The short version.

• One Renewable Energy Certificate represents 1 MWh of renewable generation, issued by NLDC/Grid-India and bought by obligated entities to meet their Renewable Purchase Obligation without physically sourcing green power.
• REC prices have moved from ₹2,300 (early 2022) to ₹115 (August 2024) to roughly ₹380 (mid-2026) — a real, sourced, twenty-fold range, not a stable carbon-price analogue.
• CERC removed the administratively-fixed floor and ceiling price in May 2022, making the market fully price-discovered — and the volatility above happened almost entirely inside that unbanded regime.
• India now runs six operating certificate-based compliance markets (REC, and EPR certificates for used oil, plastic/battery, e-waste, and tyres, plus RBI's Priority Sector Lending Certificates), with a domestic carbon credit market (CCTS) expected to start compliance trading by October 2026 and the older PAT/ESCert scheme winding down into it.
• The 2022 merger of Solar and Non-Solar REC categories is confirmed directly against CERC's own regulation text — replaced by a single Certificate type with a technology-based multiplier. A real APTEL ruling on RPO enforcement (2015) also exists, but it addresses the underlying obligation, not the certificate-trading mechanism itself — the distinction matters and is kept precise below.

What a REC actually represents, and why it exists

India requires DISCOMs and large open-access or captive electricity consumers to source a rising share of their power from renewables — the Renewable Purchase Obligation, set state by state. A Renewable Energy Certificate is the instrument that lets an obligated entity meet that requirement without necessarily buying the renewable electron itself: a generator sells its power into the grid at the ordinary tariff, then separately sells the "renewable-ness" of that generation as a certificate. One REC equals one megawatt-hour of renewable generation, issued and tracked by the National Load Despatch Centre under Grid-India (formerly POSOCO), which serves as the Central Agency for issuance, accreditation, registration and redemption. A certificate is valid for roughly three years from issuance and is extinguished on a first-in-first-out basis once used to meet an obligation.

Where it trades, and the price band that used to exist

RECs trade on two CERC-approved power exchanges — the Indian Energy Exchange (IEX) and Power Exchange India Limited (PXIL) — in sessions that moved from monthly to twice-monthly. Until 2022, CERC set both a floor price and a forbearance (ceiling) price administratively; an earlier partial step had already zeroed the floor and capped the ceiling near ₹1,000. The REC Regulations, 2022, notified 9 May 2022, removed both bands entirely, on the stated rationale that the market had matured enough to be fully price-discovered.

The volatility the price band used to hide

Once the ceiling came off, the price did not settle — it went looking for a level and has not stopped moving.

Compiled from separate IEX session reports and Mercom India/SolarQuarter trade-press coverage of individual trading dates, since no single consolidated CERC or IEX time-series publication covering this full period was found — treat each individual data point as press-reported (moderate confidence) and the overall trend (a real, order-of-magnitude swing) as the reliable takeaway. Prices from December 2022 onward are for the single, unified REC — not a "non-solar" category specifically, since that distinction no longer exists (see below).

What the floor was actually hiding

There is a reading of this swing that runs the other way from "a market gone wrong": Friedrich Hayek's 1945 argument in The Use of Knowledge in Society is that a price is not just a number attached to a transaction — it is the mechanism by which scattered, local information (how much renewable capacity actually exists, how badly obligated entities actually need certificates this quarter, how compliance deadlines are actually landing) gets aggregated into a single, visible signal, without any central body having to collect and process all of that information itself. CERC's price band, in place from the REC mechanism's 2010 launch until its removal in May 2022, fixed both a floor and a ceiling on that signal. For as long as the floor bound, the REC price wasn't reporting the market's actual supply-demand balance; it was reporting the floor. The ₹115 all-time low in August 2024 and the swing back to roughly ₹380 by mid-2026 look extreme next to the old banded prices, but on this reading they are the first genuinely unfiltered readings the REC market has produced in its history — the oversupply this article discusses below may well have existed for years before 2022, just invisible, because the floor was never allowed to fall far enough to reveal it.

This is an interpretive lens on the mechanism, not a claim that CERC intended the band as an information suppressor; price bands are also a standard, defensible tool for protecting investors' financing assumptions in a young market, which is the reason CERC gave for imposing one in the first place.

The older oversupply story, and what is and is not confirmed today

REC oversupply is not a new complaint. In 2015, reporting citing REC Registry data put roughly 96 lakh RECs available for trade against only about 30.6 lakh actually traded in a comparable window, leaving an estimated 1.22 crore (12.2 million) unsold certificates in inventory at the time. No equivalently precise current-year unsold-inventory figure was found for 2023-2026 in the course of this research. The August 2024 all-time-low price and the July 2026 volume decline (down 56.3% year-on-year) are both consistent with continued oversupply or demand mismatch, but that is an inference from price and volume behaviour, not a confirmed current inventory number, and this article is not presenting it as one.

The solar/non-solar merger, confirmed directly against the regulation text

An earlier version of this research could not confirm whether CERC had actually merged the Solar and Non-Solar REC categories in 2022, because the available secondary sources disagreed. Reading CERC's own notification (No. RA-14026(11)/1/2022-CERC, dated 9 May 2022) directly settles it: the merger happened. Regulation 12, “Denomination of Certificate,” defines a single, undifferentiated “Certificate” — there is no separate Solar or Non-Solar certificate type anywhere in the 2022 text. In its place, Regulation 12(2) introduces a Certificate Multiplier, assigning a different certificate yield per megawatt-hour by technology:

Solar sits inside the "On-shore Wind and Solar" bucket at multiplier 1 — the lowest tier, alongside wind, rather than as its own category. The multiplier assigned to a generating station is locked in for 15 years from commissioning. The repeal clause, Regulation 19(2)(b), explicitly confirms what it is replacing: certificates issued under the old 2010 regulations remain valid "except the Non-Solar Certificates issued prior to 1.4.2017" — direct textual proof that the pre-2022 regime did run separate Solar and Non-Solar categories, which the 2022 regulations then dispensed with in favour of the single Certificate-plus-Multiplier system described above.

A real Appellate Tribunal for Electricity (APTEL) ruling does exist here — but it is worth being precise about what it actually addresses, because it is not what the REC-market volatility story above is about. On 20 April 2015, in O.P. No. 1 of 2013, APTEL issued directions under Section 121 of the Electricity Act, 2003 to all State Electricity Regulatory Commissions, mandating strict monitoring and enforcement of Renewable Purchase Obligation compliance and cautioning commissions against diluting the statutory requirement. That ruling is about RPO enforcement — the underlying obligation RECs exist to help satisfy — not about the REC certificate-trading mechanism, its pricing, or the Certificate Multiplier system discussed above. This article could not retrieve APTEL's original order PDF directly (the tribunal's own site returned access errors during this research, the same class of problem this research repeatedly hit with Indian government portals), so the ruling is corroborated here across multiple independent legal-citation sources that reference it as precedent, rather than quoted from the primary document itself — moderate, not full, confidence. Separately, the only recent APTEL matter involving IEX and CERC (disposed February 2026) concerns day-ahead market coupling, an unrelated power-market design question, and should not be conflated with either the 2015 RPO ruling or the REC certificate mechanism.

The other five certificate markets running alongside REC

REC is the oldest of these mechanisms, but it is one of at least six India runs today, with more on the way. Laid out as one MECE set — each row a genuinely distinct instrument, obligated party and trading venue:

Excluded from this list deliberately: the Green Credit Programme (MoEFCC/ICFRE, roughly one credit per surviving tree from plantation activity) issues certificates but they are explicitly non-transferable beyond a single one-time exchange, so it does not function as a tradable compliance instrument in the same sense as the seven above. Compensatory afforestation (CAMPA) is a payment obligation, not a certificate. Electronic Negotiable Warehouse Receipts (eNWR, WDRA-regulated) are a commodity-collateral financing instrument, not a regulatory-compliance-surrender instrument, so they sit outside this MECE set on a different axis entirely.

This article read CERC's own draft trading regulation for CCCs directly — No. RA-14026(13)/1/2024-CERC, the "CERC (Terms and Conditions for Purchase and Sale of Carbon Credit Certificates) Regulations, 2024." It confirms CCTS itself was notified by the Ministry of Power, not BEE or MoEFCC, via gazette notification S.O. 2825(E) dated 28 June 2023; that the Grid Controller of India acts as Registry and the Bureau of Energy Efficiency as Administrator; that trading runs across two segments, a Compliance Market for obligated entities and an Offset Market for non-obligated entities; and that CCCs trade within a floor and forbearance price band set by the Commission on the Bureau's proposal — deliberately similar in structure to the REC price band that existed before 2022. The regulation this article read contains no clause addressing the migration of PAT-scheme ESCerts into CCCs, or any transition timeline for the 9 PAT sectors — it governs only how CCCs trade once issued. To the extent a PAT-to-CCTS migration mechanism exists, it appears to sit in a separate "Detailed Procedure for Compliance Mechanism," which CCTS 2023 assigns to the Bureau to develop under its own Section 12 and which this article did not independently locate or verify.

What ties these together, and what to watch

Every scheme in the table above does the same basic job: it lets a regulator set a target in aggregate (renewable share, waste recycled, lending mix, emissions intensity) and lets individual obligated entities meet it by trading a fungible proof-of-compliance instead of each one hitting the target directly. REC is the oldest and most liquid of these markets, which is exactly why its twenty-fold price swing matters as a cautionary data point for the newer ones: a compliance certificate market can be fully legal, fully regulator-approved, and still swing by an order of magnitude once the price band comes off, especially while the underlying obligated demand and the certified supply are still finding each other.

• Whether CCTS compliance trading actually starts by October 2026 as currently expected, and whether its first prices show anything like REC's early volatility.
• Whether the used-oil EPR certificate market (the newest of the seven) publishes any real price, which would let a direct comparison against this article's own cost-based estimate for that market.
• Whether CERC or NLDC ever publishes the current REC unsold-inventory number, closing the gap this article could not close from 2015-era data alone.
• Whether APTEL's original 20 April 2015 order (O.P. No. 1 of 2013) can be retrieved directly, to move its RPO-enforcement finding from moderate to full confidence.

What would fix this

• Grid-India, as the REC Central Agency, should publish a monthly statement of certificates issued, redeemed and traded, and the closing stock of unsold certificates, so oversupply can be measured directly instead of inferred from a ₹115 low and a 56.3% fall in volume, with the latest precise inventory figure dating from 2015.
• CERC should publish a single downloadable time series of every REC trading session’s clearing price and volume on IEX and PXIL since the May 2022 regulations, so the twenty-fold price swing can be read from one official source rather than stitched together from individual press reports.
• The Bureau of Energy Efficiency should publish the Detailed Procedure for Compliance Mechanism under CCTS, including any rules and timeline for moving the nine PAT sectors and their ESCerts into carbon credit certificates, since CERC’s trading regulation is silent on the migration.
• CPCB should publish monthly transaction prices and volumes for certificates traded on its EPR portals, starting with used oil, plastic, battery, e-waste and tyre waste, so the newer certificate markets can be watched for REC-style volatility from their first trades.

These are proposals from this blog, not recommendations any agency has adopted.

Sources and caveats