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					</table>The Bihar Electricity Regulatory Commission (<a href="https://berc.co.in/" target="_blank" rel="noopener">BERC</a>) has approved the generic levelized tariffs for biomass, non-fossil fuel cogeneration, and waste-to-energy projects for the financial year (FY) 2026-27.
The tariff for biomass gasifier projects has been set at ₹9.78 (~$0.101)/kWh after accelerated depreciation (AD), <a href="https://www.mercomindia.com/bihar-announces-generic-renewable-energy-tariffs-for-fy-2026/" target="_blank" rel="noopener">compared</a> to ₹9.49 (~$0.098)/kWh in the previous financial year.
Non-fossil fuel-based cogeneration projects using bagasse have been assigned a tariff of ₹7.97 (~$0.083)/kWh after AD, up from ₹7.77 (~$0.081)/kWh in FY 2025-26. Cogeneration projects using fuels other than bagasse have been allotted a tariff of ₹8.70 (~$0.090)/kWh after AD, compared to ₹8.48 (~$0.088)/kWh in the previous year.
MSW-based projects using Rankine cycle technology have been allotted a tariff of ₹6.58 (~$0.068)/kWh after AD, higher than ₹6.48 (~$0.067)/kWh in the previous financial year.
RDF-based projects have been assigned a tariff of ₹9.48 (~$0.098)/kWh after AD, compared to ₹9.23 (~$0.096)/kWh in FY 2025-26.
For biomass projects based on Rankine cycle technology, the tariff ranges between ₹9.89 (~$0.103)/kWh and ₹10.46 (~$0.108)/kWh after AD, depending on the fuel type, boiler technology, and cooling configuration. In the previous financial year, the tariff ranged between ₹9.61 (~$0.100)/kWh and ₹10.18 (~$0.106)/kWh, depending on the configuration.
The tariffs will apply retrospectively from April 1, 2026, to projects commissioned up to March 31, 2027. Projects commissioned after that date will continue to be governed by these tariffs until the Commission issues a fresh tariff order.
The tariffs will remain applicable for the full tariff period specified under the 2025 Renewable Energy Tariff Regulations. The tariff period is 25 years for biomass, biomass gasifier, and non-fossil fuel cogeneration projects, and 20 years for municipal solid waste and RDF projects.
Background
BERC initiated the tariff determination proceedings suo motu under the BERC Terms and Conditions for Tariff Determination from Renewable Energy Sources Regulations, 2025. It published a consultative paper and invited comments, objections, and suggestions from distribution companies, stakeholders, and the public.
Comments and suggestions were submitted by North Bihar Power Distribution Company, South Bihar Power Distribution Company, the Bihar Renewable Energy Development Agency, and the Bihar Sugar Mills Association.
The distribution companies argued that biomass and RDF fuel prices were volatile and requested a fuel-cost pass-through or adjustment mechanism to reduce their exposure to fuel price fluctuations. They also sought reconsideration of normative capital costs, revisions to the fuel-stock assumptions used to calculate working capital, and clarity on the treatment of accelerated depreciation benefits.
The utilities argued that the capital-cost benchmarks for certain technologies, particularly municipal solid waste projects, were high and could increase power purchase costs for the distribution companies. They sought capital-cost benchmarks that reflected competitive procurement, regional cost variations, and technological developments.
They also requested that the normative fuel-stock requirement used to calculate working capital be reduced from 4 months to 2 or 3 months. The distribution companies said a lower fuel-stock assumption would better reflect actual supply-chain conditions and reduce the interest burden included in tariffs.
The Bihar Sugar Mills Association requested that the tariff order be made effective retrospectively from April 1, 2026, rather than from the date of its issuance. It argued that applying the tariff only from the order date could result in financial losses and regulatory uncertainty for bagasse-based cogeneration projects during FY 2026-27.
BREDA sought clarification that normative capital costs included land, plant and machinery, civil works, erection and commissioning, financing costs, interest during construction, and evacuation infrastructure up to the interconnection point. It also sought clarification on the expenses covered under operation and maintenance costs.
Commission’s Analysis
The Commission rejected several proposals submitted by the distribution companies, observing that they related to the framing or amendment of the 2025 Renewable Energy Tariff Regulations and were therefore beyond the scope of the annual generic levelized tariff proceeding.
BERC declined to introduce a fuel-cost pass-through mechanism, revise normative capital costs, alter working-capital norms, or modify the treatment of accelerated depreciation in the present proceedings. The Commission said the annual tariff exercise was intended to apply the normative parameters prescribed under the regulations.
The Commission accepted the Bihar Sugar Mills Association’s request regarding the effective date and made the tariffs applicable retrospectively from April 1, 2026. It also clarified that the tariffs would continue to apply to projects commissioned after March 31, 2027, until the next generic tariff order is issued.
BERC also accepted BREDA’s clarifications regarding the components included in normative capital costs and operation and maintenance expenses, holding that they were consistent with the provisions of the 2025 regulations.
For tariff calculations, the Commission adopted a debt-to-equity ratio of 70:30; a return on equity of 16.96% for the first 20 years and 21.01% thereafter; an interest rate on loans of 10.716%; an interest rate on working capital of 11.966%; and a discount factor of approximately 9.197%.
BERC retained technology-specific normative capital costs of ₹63.8 million (~$661,620)/MW to ₹74.4 million (~$771,544)/MW for biomass Rankine cycle projects, depending on the fuel and cooling configuration. It retained the capital cost at ₹56.2 million (~$582,806)/MW for non-fossil fuel cogeneration projects and ₹67.7 million (~$702,064)/MW for biomass gasifier projects.
The normative capital cost was set at ₹150 million (~$1.56 million)/MW for municipal solid waste projects and ₹90 million (~$933,319)/MW for RDF projects.
The Commission adopted biomass fuel at ₹4,627.03 (~$47.98)/MT, bagasse at ₹2,957.96 (~$30.67)/MT, and RDF at ₹2,710.90 (~$28.11)/MT. An annual escalation rate of 3.45% will apply to fuel prices. No fuel cost has been considered for municipal solid waste projects.
Accordingly, the Commission finalized the generic levelized tariffs for eligible biomass, non-fossil fuel cogeneration, municipal solid waste, and RDF projects for FY 2026-27.
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