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The Guptas are among the hundreds of small investors across the country, who wished to seize solar energy as a new business opportunity, including corporate houses, with ambitions of diversifying into the energy business.
REC is a market-based instrument which was introduced in 2012 to help states meet their obligations to purchase renewable energy by buying RECs from sellers on energy exchanges, IEX and PXIL.
Meanwhile, Lohia Group and Bikaji Foods are among known companies, which have shelved their solar plans due to problems with their current installations under REC mechanism.
India is running in the top solar power user in the world.
We are aware that we need to do something to protect investors, like having a support scheme," a senior official from ministry of new and renewable energy told ET.
“The main structural flaw has been the solar REC pricing, which makes the certificate more expensive than solar power itself.But what about local investors, trying to be part of make in India?” said Jitesh Khanna, a businessman with a solar plant of half a megawatt built from his own savings of Rs 3 crore.Now people, as well as government, are working towards making India pollution free. So if you are the one who wants to invest in this sector, can get to know how to start solar energy business in India.After seeing the tremendous growth in the solar energy sector, investors and entrepreneurs can very well see the opportunities in it.The purchase of solar RECs by the states was supposed to generate a substantial part of revenues for investors, something that drew a whole bunch of non-resident Indians and small entrepreneurs into this business.However, states’ reluctance to meet their renewable energy purchasing obligations has led to an oversupply of these tradable certificates, which have no demand.Small entrepreneurs, who have burnt their fingers and funds under the REC mechanism, say they thought another lucrative field of business had opened up."We thought solar was another line for start-ups and small entrepreneurs. Big companies and foreign investors will come and bid for big projects.So far 500 MW, which is about a sixth of India’s total capacity, is commissioned under the REC mechanism, according to Bridge To India.On Monday, the energy regulator CERC proposed to revise the price of solar RECs downwards to Rs 3,500-5,800 per megawatt (MW) from Rs 9,300-13,400 per megawatt to “address the mismatch” between prevailing REC rate and solar energy prices, which have fallen over the past two years.