A methodology for financial evaluation of biogas technology for domestic use in India using recently developed cost functions is reported. Analytical expressions for the unit cost of biogas and cost per unit of useful energy delivered by a biogas plant in combination with other suitable technologies have been developed. Net present value and discounted pay-back period have been calculated. The sensitivity of the unit cost of biogas, the cost per unit of useful energy, and the net present value with respect to a number of variables is also reported. Copyright (C) 1996 Elsevier Science Ltd.