The Chhattisgarh State Electricity Regulatory Commission (CSERC) has proactively  issued an order that establishes generic levelized generation tariffs for renewable  energy projects for the financial year 2025-26. This new directive is applicable to  projects that reach their Commercial Operation Date (COD) within the first year of the  2025 control period. The technologies included in this initiative encompass small hydro  projects, non-fossil fuel-based co-generation plants, biogas power projects, and solar  photovoltaic (PV) projects ranging from 0.5 MW to 2 MW. 

Understanding Useful Life and Tariff Structure 

To determine the tariff period, CSERC has outlined the “useful life” for each type of  project. Small hydro projects are assigned a useful life of 40 years, whereas solar PV,  biogas, and co-generation projects are designated a lifespan of 25 years. Most projects  will operate under a single-part tariff model, with the exception of biogas and co generation plants, which will implement a two-part tariff structure that includes both  fixed and variable charges to better reflect operational realities. 

Financial Parameters Set by the Commission 

The Commission has established essential financial parameters to assist in tariff  calculations. A uniform debt-equity ratio of 70:30 has been applied across the board.  For FY 2025-26, the loan interest rate has been set at 10.99%, calculated based on the  State Bank of India’s Marginal Cost of Funds-based Lending Rate (MCLR) plus an  additional 200 basis points. Depreciation is permitted up to 90% of the project’s capital  cost, with an annual depreciation rate of 4.67% for the first 15 years. Additionally, the  return on equity has been fixed at 15% for small hydro projects and 14% for other 

renewable technologies, adjusted for the current Minimum Alternate Tax (MAT) of  17.472%. 

Capital Costs and Operational Expenses 

Capital costs vary among different technologies. For small hydro projects up to 5 MW,  the normative capital cost is set at ₹890 lakh per MW, while projects ranging from 5 MW  to 25 MW are pegged at ₹1,027 lakh per MW. Solar PV projects are estimated at ₹3.5 crore per MW, and biogas projects incur the highest costs at ₹1,354 lakh per MW.  Annual operation and maintenance (O&M) expenses are defined and are expected to  increase by 5.25% each year, ranging 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 established at 30% for small hydro, 21% for solar  PV, and 90% for biogas. 

Levelized Tariffs for the Financial Year 2025-26 

The finalized levelized tariffs for the financial year 2025-26 are as follows: – Small Hydro Projects: ₹7.42/kWh to ₹8.07/kWh, depending on the size. – Solar PV Projects (0.5–2 MW): ₹3.39/kWh. 

– Non-Fossil Fuel Co-Generation Plants: Fixed cost ₹4.50/kWh, variable cost  ₹4.93/kWh. 

– Biogas-Based Projects: Fixed charges ₹4.88/kWh, energy charges ₹6.00/kWh. Engaging Stakeholders for Feedback 

CSERC has encouraged stakeholders to share their comments or suggestions regarding  the proposed tariffs by January 20, 2026. A formal hearing is scheduled for January 22,  2026. This order is anticipated to bring clarity and financial stability to renewable energy  developers in Chhattisgarh, bolstering the state’s ongoing initiatives to enhance its  clean energy capacity and foster sustainable development.