost component of ₹4.50 (~$0.050)/kWh, increasing from ₹3.89 (~$0.043)/kWh in FY25, and a variable cost component of ₹4.93 (~$0.055)/kWh for FY26, slightly higher than ₹4.83 (~$0.054)/kWh last year.

Biogas-based power projects have been proposed with fixed charges of ₹4.88 (~$0.054)/kWh, up from ₹4.27 (~$0.047)/kWh in FY25 (without subsidy), and energy charges of ₹6.00 (~$0.067)/kWh, down from ₹7.52 (~$0.084)/kWh last year.

The Commission has invited stakeholders to submit comments and suggestions on the proposed tariffs by January 20, 2026.

The tariffs will apply only to renewable energy projects that achieve commercial operation during FY26. The tariff period will equal the project’s useful life and commence on the date of commercial operation.

The useful life has been considered as 40 years for small hydro projects and 25 years for solar, cogeneration, and biogas-based projects. Tariffs have been determined on a levelized basis across the entire useful life of each project.

Capital Cost Assumptions

The Commission has adopted normative capital cost assumptions as specified in the Renewable Energy Tariff Regulations 2025.

For small hydro projects, capital costs have been set at ₹89.0 million (~$988,000)/MW for projects up to 5 MW and ₹102.7 million (~$1.14 million)/MW for projects between 5 MW and 25 MW. Non-fossil-fuel-based cogeneration projects have been assigned a capital cost of ₹56.2 million (~$624,000)/MW.

Solar projects in the 0.5–2 MW range have been assigned a capital cost of ₹35 million (~$388,000)/MW, lower than ₹45 million (~$500,000)/MW in FY 2024–25, which contributed to the reduction in the proposed solar tariff. Biogas-based power projects have been assigned the highest capital cost at ₹135.4 million (~$1.50 million)/MW.

Financing Structure and Return Parameters

For tariff computation, the Commission has assumed a normative debt-to-equity ratio of 70:30. The loan tenure has been set at 15 years.

The interest rate on the loan has been fixed at 10.99%, calculated as 200 basis points above the average one-year SBI Marginal Cost of Funds Based Lending Rate over the preceding six months, which was 10.62% in FY 2024–25.

Return on equity has been set at 15% for small hydro projects and 14% for other renewable technologies. The return has been grossed up by the applicable minimum alternate tax rate for the first 20 years.

Operating Parameters

Operation and maintenance expenses for the first year of the control period have been specified separately for each technology and escalated annually at 5.25 %, up from 3.84% in FY 2024–25.

The capacity utilisation factor (CUF) for small hydro projects has been set at 30%, while for solar projects it is 21%. Plant load factors have been set at 38% for cogeneration projects and 90% for biogas-based projects.

Auxiliary power consumption norms range from 0.25% for solar projects to 12% for biogas-based power projects.

Fuel-related parameters, including station heat rate, calorific value, fuel price, and escalation, have been specified for cogeneration and biogas projects in accordance with the regulations.

Tariff Levelization

Tariff levelization has been carried out using the post-tax weighted average cost of capital as the discount factor. The discount rate has been set at 9.51% for small hydro projects and 9.21% for solar, cogeneration, and biogas-based projects.

This discount rate has been applied to spread tariff recovery evenly across the entire useful life of each project.

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