Meeting the energy needs for domestic and productive use has been a major problem in Nepal. More than 76 percent of the population depend on biomass (Ministry of Finance, 2015) for domestic as well as productive uses (home based enterprises) in the rural areas. In case of fossil fuels, the country is totally dependent on India. The country is faced with a double‐ edged sword when dealing with the issue of energy. This is true for biomass as well as fossil fuel: on the one hand, fuel wood availability is diminishing, and at the same time, this is accompanied with a higher demand for energy. This necessitates the promotion of alternative energy sources urgently, biogas being one of these.