Natgrp: If you are indeed surprised, then a must read would be my article of May 2011 which predicted the very same scenario we have seen unfolding over the past years.
India Solar Credits Drop to Floor Price for First Time
Indian solar-energy credits in June fell as much as 19 percent from the previous month, sinking to their floor price for the first time since trading began last year as new sun-powered plants came on line.
The credits, which power-distribution companies and industrial consumers buy to meet clean-energy mandates, sold for 9,300 rupees ($154), according to REConnect Energy Solutions Pvt., an Indore-based trader that records all transactions on the Indian Electricity Exchange and the Power Exchange of India.
India requires companies including Coal India Ltd. (COAL) and Tata Power Co. (TPWR) to get as much as 10 percent of their energy from renewables. Those unable to source enough locally may meet targets by buying credits from solar, wind, hydro and biomass plants via the two exchanges.
Each credit represents 1 megawatt-hour of electricity fed into the power grid. Bids from solar utilities seeking to sell credits were four times higher than buy bids, according to REConnect.
India’s solar capacity increased 79 percent to 1,686 megawatts in the last financial year as plants awarded through government auctions were completed and began generating power, according to data from the Ministry of New and Renewable Energy.