REC suggestions jointly submitted by Solar Energy Association of Gujarat and Natural Group

REC modification suggestions were jointly submitted by Solar Energy Association of Gujarat and Natural Group to ensure the future of Solar in India.

These suggestions will also be discussed by Shri Pranav Gupta and Ritesh Pothan on the panel chaired by CERC Chairman – Pramod Deo on the 8th of May at the Solar Markets India Event at Okhla, New Delhi. 

Be there to understand the future of Solar in India

Read Below for the complete submission

Dated: 23 – 4 – 2013
Kind Attn:
Dr. Pramod Deo – Chairman
C/O Mr. Rajiv Bansal – Secretary
Central Electricity Regulatory Commission
New Delhi, India

Subject: Suggestions for Amendments to the CERC Act related to Renewable Energy Certificates (RECs) on behalf of Solar Energy Association of Gujarat

Respected Dr. Pramod Deo,

On behalf of esteemed members of Solar Energy Association of Gujarat who are the largest set of developers in the country, we appreciate the notice for the second amendment of the REC Mechanism and feel that RECs have the ability to make India a country of the future while ensuring that our path is always in the true direction.[List of Members enclosed].

As rightly observed in your preamble to the Draft Amendments, the country and solar stakeholders have gathered considerable experience with the current set of REC regulations and it is clear that they are not acceptable to the lender banks and Financial Institutions. As such no significant investment is taking place based on REC. As against this backdrop REC holds a great potential – and perhaps the only long term alternative for developing Renewable Energy, especially solar energy.

Our request to you would be to enable primary players, developers to consider Renewable Energy especially Solar Developers to make significant investment based on REC – thus ensuring widespread use of solar energy and contribute towards reducing the adverse impact of Global Warming and Climate Change. It is beyond any reasonable doubt that solar energy has the potential of solar to considerably help the country of its energy dependence on foreign energy imports and to realize its potential, we request you to consider the following points when finalizing the changes to the REC mechanism:

1. Life of RECs to be a minimum of 10 years in order to make it Bankable.

2. Connectivity to Grid for REC eligibility should not be insisted upon. There are many companies with large captive consumption. If such organizations invest to generate solar energy and consume the same – grid connectivity involving open access and other charges should not be insisted up on.

3. There should be total transparency on Open Access and other charges whenever Third Party Sale is involved.

4. Open Access charges in case of Third Party Sale should not exceed Re.1/kwh. The inefficiency of Discom’s in terms of Losses etc. should not be passed on to the Solar investor – or at least it should be pegged to Re. 1/kwh throughout the country.

5. The very purpose of the new Electricity Act, 2003 will be defeated if Third Party Sale is being thwarted in the name of ambiguous Open Access Charges.

6. RECs should be traded on the exchange on a preferential basis, those registered earlier should be given preference over others at the similar rates.

7. Forward sale and trading of RECs permitted for up to 10 years

8. Energy Generated in the form of steam through solar concentrators – i.e. steam augmentation through solar resulting in saving/displacement of fossil fuels like coal in an existing conventional power plant should be eligible for RECs. A suitable mechanism needs to be worked out for this purpose.

9. RE Cess of Rs. 1/- all inclusive per KWh charged by DISCOM, in place of RPOs. No cross subsidy and lower duties to be charged to the developer / consumer for green power. This will allow for DISCOMs to promote green power projects without burdening them and free developers from extra costs especially in states like Maharashtra.

10. All states including power surplus states should be mandated to sign solar PPAs at variable APPC rates as determined by the state regulator to enable REC generation. This is justified by the fact that any surplus power can be traded at the Power Exchanges at higher rates.

11. SEB’s to proportionate Wheeling, Banking and Storage charges based on PLFs not MW. E.g. 1 MW of Coal should be treated equivalent to 3-4 MW of Solar / Wind.

12. Rates of solar RECs to be capped at Rs. 12/- with a floor price of Rs. 8/- making this affordable for all RPO entities. This is keeping in mind the current reduced Capex prices of Rs. 70/- per Wp.

13. Current term of REC extended from 2017 to 2020 with visibility to extend beyond 2020

14. Offgrid plants with internet metering should be allowed RECs and developers should include 100KW+ by combining installations.

15. Special Funding mechanism with low interest rate funds from National Clean Energy Fund for Solar REC projects should be set up – monitored by MNRE.

16. 6% of all power for commercial and industrial plants to come from Solar RECs by 2017 with an increase of 1% yearly (capped at 20% of consumed power).

Pranav R Mehta
Solar Energy Association of Gujarat


About Ritesh Pothan

Ritesh Pothan, is an accomplished speaker and visionary in the Solar Energy space in India. Ritesh is from an Engineering Background with a Master’s Degree in Technology and had spent more than a decade as the Infrastructure Head for a public limited company with the last 9 years dedicated to Solar and Renewable Energy. He also runs the 2 largest India focused renewable energy groups on LinkedIn - Solar - India and Renewables - India
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