Five key policy decisions by CERC for solar projects
The Central Electricity Regulatory Commission (CERC) is the statutory body responsible for regulating the power sector in India. Over the past decade, the CERC has made several key decisions regarding solar project regulations in the country. In this blog article, we will explore five of these decisions and their impact on the solar industry.
- Implementation of Renewable Purchase Obligations (RPOs)
In 2012, the CERC introduced regulations that mandated distribution companies to purchase a minimum percentage of their total power requirement from renewable energy sources. This regulation is known as the Renewable Purchase Obligation (RPO) and has been a key driver of solar power adoption in the country. The RPOs have increased every year, and the CERC has been instrumental in enforcing compliance, leading to a surge in solar installations in the country.
- Introduction of Net Metering
In 2013, the CERC introduced regulations for net metering, which allowed solar power producers to supply excess power generated by their solar installations back to the grid. This incentivized solar power adoption as producers could sell excess power back to the grid and earn revenue. Net metering has been crucial in promoting the adoption of rooftop solar installations in the country.
- Revision of Tariff Regulations
In 2014, the CERC revised tariff regulations for solar power projects. The new regulations introduced a levelized tariff structure, which accounted for fluctuations in solar power generation over the lifetime of the project. This helped solar power producers to secure long-term financing and improve bankability of their projects.
- Approval of Trading of Renewable Energy Certificates (RECs)
In 2017, the CERC approved trading of Renewable Energy Certificates (RECs), which allowed solar power producers to sell certificates to entities who needed to comply with their RPO obligations. This helped solar power producers to monetize the Renewable Energy Certificates they generated and earn additional revenue.
- Introduction of Real-Time Market for Renewable Energy
In 2020, the CERC introduced real-time markets for renewable energy, allowing for the purchase and sale of renewable energy in real-time. This helped solar power producers to sell excess power generated by their installations and enabled distribution companies to purchase renewable energy at competitive prices.
Table summarizing key decisions by CERC on solar project regulations over the last decade:
| Decision | Year | Description |
|---|---|---|
| Implementation of Renewable Purchase Obligations | 2012 | Mandated distribution companies to purchase a minimum percentage of their total power requirement from renewable energy sources. |
| Introduction of Net Metering | 2013 | Regulations allowed solar power producers to supply excess power generated by their solar installations back to the grid. |
| Revision of Tariff Regulations | 2014 | Introduced a levelized tariff structure to account for fluctuations in solar power generation over the lifetime of the project. |
| Approval of Trading of Renewable Energy Certificates | 2017 | Approved trading of Renewable Energy Certificates (RECs), allowing solar power producers to monetize the RECs they generated and earn additional revenue. |
| Introduction of Real-Time Market for Renewable Energy | 2020 | Introduced real-time markets for renewable energy, allowing for the purchase and sale of renewable energy in real-time. |
The CERC has played a vital role in shaping the solar industry in India. Its decisions have helped drive solar power adoption, promote bankability of solar projects, and enable solar power producers to earn additional revenue. It is crucial for regulatory bodies to continue supporting the growth of the solar industry to ensure a sustainable and environmentally-friendly source of power for the future.