Renewable Energy Certificates
What is Renewable Energy Certificate?
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Renewable Energy Certificates are the attributes of electricity
generated from renewable energy sources.
These attributes are unbundled from physical electricity
The two products – the attributes embodied in the certificates and
the commodity electricity can be sold or traded separately.
One REC represents 1MWh of energy generated from renewable
sources.
The Benefits
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RECs are expected to become the currency of renewable energy
markets due to their flexibility and the fact that they are not subject
to geographic and physical limitations of commodity electricity.
RECs can be used by the obligated entities to demonstrate
compliance with regulatory requirements, such as Renewable
Purchase Obligations
Obligated Entities
The Obligated Entities are entities which are mandated to
purchase a defined quantum of renewable energy of their overall
consumption or RECs to meet their obligation under Renewable
Purchase Obligation.
Distribution
Licensees
Captive Consumers
Open Access Users
Who are Eligible entities?
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Eligible entities are those who generate energy from
renewable sources. Those eligible RE generators would be
allowed to sell renewable energy in any of the following
combinations:
 Sale of green electricity to local distribution company
at state regulated tariff also known as feed-in-tariff
 Sale of electricity to local distribution company at price
not exceeding pooled cost of power purchase of that
distribution company and REC to any other entity
through power exchange
 Sale of electricity to any entity other than local
distribution company and RECs to any entity through
power exchange
Categories of Certificates
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Solar Certificates: For Generation of Electricity based on
solar as renewable energy source
Non- Solar Certificates: For Generation of electricity based
on renewable sources other than solar.
Eligibility for application of Issuance of RECs
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It does not have any PPA for the capacity related to such
generation to sell electricity at preferential tariff
determined by the appropriate commission
It has obtained Certification of Accreditation from State
Nodal Agency
It has obtained Certificate of Registration from Central
Agency (NLDC)
It sell electricity generated either to
 To distribution licensee in the area in which the eligible
entity is located, at a price not exceeding the pooled
cost of the power purchase of such distribution licensee
Or
 To any other licensee or to an open access consumer at
mutually agreed price, or through power exchange at
market determined price.
The Mechanism
Salient Features of RECs
Participation
Voluntary
REC Denomination
1MWh
Validity
365 days after issuance
Categories
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Solar REC
Non-Solar REC
Trading Platform
Power Exchanges only
Banking
Not allowed
Borrowing
Not allowed
Transfer Type
Single transfer only, repeated trade of the same certificate is not possible
Penalty for non-compliance
‘Forbearance’ Price (Maximum Price)
Non-Solar [Rs. 3900/REC], Solar [Rs.17,000 /REC]
Price Guarantee
Through ‘Floor’ Price [Minimum Price]
Non-Solar [Rs. 1500/REC], Solar [Rs. 12000 / REC]
Price Discovery Mechanism
As per Power Exchanges’ Business Rules for REC