The Supreme Court has extended the validity of solar and non-solar Renewable Energy Certificates (REC) that were due to expire between April 1, 2017, and March 31, 2018, up to March 31, 2018.
According to the Central Electricity Regulatory Commission (CERC), 3,52,814 solar RECs and 9,13,171 non-solar RECs are expected to expire by March 31, 2018.
The sale of RECs has been declining ever since CERC issued new forbearance and floor prices in March 2017. The forbearance price for solar RECs was fixed at ₹2,400 (~$36.91)/MWh and the floor price was set at ₹1,000 (~$14.96)/MWh. The forbearance price for non-solar RECs was set at ₹3,000 (~$46.14)/MWh and the floor price at ₹1,000 (~$14.962)/MWh.
After the issuance of the new forbearance and floor prices for REC trading, many REC generators filed petitions citing losses due to the exclusion of a vintage multiplier in the new prices. The petitioners first approached the Appellate Tribunal of Electricity (APTEL) to suggest a way to clear the existing REC stock.
While the APTEL agreed to introduce a vintage multiplier, it refused to put a stay on the trading and that prompted the petitioners to approach the Supreme Court. Upon hearing the petition, the Supreme Court put a stay on both REC trading and the new prices introduced by CERC.
Later, in July 2017, the Supreme Court of India issued an order that enabled the trading of non-solar RECs. With obligated entities required to pay the old REC rate of ₹1,500 (~$23.5)/REC, the total number of non-solar RECs sold in August 2017 was 2,89,505, a total that was 42 percent lower than the 4,95,295 non-solar RECs sold in July 2017.
Even now, the trade in solar RECs is still not happening because the Supreme Court has instituted a stay until further judiciary action takes place. This has led to a backlog of unsold RECs.