What is a Renewable Energy Certificate (REC)?

A REC is a tradeable instrument representing the environmental attributes of 1 MWh of renewable electricity injected into the Indian grid. It unbundles the "green" value of renewable energy from the electricity commodity itself.

REC market mechanics

1. A renewable generator registers with NLDC/RLDC and applies for REC accreditation
2. For every 1 MWh injected, the generator receives one REC certificate
3. RECs are traded on IEX (Indian Energy Exchange) or PXIL at CERC-set floor and forbearance prices
4. Obligated entities buy RECs to fulfil RPO without installing renewable capacity themselves
5. RECs are surrendered to the SERC for RPO compliance — each REC extinguishes 1 MWh of obligation

Solar RECs vs Non-Solar RECs

India historically maintained separate Solar REC and Non-Solar REC price bands. CERC's 2022 amendment merged them into a unified REC with a single price band of ₹1.50–3.00/kWh.

REC vs PPA-based RPO compliance

Obligated entities can meet RPO through owned/PPA renewable capacity or by purchasing RECs. RECs provide flexibility but are typically more expensive than long-term PPAs.