There are three main reasons someone considers setting up a Biogas Plant. You may want to (i) reduce your cooking gas expenditure, (ii) find a solution for managing cattle dung and/or other organic waste, or (iii) start a biogas plant based business. Whatever your reason may be, this book provides data for each of the abovementioned reasons, and tells you what to expect when you invest money for the same (2026 data).

What is a Biogas Plant?

A Biogas plant helps in converting agricultural waste and/or cattle dung to biogas. Biogas can further be used as fuel to generate cooker or electricity. Along with biogas, the plant helps in producing farm yard manure. Farm yard manure is also known as slurry. Biogas plant is also known as 'Gobar gas plant' as cattle dung is the major input in Biogas plant in India.

How to make a Biogas Plant?

A Biogas plant is not very difficult to build. Ideally, you need a regular and sufficient supply of dung or other organic wastes. If your house has 3 to 4 cows, the organic waste generated by the cows is sufficient to setup a biogas plant in your house. There are two main types of Biogas plants. They are KVIC type and Deenbandhu type. The main difference between the two types is that the dome of Deenbandhu type biogas plant is fixed while the dome of KVIC type biogas plant is floating. KVIC type biogas plant is made of stainless steel drum while Deenbandhu type biogas plant is made of Fiber Reinforced Plastic (FRP).

Select plant size

One plant is typically measured in cubic meters (m³). A plant of 2 m³ is adequate for a small household kitchen. Larger households and small scale dairies should consider a larger plant, in the range of 3 m³ to 4 m³.

Dig and construct tank

The digester tank is constructed from masonry and typically built next to the cattle shed.

Install In and Out

The inlet pipe is used to add dung and water to the tank. The outlet pipe is used to remove the residue.

Gas Line Connection

Once the plant is operational, a piped connection brings the biogas to the household kitchen.

Use the Plant

It takes about 30 to 45 days to realize gas generation from the plant. During this time the plant is regarded as 'immature' and should not be used.

Cost of Setting up a Biogas Plant in 2026

The cost of establishing a biogas plant is the first consideration for the majority of clients.

The prices mentioned below are excluding the cost of excavation, masonry work and other miscellaneous charges.

Family size Plant (1-2 m³): Approx. ₹ 25,000 - ₹ 50,000
Plants with a capacity in the range of 3-4 m³: Approx. ₹ 50,000 - ₹ 90,000
Floating Dome Design Plants (KVIC): Cost approx. 30-45% more than similar capacity Deenbandhu plants.
Flexi bag Digesters: Approx. ₹ 15,000 - ₹ 30,000

Plants may cost more depending on design and the region they are constructed in. Small household plants (1-2 m³) may cost in the range of ₹ 25,000 - ₹ 50,000 and larger plants (3-4 m³) may cost in the range of ₹ 50,000 - ₹ 90,000 in the year 2026. Plants of the Deenbandhu design may cost less than floating dome designs, which may cost approx. 30-45% more than similar capacity Deenbandhu plants.

Prakati

The costs mentioned above are for small-scale biogas plants and may range between ₹ 50,000 - ₹ 1,00,000 for medium to large scale plants used by hotels and industries.

Koshishindia

A subsidy is available to the client by the central government under the scheme National Bioenergy Program. Small and medium biogas plants (1 - 25 m³) may avail a subsidy in the range of ₹9800 - ₹70,400. An additional 20% subsidy is given to SC/ST beneficiaries and people from the north eastern region as well as to farmers from hilly regions. The GOBAR-Dhan scheme provides financial assistance of ₹ 37,000 per household unit to promote household level biogas plant installation.

State Department of Agriculture policies differ and hence the subsidies and eligibility requirements vary. Thus, the best source of information regarding financial requirements and procedures would be the local Krishi Vigyan Kendra or district rural development office.

Agro Potli

The Agro Potli scheme offers a subsidy of 75% of the cost for each of the following components, up to a maximum of INR 25,000: solar pump, solar water heater, solar home light system, bio-gas plant, waste water treatment plant, and rainwater harvesting structure.

Biogas Plant Equipment

The basic equipment for a biogas plant includes a digester tank, an inlet for waste, a dome or floating drum, outlet for slurry, and a network of pipes and a valve. A biogas plant is connected to a stove. For larger and commercial/industrial biogas plants, additional equipment and devices may be necessary.

Industrial Biogas Plants and Related Business Opportunities

Big developments are occurring in the biogas industry within India. The approval of the GOBARdhan scheme by the Union Cabinet in 2026, created a 23,731 crore (~2.37 billion USD) investment for the period from 2026 to 2036, to fund numerous projects including the development of the biogas infrastructure of the country. Other projects of the scheme will provide the industry with a stable price for biogas, credit, and other support. Biogas plants and CBG (Compressed Bio Gas) projects will receive support under the scheme. Other polices of the government of India have also created an enabled environment for the biogas industry. The priority sector status for lending by the RBI for biogas and CBG projects will further ease the financial requirements for these projects.

Bioflux

Biofics

There are several public and private sector financial institutions that will provide support to biogas project. Other policies of the central government will also complement the biogas projects. The reeling and allied industries related to the biogas industry will also create opportunities for employment. The annual post-tax returns for biogas related projects will be in the range of 14 to 22%. Setting up a biomethane or CBG plant will be a good business opportunity.

Imarcengineering

Imarcengineering

Refer to the links/sites given below for information on costs of biogas plant and CBG plant.

FAQ

1. Cost of household biogas plant

Before any subsidies, the cost of a 1 to 2 m³ household biogas plant will be in the range of twenty five thousand to fifty thousand rupees (INR 25,000 to INR 50,000).

2. Are there any government incentives for biogas plants in India?

Yes. Biogas plants in the rural sector and household level can avail various financial incentives from government of India (GOBAR-Dhan) and Ministry of New and Renewable Energy (MNRE) schemes. The financial assistance under MNRE schemes ranges from INR 9,800 to INR 70,400, while that under GOBAR-Dhan scheme is about INR 37,000. However, financial assistance under different schemes may vary from state to state. So, the applicant may contact the office of the Rural Development department in his/her state.

3. What is the average wait time for biogas plant to become operational?

It takes about 30 to 45 days after the feed has been regularly provided. However, there can be variations depending on weather conditions.

4. What is the difference between Deenbandhu and KVIC biogas plants?

A Deenbandhu biogas plant has a fixed dome design and is easy to construct, while a KVIC biogas plant has a floating steel or FRP cover. A Deenbandhu biogas plant is cheaper and of low maintenance, but a KVIC biogas plant facilitates determination of gas accumulation.

5. Is it a good business opportunity to set up biogas plants in India?

Yes, It is a good business opportunity, as CBG projects under the 2026 GOBARdhan scheme, provide capital assistance and priority bank loans. However, business projects may have to undergo evaluation and meet conditions set by the scheme in order to be granted approval by the concerned authorities.

6. What are the raw materials used in a biogas plant?

Any organic material can be used in a biogas plant. In rural India, Cow dung is widely used, however, kitchen waste, poultry litter and other farm waste can also be used.

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