India’s Central Electricity Regulatory Commission (CERC) has crafted new rules for trading of renewable energy certificates (REC) in an attempt to reward clean energy producers and encourage investments in the renewable energy sector.

The RECs can be purchased by companies to meet the statutory obligations to purchase a minimum level of renewable energy, the government said in a statement.

The rule aims to address the mismatch in availability of renewable energy sources and requirement of the obligated entities to meet their renewable purchase obligation, reports Reuters.

According to the draft rules, the clean energy producers can either sell their electricity at a preferential tariff fixed by provincial power regulators or sell the generated electricity and environmental attributes associated with renewable power separately.

Each certificate would be equivalent to one megawatt hour (MWh) of electricity. All renewable energy distributors will be able to buy the certificates.