Indiscipline by powerful states leads to chaos in REC mechanism: Verma, CERC

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Greentech Lead India: The solar industry in India is facing tremendous challenges due to lack of clarity in policies and reluctance of various state governments to follow the central Renewable Energy Certificates (REC) mechanism, said V. S. Verma, member, Central Electricity Regulatory Commission (CERC), at the recently held Annual Conference on Solar Business in India.

REC seeks to address the mismatch between availability of RE sources and the requirement of the obligated entities to meet their RPO.  REC is also expected to encourage the RE capacity addition in the States where there is potential for RE generation.

The distribution companies, Open Access consumer, Captive Power Plants (CPPs) will have option of purchasing the REC to meet their Renewable Purchase Obligations (RPO). RPO is the obligation mandated by the State Electricity Regulatory Commission (SERC) under the Act, to purchase minimum level of renewable energy out of the total consumption in the area of a distribution licensee.

States where solar implementation is high are not complying with the central policy on REC, Verma added. For example, the state of Tamil Nadu is trying to generate its own REC, and such decisions by individual states cause disturbance to the central programs.

This lawlessness of the powerful states is creating a total indiscipline in the solar value chain, taking a huge toll on national solar targets.

Verma further said there is also need to create awareness among the lawmakers and bureaucracy about the profitability of solar energy. There is a lot of information gap among authorities. They need to be educated about the long-term benefits of solar over fossil fuel sources. Solar has already achieved price parity with conventional sources in some of the states in India, and it’s a good sign that it will work in India.

Stage 1 of Jawaharlal Nehru National Solar Mission (JNNSM) has created a powerful solar ecosystem in the country.However, lack of governance is affecting solar implementation in India. The country has devised powerful solar policies, but implementation of these policies is where we are lagging behind, he added.

Solar, like any other industry, cannot survive on subsidies in the long run, Verma said. Solar tariff is falling; however, it cannot fall sequentially. To develop a sustainable solar industry and ensure level-playing in the utility sector, solar energy rates should be kept at standard rates so that anyone can enter the market without subsidy, he added.

Also read: RPO a failure, Greenpeace calls for revision of renewable energy policy on the basis of energy equity principles


Rajani Baburajan

[email protected]


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