As the world moves toward clean energy, solar farm owners in India have a unique opportunity to not only generate electricity but also unlock additional income through Renewable Energy Certificates (RECs). These credits serve as proof of clean power generation and can be traded for profit, making them a smart financial tool for developers and investors alike.
In this guide, we explain exactly how REC credits work, how to qualify, and why they’re becoming an essential part of India’s solar energy landscape.
What Are Renewable Energy Certificates (RECs)?
A Renewable Energy Certificate (REC) is a tradable instrument that certifies 1 megawatt-hour (MWh) of electricity was produced from a renewable source such as solar.
Think of RECs as the “environmental value” of your power — separate from the physical electricity. While your solar farm feeds clean power into the grid, RECs allow you to sell the green attributes of that electricity to buyers who want to claim renewable usage.
Why Are RECs Important for Solar Farms?
1. Unlock Extra Revenue
In addition to selling electricity to the grid, you can earn income by selling RECs. This makes your solar farm more profitable and attractive to investors.
2. Meet India’s RPO Requirements
India has mandatory Renewable Purchase Obligations (RPOs) for power distributors and large energy users. When these entities can’t source enough clean power directly, they buy RECs to meet compliance targets.
Your RECs help them meet their goals — and earn you money in return.
3. Enable Green Energy Claims
RECs are also purchased voluntarily by corporations that want to reduce their carbon footprint or meet net-zero targets. Selling RECs positions your project as a clean energy contributor in global ESG supply chains.
How the REC Mechanism Works in India
India’s REC framework is regulated by the Central Electricity Regulatory Commission (CERC) and allows eligible renewable energy generators to register, receive, and trade RECs on designated power exchanges.
Step-by-Step REC Process for Solar Farms
- Project Registration
Register your solar plant with the REC Registry of India through a State Nodal Agency. - Accreditation
Obtain official accreditation confirming your project meets the criteria for REC issuance. - Metering & Generation
Install accurate meters to track every megawatt-hour (MWh) of electricity your plant feeds into the grid. - REC Issuance
For every 1 MWh of solar energy, one REC is issued by the REC Registry. - Trading on Power Exchanges
Sell your RECs on platforms like:- Indian Energy Exchange (IEX)
- Power Exchange India Limited (PXIL)
- Buyers Retire RECs
Once purchased, RECs are retired to show renewable compliance or sustainability impact.
Types of RECs Available
India recognizes two main types of RECs:
- Solar RECs – Specific to solar power projects
- Non-Solar RECs – For other renewables like wind, biomass, hydro
Solar RECs typically hold higher value due to higher demand and the premium associated with solar energy development costs.
Who Can Claim REC Credits from a Solar Farm?
To qualify for Renewable Energy Certificates (RECs) in India, your solar project must meet certain technical and regulatory requirements. Here’s a clear breakdown:
1. Source of Generation
Your project must generate electricity using approved renewable sources like solar, wind, biomass, or small hydro. Only clean energy qualifies for REC issuance.
2. No Preferential Agreements
Your plant must not be tied to a subsidized solar Power Purchase Agreement (PPA) or any form of preferential tariff with a utility.
Only those selling electricity at market-determined prices — without financial incentives — are eligible. This maintains a fair and competitive REC marketplace.
Note: Projects under state-supported PPAs or Feed-in Tariffs (FiTs) are typically not eligible for RECs.
3. Grid Connectivity
The solar farm must be connected to the main grid, and the electricity must be injected into the distribution network. Off-grid or captive systems are excluded from REC eligibility.
4. Regulatory Approval
You’ll need proper registration and accreditation through the REC Registry of India, and your project must comply with ongoing norms from CERC and respective state electricity regulators.
Benefits of RECs for Solar Developers
| Benefit | Description |
|---|---|
| Additional Income | Earn beyond power sales — monetize the clean energy attribute |
| Better ROI | Increase the return on investment for utility-scale solar projects |
| Climate Impact | RECs prove your project’s environmental contribution |
| Corporate Buyers | Tap into growing demand for clean power claims from MNCs |
| Regulatory Alignment | Helps the power ecosystem comply with national renewable targets |
How to Get Started with RECs
If you operate or plan to set up a solar farm in India, here’s how to benefit from the REC market:
- Connect with your State Nodal Agency
Confirm eligibility and begin the application process. - Get the Right Metering Infrastructure
Install revenue-grade meters with real-time tracking to ensure accurate reporting. - Complete Accreditation
Submit project documents for review and approval under REC guidelines. - Track & Claim RECs
Submit generation data to the REC Registry and receive certificates. - Sell on Power Exchange
Participate in regular trading sessions and secure the best price for your RECs.