India Solar-Credit Demand Sinks as Companies Snub Targets

Indian demand for solar-power credits has dropped 43 percent this month as electricity producers and distributors sidestep clean-energy targets, according to REConnect Energy Solutions Pvt.

Bids for credits, which power companies and industrial consumers need to meet renewable-energy goals, declined to 1,999 in May from 3,522 in April, REConnect said in an e-mail. The Indore-based trader records all the transactions on the Indian Electricity Exchange and the Power Exchange of India.

Trading remains “dry” because authorities are failing to enforce clean-energy targets on state electricity distributors and large power producers, REConnect said.

India, which generates 58 percent of its electricity from coal, requires companies including Tata Power Co. (TPWR) to get as much as 10 percent of their energy from renewables. Those unable to source enough locally may meet targets by buying credits from wind, solar, hydro and biomass plants via the two exchanges.

The decline in demand has pushed the price of credits to as low as 10,990 rupees ($196) apiece, according to REConnect. Each credit represents 1 megawatt-hour of electricity fed into the power grid.

To contact the reporter on this story: Natalie Obiko Pearson in Mumbai at npearson7@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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