Hence, renewable energy producers who have opted for the preferential tariff agreement with the distribution licensees are NOT eligible for the REC route. As per the CERC guidelines, a generating company is eligible to apply for registration and issuance of RECs if it meets the following criteria:
1. It has obtained accreditation from the State Agency;
2. It sells the generated electricity either
To the distribution licensee of the area in which the eligible entity is located, at a price not exceeding the pooled cost of power purchase of such distribution licensee or;
To any other licensee or to an open access consumer at a mutually agreed price, or
Through power exchange at a market determined price;
3. All REC based captive power producers shall be eligible for their entire energy generation including self consumption.
Therefore, in the light of above discussion, a solar power producer really has two options for selling the produced power: Either through the preferential tariff agreement or through the REC mechanism that utilizes market forces and feeds the Renewable Purchase Obligations (RPOs).
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