Integration between electricity and renewable energy certificate (REC) markets: Factors influencing the solar and non-solar REC in India

The paper examines the integration between electricity and renewable energy certificate (REC) markets for India. The empirical investigation covers the factors influencing solar and non-solar REC markets, using an autoregressive distributed lag (ARDL) modeling approach. The variables used in this study are the traded volume of solar and non-solar RECs, the traded volume of electricity, wholesale electricity price, and prices of solar and non-solar RECs. The dataset contains monthly time series for the period January 2013eJuly 2020. The ARDL bounds test results show that the variables are cointegrated. The long-run ARDL estimates indicate that the traded volume of solar REC is influenced by the traded volume of electricity (positive effect), wholesale electricity price (negative effect), the traded volume of non-solar REC (positive effect), and price of solar REC (negative effect). However, the traded volume of non-solar REC is influenced by only traded volume (positive effect) and price (positive effect) of solar REC. Based on the findings of this study, few suggestions are discussed to strengthen the REC market in India. (c) 2021 Elsevier Ltd. All rights reserved.