The Chhattisgarh State Electricity Regulatory Commission (CSERC) has released its proposal for generic levelized tariffs applicable to renewable energy projects scheduled to achieve commercial operation during FY 2025–26. The proposed tariffs cover a range of renewable technologies, including solar, small hydro, non-fossil-fuel-based cogeneration, and biogas-based power projects.
Under the draft proposal, solar power projects with capacities between 500 kW and 2 MW have been assigned a levelized tariff of ₹3.39 per kWh, reflecting a reduction compared to the tariff applicable in FY 2024–25. The revision is primarily attributed to a lower normative capital cost assumption for small-scale solar projects.
For small hydro power projects, CSERC has proposed differentiated tariffs based on project capacity. Projects below 5 MW have been assigned a tariff of ₹7.57 per kWh, while projects in the 5 MW to 10 MW range have been proposed a tariff of ₹7.80 per kWh. Projects with capacities between 10 MW and 25 MW are proposed to receive ₹7.42 per kWh. Mini and micro hydro projects up to 2 MW have been assigned the highest tariff in the category at ₹8.07 per kWh. These tariffs represent an increase compared to those applicable in the previous financial year.
For non-fossil-fuel-based cogeneration projects, the Commission has proposed a fixed cost component of ₹4.50 per kWh and a variable cost component of ₹4.93 per kWh for FY 2025–26, both reflecting marginal increases over FY 2024–25 levels.
In the case of biogas-based power projects, CSERC has proposed fixed charges of ₹4.88 per kWh, excluding subsidy, along with energy charges of ₹6.00 per kWh. While fixed charges have increased, energy charges have been revised downward compared to the previous year.
The proposed tariffs will apply exclusively to renewable energy projects that achieve commercial operation during FY 2025–26. The tariff period will correspond to the useful life of each project, commencing from the date of commercial operation. The Commission has considered a useful life of 40 years for small hydro projects and 25 years for solar, cogeneration, and biogas-based projects, with tariffs determined on a levelized basis across the full project life.
Capital Cost and Financial Assumptions
CSERC has adopted normative capital cost assumptions in line with the Renewable Energy Tariff Regulations, 2025. Capital costs have been set at ₹89.0 million per MW for small hydro projects up to 5 MW and ₹102.7 million per MW for projects between 5 MW and 25 MW. Solar projects in the 0.5–2 MW category have been assigned a capital cost of ₹35 million per MW, reduced from FY 2024–25 levels. Non-fossil-fuel-based cogeneration projects have been assigned ₹56.2 million per MW, while biogas-based projects carry the highest capital cost at ₹135.4 million per MW.
For tariff computation, the Commission has assumed a 70:30 debt-to-equity ratio, with a loan tenure of 15 years. The interest rate on loans has been fixed at 10.99%, derived as 200 basis points above the average one-year SBI MCLR. Return on equity has been set at 15% for small hydro projects and 14% for other renewable technologies, grossed up for applicable minimum alternate tax during the first 20 years.
Operating and Technical Parameters
Operation and maintenance expenses have been specified separately for each technology and will be escalated annually at 5.25%. The capacity utilisation factor has been set at 30% for small hydro and 21% for solar projects, while plant load factors have been fixed at 38% for cogeneration and 90% for biogas-based projects. Auxiliary power consumption norms range from 0.25% for solar projects to 12% for biogas-based projects.
Tariff levelization has been carried out using the post-tax weighted average cost of capital as the discount factor, set at 9.51% for small hydro and 9.21% for solar, cogeneration, and biogas-based projects, ensuring uniform tariff recovery over the project life.
CSERC has invited stakeholder comments and suggestions on the proposed tariffs, with submissions due by January 20, 2026.
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