What is a Renewable Energy Certificate?

When a solar or wind plant produces electricity, two things are created: the electricity itself, which mixes with all other power in the grid, and the fact that it came from a renewable source. A REC separates that second part and turns it into a certificate that can be sold on its own.

Under the Central Electricity Regulatory Commission (Terms and Conditions for Renewable Energy Certificates for Renewable Energy Generation) Regulations, 2022, each certificate represents one megawatt hour of renewable electricity generated and injected into the grid, or deemed injected in the case of an eligible captive plant's own use (CERC REC Regulations, 2022, Regulation 12). A certificate multiplier can apply for some technologies (see below).

Buyers use RECs to:

• meet a renewable purchase obligation (RPO) set by a State Commission, or the newer renewable consumption obligation (RCO) under the Energy Conservation Act for designated consumers;
• support a voluntary claim that some of their electricity use is renewable.