Distributed Renewable Energy Certificates (D-RECs), a type of impact label, are emerging as a mechanism to help DRE developers access climate finance and connect with organisations aiming to meet renewable energy targets. However, there is limited evidence on the processes, uptake, and challenges associated with D-RECs.

This study identifies the challenges and opportunities related to this mechanism in India. It presents perspectives from various stakeholders, such as developers, intermediaries, and corporate buyers.

Our findings suggest that although D-RECs are sold at a premium price compared to alternatives such as some voluntary energy certificates, they typically account for only 3 to 15 percent of project revenue. Ground-level challenges persist due to data-monitoring issues, lack of price transparency, and developers’ limited negotiation power. Moreover, community participation in and engagement with the D-REC mechanism is limited despite their recognition of the benefits associated with D-RECs.