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Wind power driving India’s renewable energy transition through RECs
Sections
- Introduction
- What Are Renewable Energy Certificates?
- How do RECs work?
- Benefits of RECs for businesses and utilities
- Objectives of RECs
- Types of Renewable Energy Certificates
- REC market in India: Key trends and regulations
- Regulatory requirements for Renewable Energy Certificates
- Buying and selling RECs in India
- How Tata Power supports renewable energy through recs
- Bottomline
- FAQs
- Sources
Introduction
Did you know that every unit of clean electricity generated in India can have its own digital certificate? These are called Renewable Energy Certificates (RECs), and each one proves that one megawatt-hour (MWh) of electricity came from a renewable source like solar, wind, or hydro.
The REC India mechanism helps bridge the gap between those who produce green power and those who want to use it. They make renewable energy measurable, tradable, and easy to support for everyone from large corporations to everyday consumers. Let’s find out how these certificates work and how they are shaping India’s renewable energy journey.
What are Renewable Energy Certificates (RECs)?
A Renewable Energy Certificate (REC) is proof that one megawatt-hour (MWh) of electricity was generated from a renewable source like solar, wind, or hydro. This market-based instrument acts as a digital badge representing the environmental value of clean energy. When a renewable power plant produces electricity and feeds it into the grid, a corresponding REC is issued to record that generation.
RECs enable:
- Verified proof of renewable energy generation
- The ability to buy or sell environmental attributes independent of electricity
- Corporates to claim renewable energy use even without installing their own systems
- Project developers to earn additional revenue from REC sales
Who Issues RECs in India?
In India, RECs are issued under a regulated national framework:
- Regulator: Central Electricity Regulatory Commission (CERC)
- Issuing authority: REC Registry of India
- Managing Body: National Load Dispatch Centre (NLDC), which administers the issuance and tracking of each REC
By turning clean energy into a verifiable and tradeable asset, RECs encourage investment in renewable projects and make India’s move to sustainable power practical and measurable.
How do Renewable Energy Certificates work?
Renewable Energy Certificates (RECs) separate the environmental attributes of clean electricity from the physical power. Here is a step-by-step sequence showing how RECs are created, issued, traded, and retired in India:
1. Generation: A renewable energy project (solar, wind, hydro, biomass) generates electricity and feeds 1 MWh into the grid.
2. Metering and verification: The generation is metered and verified by the concerned authorities to confirm the amount of renewable energy produced
3. Registration: The generator registers the eligible generation with the official REC registry (REC Registry of India / NLDC) as per CERC rules.
4. Issuance: For each verified 1 MWh of eligible renewable generation, the REC registry issues one REC with a unique ID.
5. Listing for trade: The issued REC is listed on authorized trading platforms or exchanges (e.g., IEX / PXIL) or made available through bilateral contracts.
6. Purchase: Buyers (utilities, obligated entities, corporates, or voluntary buyers) purchase RECs to meet RPOs or voluntary sustainability goals.
7. Transfer: Ownership of the REC is transferred to the buyer and recorded in the registry—separate from the physical electricity transaction.
8. Claiming: The REC buyer can claim that their energy consumption is matched by renewable generation for reporting and compliance.
9. Retirement: Once used for compliance or voluntary reporting, the REC is retired in the registry so it cannot be resold; this finalizes the environmental claim.
10. Revenue to generator: The generator receives revenue from selling RECs in addition to any payment for the physical electricity (if sold separately).
Note: Every REC’s unique ID and registry records ensure transparency and prevent double-counting of the same environmental attribute.
Renewable Energy Certificates (RECs) provide a simple and measurable way to support renewable energy in India. The benefits of Renewable Energy Certificates extend across businesses, utilities, producers, the environment, and even individual consumers. These REC benefits help accelerate India’s clean-energy transition by making renewable energy more accessible, transparent, and financially viable.
Benefits of RECs for businesses
Benefits of RECs for businesses include helping companies meet sustainability targets, claim their electricity use is backed by renewable energy, and improve their brand image:
- Meet sustainability goals without on-site renewable installations
- Claim electricity consumption is backed by renewable energy
- Enhance brand image and investor appeal through verified green energy
Benefits of RECs for utilities
Benefits of RECs for utilities include meeting regulatory obligations efficiently and supporting the growth of renewable energy:
- Fulfill Renewable Purchase Obligations (RPOs)
- Cost-effective alternative to building new renewable projects
- Support growth of India’s renewable energy market
Benefits of RECs for renewable energy producers
Benefits of RECs for renewable energy producers include creating additional revenue and making projects more financially attractive:
- Additional revenue stream from selling the environmental attributes of electricity
- Makes renewable energy projects financially attractive and encourages investment
- Boosts overall renewable energy capacity in India
Benefits of RECs for the market
Benefits of RECs for the market include improving transparency, efficiency, and investment in the renewable energy sector:
- Creates a transparent and standardized trading system for renewable energy
- Encourages investment, innovation, and competition in the clean energy sector
- Improves liquidity and efficiency in renewable energy markets
Environmental Benefits of RECs
Environmental benefits of RECs include reducing carbon emissions and supporting India’s transition to cleaner energy:
- Reduces greenhouse gas emissions by incentivizing clean energy production
- Supports India’s transition to low-carbon power
- Enables measurable climate action for organizations and individuals
Benefits of RECs for individuals
Benefits of RECs for individuals include an easy way to support renewable energy and participate in India’s green energy movement:
- Offers an easy way to support renewable energy without installing renewable systems
- Allows participation in India’s green energy movement
- Provides a sense of contribution toward a sustainable future
Renewable Energy Certificates were introduced in India with clear policy and market objectives. These objectives ensure that renewable energy becomes measurable, tradeable, and widely accessible across states and consumer segments.
1. Promote renewable energy generation across India
RECs incentivize developers to set up renewable energy projects—especially in states with poor renewable resource availability or low demand.
2. Enable flexibility in meeting Renewable Purchase Obligations (RPOs)
Obligated entities such as DISCOMs, open access consumers, and captive power plants can meet their RPO targets even if they cannot procure physical green power.
3. Create a uniform, transparent national market
By standardizing certificates and trading rules across India, RECs ensure:
- consistent pricing
- transparent transactions
- verifiable tracking through the REC Registry
4. Remove geographic barriers in renewable energy trading
A company in a non-renewable-rich state can still support green power generated in another state, enabling nationwide participation.
5. Provide an additional revenue stream for renewable generators
RECs make renewable energy projects more financially viable by allowing generators to earn:
- Revenue from selling electricity
- Additional income from selling RECs
6. Encourage voluntary participation in clean energy
Companies and individuals who want to reduce emissions can purchase voluntary RECs, helping expand renewable adoption even beyond mandated RPO needs.
7. Support India’s long-term climate and decarbonization goals
By monetizing the environmental attributes of clean generation, RECs help India move closer to:
- net-zero goals
- reduced carbon intensity
- increased renewable capacity
Solar power generation earning Renewable Energy Certificates (RECs) in India
In REC India, Renewable Energy Certificates come in different forms depending on the source, purpose, and how they are traded. Understanding these types helps buyers and generators make informed choices in the renewable energy certificates market in India.
1. By source of generation
In the renewable energy certificates market in India, RECs are broadly classified based on the type of energy source that generates them. The two main categories are solar RECs and non-solar RECs, each serving a unique role in promoting India’s renewable energy growth.
| Criteria | Solar REC | Non-Solar REC |
|---|---|---|
| Energy Source | Generated exclusively from solar power plants using photovoltaic or solar thermal technology. | Issued for renewable energy generated from non-solar sources such as wind, hydro, biomass, or geothermal. |
| Market Value | Typically priced higher due to greater production costs and increasing demand for solar energy in India. | Prices may vary depending on the source and availability, often providing a cost-effective alternative to solar RECs. |
| Purpose | Encourages investment and innovation in solar power projects across India. | Promotes diversification of India’s renewable energy mix beyond solar. |
| Eligibility | Available to entities generating electricity through solar installations registered with a recognized REC registry. | Available to producers generating electricity through approved non-solar renewable technologies. |
| Environmental Impact | Helps reduce dependence on fossil fuels by promoting solar energy adoption. | Supports a balanced clean-energy grid by integrating multiple renewable sources. |
2. By trading structure
In India’s REC trading market, renewable energy certificates can be classified based on how they are traded. This helps determine whether the REC is linked to the physical supply of electricity or traded independently. The two primary forms are Bundled RECs and Unbundled RECs.
| Criteria | Bundled RECs | Unbundled RECs |
|---|---|---|
| Definition | Sold together with the physical electricity generated from renewable sources. | Sold separately from the physical power, representing only the environmental attributes. |
Market Participants | Typically used by utilities and distribution companies purchasing both power and certificates. | Common among corporates and institutions buying only RECs to meet sustainability or RPO goals. |
Flexibility | Limited flexibility as both power and certificate are tied together. | Offers higher flexibility and liquidity in trading since they can be sold independently. |
Trading Platform | Traded directly through power purchase agreements or exchanges. | Traded exclusively through power exchanges like IEX or PXIL. |
Example | A utility buys solar power and the associated REC together. | A business purchases only the REC from a registered generator, not the electricity. |
3. By market origin
RECs can also be categorized by their market origin, distinguishing between those issued domestically and those recognized internationally. This classification is crucial for organizations that operate across borders or participate in global sustainability initiatives.
| Criteria | Domestic RECs | International RECs (I-RECs) |
|---|---|---|
Definition | Issued within India under the REC framework regulated by CERC and managed by the REC Registry of India. | Issued under the International REC Standard, enabling cross-border renewable energy recognition. |
Governing Body | Central Electricity Regulatory Commission (CERC) and National Load Dispatch Centre (NLDC). | International REC Standard Foundation and accredited issuers. |
Applicability | Used to meet India’s Renewable Purchase Obligation (RPO) targets. | Used by global corporations to offset energy consumption across different regions. |
Recognition | Recognized only within India’s renewable energy market. | Recognized globally across multiple jurisdictions. |
Example | A state distribution company purchasing RECs from Indian solar projects. | A multinational company buying I-RECs to meet global sustainability goals. |
The Renewable Energy Certificate (REC) market in India provides a transparent platform for promoting renewable energy generation and trading. It allows renewable energy producers, utilities, and businesses to participate in India’s green energy transition while meeting compliance and sustainability goals.
How the market works
In India, RECs are traded on recognized exchanges such as the Indian Energy Exchange (IEX) and Power Exchange India Limited (PXIL). Renewable energy generators sell RECs separately from electricity, while buyers, including companies and utilities, purchase them to meet Renewable Purchase Obligations (RPOs) or voluntary sustainability targets.
Key trends in the REC market
The REC market has evolved significantly, and several trends stand out for stakeholders:
- Growing demand for solar RECs: With India’s rapid solar expansion, Solar RECs are increasingly sought after and often trade at premium prices.
- Price volatility: REC prices fluctuate depending on supply, demand, and regulatory updates, making market monitoring essential for buyers and sellers.
- Increased participation: More businesses and utilities are joining the market, reflecting India’s strong commitment to clean energy.
Regulations and issuers
The Central Electricity Regulatory Commission (CERC) regulates the REC framework in India. Authorized registries like the REC Registry India issue certificates to eligible renewable energy generators. Both compliance and voluntary RECs are recognized under Indian regulations, ensuring authenticity, transparency, and accountability.
Who can participate
Stakeholders eligible to participate in the REC market include:
- Renewable energy generators eligible for RECs
- Obligated entities such as utilities meeting RPOs
- Businesses and individuals purchasing voluntary RECs to support renewable energy
The REC market in India continues to expand, offering a flexible and standardized mechanism to promote renewable energy. Understanding trends, regulations, and participation rules helps stakeholders make informed decisions while contributing to India’s sustainable energy growth.
To participate in India’s REC market, certain regulatory requirements and eligibility criteria must be met. Understanding these rules helps renewable energy generators, utilities, and businesses navigate the system effectively while complying with legal obligations.
Who is eligibility for RECs
The following entities can obtain or trade Renewable Energy Certificates in India:
- Renewable energy generators: Power producers using sources like solar, wind, biomass, or small hydro, whose projects are accredited under government guidelines.
- Obligated entities: Utilities and companies required to meet Renewable Purchase Obligations (RPOs) as per CERC regulations.
- Voluntary participants: Businesses or individuals who wish to support renewable energy and reduce their carbon footprint.
Regulatory requirements
While REC eligibility is important, the following regulatory requirements must also be met:
- Projects must be registered with authorized REC registries in India, such as the REC Registry India.
- Certificates are issued only for eligible renewable energy generation that meets government standards.
- Compliance and voluntary RECs must adhere to CERC guidelines to ensure transparency, authenticity, and accountability in the market.
By following these regulations and understanding eligibility, stakeholders can participate in the REC market with confidence, support India’s renewable energy goals, and make informed decisions about buying or selling certificates.
Participating in the REC India market involves buying and selling certificates to support renewable energy, meet compliance obligations, or achieve sustainability goals. Understanding the process ensures transparency, efficiency, and informed decision-making for businesses, utilities, and individual participants.
How to buy and sell RECs in India
- For buyers: Companies or utilities purchase RECs through authorized exchanges like IEX and PXIL. This allows them to claim their electricity use is backed by renewable energy and meet Renewable Purchase Obligations (RPOs).
- For sellers: Renewable energy generators receive RECs for each megawatt-hour (MWh) of electricity fed into the grid. They can sell these certificates on the exchanges to generate additional revenue.
- Trading process: All transactions are recorded through the REC Registry India, ensuring transparency and authenticity. Prices fluctuate based on market demand, type of REC (solar or non-solar), and regulatory updates.
Tips for participants
- Monitor market prices and trends to maximize value.
- Ensure eligibility and proper registration before trading.
- Consider voluntary RECs to enhance corporate sustainability initiatives.
By understanding how to buy and sell RECs, stakeholders can actively support India’s renewable energy growth, comply with regulations, and contribute to a cleaner energy ecosystem.
Building solar capacity that contributes to India’s Renewable Energy Certificate market
Tata Power enables businesses, utilities, and individuals to participate in India’s clean energy transition through Renewable Energy Certificates (RECs). By integrating RECs into its renewable power trading and services, the company helps match demand with verified green generation, making sustainable energy both accessible and credible:
- Enables access to clean energy certificates that align with both compliance requirements (such as RPOs) and voluntary sustainability goals.
- Provides transparent verification of environmental attributes, ensuring each REC carries a traceable origin so buyers can confidently claim their usage is backed by renewable generation.
- Supports multiple renewable energy sources including solar, wind, and hydro through its trading and generation platforms, thereby broadening the supply of RECs in India’s market.
- Helps businesses align with frameworks such as RE100, CDP, GRI, BRSR and SBTi by pairing RECs with other renewable procurement solutions (e.g., green PPAs, energy-storage) offered through Tata Power.
- Facilitates cost efficient sourcing of renewable power and RECs, leveraging its power trading expertise and participation in markets like the Indian Energy Exchange (IEX) and Power Exchange India Ltd (PXIL).
By offering a comprehensive suite of services that includes RECs, Tata Power plays a pivotal role in making the REC mechanism practical and impactful for India’s renewable energy ecosystem. Wondering how you can access RECs and other clean energy solutions through Tata Power’s offerings? Explore now
Renewable Energy Certificates (RECs) provide a simple, market-based way for businesses, utilities, and individuals in India to support renewable energy, meet Renewable Purchase Obligations (RPOs), and achieve sustainability goals. By understanding how RECs work, their types, and the regulatory framework, stakeholders can participate confidently in the REC market in India. Tata Power Trading Company offers access to verified RECs, renewable power trading, and sustainable energy solutions, making it easier for companies and consumers to contribute to India’s clean energy growth.
Frequently asked questions
The frequently asked questions section is a reliable source for unlocking answers to some of the most crucial inquiries. Please refer to this section for any queries you may have.
- FAQ
The cost of Renewable Energy Certificates in India varies based on market demand, REC type, and trading activity on power exchanges.
In the REC India market, prices for solar RECs and non-solar RECs fluctuate during auctions on IEX and PXIL, and the renewable energy certificate value changes frequently depending on supply-demand trends.
You can buy RECs in India through authorized power exchanges such as IEX and PXIL.
Buyers must register on the exchange, participate in scheduled REC trading sessions, and purchase Renewable Energy Certificates in India either for RPO compliance or voluntary sustainability goals. Tata Power Trading can also facilitate REC procurement for businesses.
A Renewable Energy Certificate in India remains valid until it is used and retired by the buyer.
The REC does not expire automatically; instead, once a consumer claims it for reporting or compliance, the certificate is permanently retired in the REC Registry.
RECs in India are issued by the Central Agency, operated by the National Load Dispatch Centre (NLDC).
Once a renewable energy project is accredited and registered, the NLDC verifies its generation data and issues the corresponding Renewable Energy Certificates.
RECs represent the environmental attributes of renewable energy, while PPAs involve purchasing actual electricity. A PPA delivers physical power under a contract, whereas a REC is a separate digital asset that documents renewable energy generation, allowing REC trading India without receiving the electricity.
One REC equals 1 megawatt-hour (MWh) of renewable electricity generated.
This unit helps standardize how renewable energy production is measured across the country.
Yes, you keep and use the electricity even if you sell the REC. Selling the REC only transfers the environmental claim, meaning you cannot claim your solar power as green, but you still consume the electricity generated.
RECs certify renewable electricity generation, while carbon offsets certify emissions reductions to neutralize carbon emissions from unrelated activities like travel or manufacturing.
The REC India market operates through accreditation, issuance, trading, and retirement of Renewable Energy Certificates.
Generators produce renewable power, receive RECs from the NLDC-managed registry, and then trade them on exchanges. Buyers purchase RECs for RPO compliance, sustainability reporting, or voluntary green claims.
RECs are traded on two authorized power exchanges: the Indian Energy Exchange (IEX) and Power Exchange India Limited (PXIL).
These platforms enable transparent price discovery and efficient REC trading in India, helping entities meet Renewable Purchase Obligations and capture the benefits of Renewable Energy Certificates.
Sources
1. Renewable Energy Certificates Explained – Constellation
2. Renewable Energy Certificates (RECs) – Investopedia
3. Renewable Energy Certificates in India – Avaada Energy
4. Renewable Energy Certificates (RECs) – EPA
5. What Is a Renewable Energy Certificate (REC) in India? – Waaree
6. REC Registry India – Official Portal
7. REC Registry FAQs – Issuance, Validity & Procedure
8. Renewable Energy Market – IEX India
9. CERC Annual Report 2022–23: REC Market & Regulations
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