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🌱 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.

🗓️ Published: 1 October 2026✏️ Updated: 1 October 2026🛡️ Verified: 1 October 2026📖 4 min read

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

  1. 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.
  2. 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.
  3. 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.
  4. Machinery quotations: compare quotations, warranty and service networks from three established manufacturers — a cheap die-roller just means frequent stoppages.
  5. 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.

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