Solar developers in search of light under REC scheme

After one year of completion of REC mechanism solar developers are still looking for some ray of light to benefit from the scheme. Only one solar project got accredited till date. The project is of Jain Irrigation, has a capacity of 8.5 MW and is located in Maharashtra.
Even though the price of solar RECs is very high, solar developers are still looking for something which will drag them into it. Common concerns are like extension of control period and strict enforcement of obligations which would allow investors to finance solar projects.
In a recent article on the hindu business line Mr Pashupathy Gopalan, Managing Director, SunEdison says “Price risk emanates from the fact that floor and forbearance prices are fixed only for the next control period of five years, while the life of a solar plant can be 35-40 years,”.
Adding to it Mr Inderpreet Wadhwa, CEO, Azure Power says: “RECs for solar carry a lot of additionality , almost over 80 per cent of the revenue to come from REC. Currently, there is limited visibility in the tenure for the floor price of RECs – limited to just about five years.
SunEdison also wants allotment of higher number of RECs to old projects in order to compensate for the higher capital cost, (against the backdrop of falling solar plant equipment prices) .
Also, “allowing banking of RECs for few years to mitigate the liquidity risk,” says Mr Gopalan.
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