Rajasthan Regulator Upholds RPO Obligations For Captive Solar Plants Above 1 MW

The Rajasthan Electricity Regulatory Commission (RERC) has dismissed petitions filed by industrial consumers Sudiva Spinners Pvt. Ltd. and RSWM Ltd., confirming that captive power producers operating renewable energy plants of 1 MW and above will continue to remain obligated entities under the state’s Renewable Purchase Obligation (RPO) framework.

The common order was issued by the RERC bench comprising Chairman Dr. Rajesh Sharma and Members Hemant Kumar Jain and Vijay Pal Singh while disposing of Petition Nos. RERC/2288/2025 and RERC/2289/2025. The petitions were filed under Regulation 6 of the RERC (Renewable Purchase Obligation) Regulations, 2023, which allows the Commission to address operational difficulties in implementing regulations.

The petitioners had sought clarification that renewable energy generated and consumed through behind-the-meter captive solar plants should not be considered for RPO obligations. Sudiva Spinners operates a 14.984 MW captive solar power plant, while RSWM Ltd. has captive solar installations of more than 1 MW capacity across six manufacturing locations.

Both companies argued that imposing RPO obligations on self-consumed renewable energy defeats the purpose of promoting clean energy adoption. They stated that solar power generated and used within their facilities already contributes to decarbonisation efforts and should not attract additional compliance requirements. The companies also pointed out that some other states have adopted frameworks where RPO obligations are primarily linked to fossil fuel-based electricity consumption.

The petitioners further highlighted that international carbon credit verifiers were not recognizing their onsite renewable energy generation due to the absence of a clear regulatory interpretation regarding behind-the-meter renewable energy and RPO compliance.

However, Rajasthan Renewable Energy Corporation Ltd. (RRECL), along with state distribution companies, opposed the petitions and maintained that the existing regulations clearly classify captive power plants with a capacity of 1 MW or more as obligated entities. They argued that self-consumed renewable energy is not being penalized under the RPO mechanism. Instead, such renewable generation directly helps entities meet their prescribed RPO targets.

RRECL and the distribution companies also stated that Regulation 6 cannot be used to provide exemptions or modify the basic provisions of the RPO regulations. They emphasized that renewable energy attributes cannot be claimed twice. According to the respondents, electricity units used for RPO compliance cannot simultaneously be used for claiming renewable energy certificates (RECs), international renewable energy certificates (I-RECs), or carbon credits.

While examining the matter, the Commission clarified that RPO is a consumption-based obligation and not a penalty on renewable energy producers. The objective of RPO regulations is to ensure that obligated entities consume a certain share of electricity from renewable sources.

The Commission noted that when a captive consumer generates and consumes solar power within its premises, that renewable energy automatically contributes toward fulfilling its RPO requirement. Therefore, no additional procurement is required for the portion of renewable energy already generated and consumed internally.

The regulator concluded that there was no operational difficulty requiring intervention under Regulation 6 of the 2023 regulations. It upheld that both Sudiva Spinners and RSWM Ltd. remain obligated entities, and their self-consumed captive solar generation will continue to be counted toward meeting their RPO targets. The order also reaffirmed the principle that environmental benefits from renewable energy cannot be double-counted across multiple compliance mechanisms.