The fixed quota for projects up to 5 MW is 6 percent free power for the first 12 years, 15 percent for up to 30 years and 24 percent for up to 40 years. After 40 years, the project will be handed over to the government.

To encourage small entrepreneurs, the government is not charging any upfront premium for small projects. However, for the projects above 5 MW, the fixed upfront premium is Rs.2 million per MW, which is in addition to free power bidding.

The average cost of a project is Rs.70 million per MW.

Himachal Pradesh has abundant water resources, with five major rivers flowing down the slopes of the Himalayas. Its power generation potential is 20,416 MW, about 25 percent of India's total potential.

Of this, around 6,500 MW has been developed.