India Cuts Floor Price for Solar-Energy Credits to Boost Demand

India cut the floor price for solar energy credits to revive demand as companies try to meet their year-end obligations for energy produced from renewable sources.

Each solar-credit certificate will have a floor price of 3,500 rupees ($55), according to an order by the government’s Central Electricity Regulatory Commission. The maximum price will be 5,800 rupees. The prices of non-solar renewables certificates remain unchanged.

The demand for solar energy certificates hasn’t picked up even as the fiscal year-end approaches on March 31, said Vishal Pandya, director, REConnect Energy Solutions Pvt.

The government requires state-run electricity distributors and large industrial companies to get as much as 10 percent of their energy from renewables. Companies not able to meet their obligations must purchase electricity from clean-power plants sold over power exchanges in monthly trading sessions. Solar credits are traded separately.

Companies have time till March 31 to buy credits. Each credit represents 1 megawatt-hour of electricity fed into the grid.

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