Government of India implemented the RPO policy and REC mechanism for the development of Renewable in India. Ultimately this lead to exploitation of the Renewables resources and enabled other states to use RECs to fulfil their RPOs. The trading trend of Solar REC is making the Solar PV PP a more viable and attractive option than FIT based and competitive bidding based solar PV PPs.
At present total 444 number of wind projects are registered for RECs with total capacity of 1738.43 MW of the capacity whereas that of the Solar PV Project only 7 numbers of Solar PV Projects are registered with overall capacity of 18.16 MW (Total numbers of REC Projects registered 577 with capacity of 3055.908 MW). Present market condition shows that the market clearing price of the Solar RECs is almost near to forbearance price that is of INR 12.85 per unit whereas of all other RECs it is only INR 1.5 per unit. For every one bid of sale for Solar REC there is availability of more than 5 bids for buying whereas for Non Solar RECs the case is different. This can be seen from the below mentioned table (source IEX).
Even it is expected that this scenario will sustain for a long time as Solar REC market is a highly niche state. This will help the present REC Project owners to exploit their investment.
The RECs of the all other available Renewable sources are in surplus at the exchange. Less demand and high supply of the Non Solar RECs reduced its clearing price. This is due to increase in the generation by renewable energy sources for fulfilling their RPO of utilities. The purchase of the RECs is majorly done by private entities only, so regulatory should come up with some strict action and regulation for purchase of RECs by utilities as well.