RECs - Specific to India

Renewable Energy Certificates


A Renewable Energy Certificate represents the property rights to the social, environmental and other non-power qualities of renewable energy generation.

The associated benefits and attributes of an REC can be sold separately from the physical electricity. RECs allow for the flexibility of acquiring green power varied geographical area. RECs also allow for the ability to use the attributes to any facility of choice.

How Renewable Energy Certificates Work

Please see the following Renewable Energy Certificates (RECs) Chart*

*Courteousy of the Environmental Protection Agency of the United States

Renewable Energy Certificates

At the point of generation, the components can either be sold separately or together. The Renewable Generator provides the electricity into the electrical grid. Here, the electricity is mixed with other generation sources.

One REC is produced for every 1000 kilowatt-hour (1 megawatt-hour) of electricity placed onto the electrical grid. Should the electricity be sold separately from its associated RECs, the electricity is no longer considered to be "green" or "renewable". The REC is what gives the benefits of renewable electric power, not the actual electricity itself.
RECs serve the purpose of claiming and accounting for the associated attributes of renewable energy generation. The following is a list of attributes that an REC can convey to an owner:

Primary Attributes

Secondary Attributes

- Emission of Renewable Energy
- Renewable fuel source
- Can be eligible for certification or RPS
- Geographic location of Generator

- Price Stability
- Avoid unnecessary emissions

Selling RECs

There are certain entities that are eligible to sell Renewable Energy Certificates. Such entities need to meet certain criteria as follows:

a. The type of renewable energy source is approved by the State Commission and the Ministry of New and Renewable Energy (MNRE)

b. The entity does not have a PPA (Power Purchase Agreement) for the capacity related to the generation to sell the electricity at a tariff that is determined by the appropriate Commission.

c. Those entities that do not have an agreement to sell electricity to local distribution companies

d. Those entities that sell the electricity to:

i. Distribution licensee in that area at a price that does not exceed the pooled cost of Power Purchase of such Distribution Licensee, OR

ii. Any other licensee or an open access consumer at a mutually agreed price, or through a power exchange at market determined price. Also, selling electricity to other entities beside local distribution company at market driven prices

Purchasing RECs

There are certain entities that are mandated to purchase a specified amount of renenewable energy with their overal consumption. These are known as "Obligated Entities". Obligated Entities can meet their State's Renewable Purchase Obligation (RPO) either by the purchase of RECs or purchasing renewable energy.
There are certain entities that can be considered Obligated Entities:

a. Open Access Consumers

b. Distribution Licensees

c. Captive Consumers

REC Categories

Renewable Energy Certificates can be classified into two categories:

a. Solar Certificates that are issued to eligible entities for the generation of electricity, solar being the renewable energy source

b. Non-Solar Certificates that are issued to eligible entities for the generation of electricity, where other renewable energy types are the source (does not include solar)