🌱 Biomass Industry Desk
1 TPH Biomass Pellet Plant Cost, Machinery & ROI Breakdown (2026)
Full breakdown of a 1 TPH biomass pellet plant — machinery list, ₹40–60 lakh cost split, power load & WBSEDCL transformer, production cost, selling price and ROI math.
In the biomass pellet business there is no promise of the “buy a plant and the money follows” kind — only the math. The 1 tonne/hour (TPH) plant is the industry’s most popular starting size, because it is where MNRE’s ₹21 lakh/TPH subsidy math is clearest and the capital stays within ₹40–60 lakh. This guide lays the whole calculation on the open table, from machinery to monthly profit.
1. Machinery list: what each machine does
| Machine | Function | Approximate cost |
|---|---|---|
| Chipper / cutter | Chopping mustard stalks, tree branches into small pieces | ₹2–5 lakh |
| Hammer mill | Grinding the pieces into 3–5 mm powder (biomass powder) | ₹2–4 lakh |
| Rotary dryer | Bringing moisture down from 25–35% to 10–12% (the pellet’s soul) | ₹8–15 lakh |
| Pellet press / mill | Compressing the powder into 6–8 mm pellets (die and rollers) | ₹10–20 lakh |
| Cooler and screener | Cooling hot pellets, separating broken ones | ₹2–4 lakh |
| Packing unit | 50 kg bags / bulk loading | ₹1–2 lakh |
| Conveyors, bucket elevator, power panel, SCADA | Connection and monitoring | ₹5–8 lakh |
Total machinery: roughly ₹30–55 lakh. With shed-civil work (₹8–15 lakh), site preparation and electrical infrastructure, the whole project comes to ₹40–60 lakh (excluding land price). For torrefied pellets, the torrefaction unit adds a much bigger sum — that math is in the torrefied vs non-torrefied guide.
2. Power: the most under-rated cost
A 1 TPH plant typically needs a connected load of 100–150 HP (about 75–110 kW) — mostly the dryer’s fans and the pellet press motor. At this load, WBSEDCL installs a separate commercial/industrial connection and dedicated transformer in rural/semi-urban areas:
- Transformer and line cost: roughly ₹15–25 lakh (varies with distance) — many entrepreneurs forget this figure in the DPR.
- Power consumption is roughly 60–90 units per tonne of pellets; at prevailing unit rates, ₹400–700 per tonne.
- Tip: if your own plant’s waste (fine biomass) can be burned as the dryer’s fuel, the drying cost halves.
3. Production cost per tonne of pellets
| Cost head | Approximate (per tonne) |
|---|---|
| Raw material (1.1–1.2 tonnes of agri residue, incl. collection-baling-transport) | ₹1,800–2,800 |
| Power | ₹400–700 |
| Wages, maintenance, die-rollers | ₹300–500 |
| Packing and others | ₹150–250 |
| Total production cost | roughly ₹2,700–4,200 |
The selling price of pellets at thermal plants (tender-based) usually swings in the range of ₹5,500–8,500 per tonne (varies with supply distance and buyer). So the gross margin is roughly ₹1,500–3,500/tonne — toward the upper end if you have a consistent supply record in tenders.
4. The annual math: when the capital returns
Assuming a realistic mid-range scenario:
- Annual sales: 5,000–6,000 tonnes (lower in the first year, moving toward full capacity from year two)
- Gross margin: taking a safe ₹1,000–2,000/tonne, ₹50 lakh–1.2 crore a year
- Fixed costs (staff, office, sales): ₹12–18 lakh a year
- Loan instalments: at 70% bank funding (over 7 years), roughly ₹70–80 lakh a year in the first years
On this math the full capital returns in 3–4 years; with MNRE’s CFA (₹21 lakh/TPH, up to 30% of machinery cost) it drops to 2–2.5 years. On the flip side there are two risks — the seasonal gap in raw material and not winning tenders — both are covered in detail in the raw material and tender guides.
5. A 5-step checklist before you start
- Raw material first: work out the real number of baleable straw/stalks available annually within a 50 km radius — not a guess, a village-level count.
- Know the buyers: read NTPC/DVC/WBPDCL’s running tenders and their supply-distance conditions; the local brickette market (tea gardens, boilers, hotels) is an alternative buyer.
- Power feasibility: put the transformer’s cost and time (it can take 6–12 months) in the DPR before applying to WBSEDCL for the load.
- Machinery quotations: compare quotations, warranty and service networks from three established manufacturers — a cheap die-roller just means frequent stoppages.
- Subsidy sequence: file the BioURJA application and get In-Principle approval for the MNRE subsidy before the machinery order — reverse it and you lose the CFA.
❓ Frequently asked questions
How many tonnes of pellets does a 1 TPH plant make per day?
One tonne per hour means roughly 20–22 tonnes a day at 20–22 hours of running. At 300 working days a year, about 6,000–6,500 tonnes of pellets. For the first year, assume a realistic 60–70% uptime while you sort out raw material and the market.
When does the investment break even?
If everything runs smoothly, at a gross margin of roughly ₹1,000–1,500/tonne you get a ₹60 lakh–1 crore annual turnover and an operating profit of ₹25–40 lakh before loan instalments. The full capital (₹50 lakh) can come back in 3–4 years without subsidy, or 2–2.5 years with the CFA — but that is a best-case calculation.
How much space is needed?
Roughly 1–1.5 acres including the 1 TPH plant and the raw-material yard is realistic. The raw-material stock (2–3 months' worth) eats the biggest share of the space — if it isn't stored under a shed, monsoon moisture rises and production sinks.