Abstract Energy production from anaerobic digestion of organic waste and dedicated digestable biomass is a promising climate change mitigation option. Over the last ten years anaerobic digestion has become established in many European countries. The plants have been developed for renewable energy generation, but also to control the emission of odors from zootechnical farms and to stabilize biomass before its agronomic use. In Italy the subsidies available for power generation from biomass have given rise to renewed interest in biogas, creating new opportunities for the agricultural and livestock sectors. Despite of this, in Southern Italy the manure is highly dispersed over a large number of small-size cattle farms, while power generation facilities are affected by scale economies and the aggregation of input biomass is a major logistic, managing, economic and environmental drawback towards the diffusion of such technologies. In this paper, an investment decision methodology for the assessment of optimal size and feedstock mix of biogas power plants fed by cattle manure and energy crops is presented. The methodology is applied to one of the most promising basins of Puglia region, in Southern Italy, represented by the Municipalities of the Local Action Group “ Terra dei Trulli e del Barsento ”, Province of Bari. The main factors influencing the profitability of these investments are assessed, with biogas power plant size ranging between 50 kW and 1 MW, and on the basis of the recently introduced feed-in tariff scheme for such plants (D.M. 6 July 2012). The results show that a high manure recovery rate, the reuse of biogas slurry and the cogeneration options are major key factor for the profitability of the investments.