Through the National Action Plan for Climate Change (NAPCC) Govt. of India has reinforced its commitment to a sustainable future for the country through multi-pronged actions ranging from energy efficiency to forest conservation to greater share of energy from renewable sources. In pursuance of this, the Govt. of India has included Renewable Purchase Obligations (RPO) as a part of its tariff policy for the electricity sector. The State Electricity Regulatory Commissions have to set the RPO for their respective states, out of which minimum of 0.25% of total purchased energy has to be in form of solar energy upto 2013 and this should further increase to 3% by 2022. Under these rules, distribution companies, open access consumers and captive consumers are obligated to buy the stipulated percentage of their power from solar/ other renewable sources of energy. Various states have come out with their Solar Power Policy to encourage private developers to set up projects. Solar feed-in tariffs have been defined and the required regulations have been put in place for purchase of solar power.

Renewable Energy Certificate (REC) a market mechanism has been developed to enable the trading of the green component of renewable energy. The REC market has grown at a good rate and is expected to develop further.

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