The Central Electricity Regulatory Commission(CERC) has finally come up with a solution to revive the dysfunctional solar REC markets by addressing the biggest challenge – the high price band for Solar RECs.(The inventory of RECs – non-solar and solar – crossed the 1 Crore mark at the end of the last trading session on September 24, 2014. Read the details here).
In a draft proposal, the CERC has proposed to slash the floor price by more than 60% and the forbearance price by about 57%. The proposed price revision is given below. The new prices are proposed for all solar projects commissioned on or after 1 April 2014.
The Average Pooled Purchase Cost(APPC) in most states is around Rs. 3.5/kWh, and a solar developer can realise revenues of around Rs. 7/kWh under the proposed revisions(Rs. 3.5/kWh through APPC and Rs. 3.5/kWh minimum through REC trading). This revision brings the cost of solar procurement in line with the tariffs of around Rs. 7/kWh realized under the various bidding mechanisms.
Projects commissioned before the mentioned timeline are eligible to avail Vintage Multipliers(VM), the details of the same are as follows.
The proposed order with the rationale behind the new price band is available for download here.
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1 thought on “Solar REC prices proposed to be cut by about 60%; Vintage Multipliers to be introduced”
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Still its not regulated on DISCOMs to buy Solar REC mandatorily. This grey area is still unanswered by Regulatory….
YOGESH BIRLA
Director
Birla Wealth & Project Management Co.