India’s Renewable Energy Policy: What Every Corporate Buyer Should Know

India’s Renewable Energy Policy: What Every Corporate Buyer Should Know

India has set the most ambitious target of achieving net Zero by 2050 and renewable energy transition and corporate buyers are at the heart of this transformation. C&I segment (industrial + commercial) represents about 40-45% of India’s total energy demand which consist of large manufacturer, data centre, or service-sector enterprise.

Transitioning to renewable energy is not only the compliance or sustainability need; it’s now a business imperative. Understanding the energy policy landscape and regulatory frameworks is essential for every corporate buyer to unlock the most advantageous renewable energy opportunities.

Present Status of Renewable Energy in India

As of November 2025, India’s total renewable energy capacity has reached ~254 GW, marking significant growth in the country’s commitment to clean energy.

This shift is powered by falling renewable energy (RE) costs, better grid integration, and strong policy support. For corporates, this means more procurement choices, competitive pricing, and an enabling regulatory environment.

Imperative Policy Framework

India’s renewable energy landscape is anchored by a set of evolving laws and rules that directly impact corporate consumers:

These frameworks collectively aim to make renewable energy easier to access, trade, and integrate into corporate supply chains.

Renewable Consumption Obligation (RCO)

Replacing the earlier Renewable Purchase Obligation (RPO), the Renewable Consumption Obligation (RCO) mandates certain consumers—including open-access users and captive power plants— to meet a specified share of their electricity consumption from renewable sources.

Corporate buyers can comply through:

• Purchasing renewable power directly through PPAs or captive projects,
• Opting for green tariffs from their DISCOM, or
• Buying Renewable Energy Certificates (RECs) in the market.(RECs)

This shift signals a move from voluntary sustainability to mandatory clean energy consumption.

Green Open Access: A Transformative Shift for Corporates

The Green Energy Open Access Rules (2022) have significantly democratised renewable energy access for corporate consumers by:

• Reducing the open-access threshold from 1 MW to 100 kW
• Introducing a single-window online approval mechanism
• Capping approval timelines at 15 days
• Guarantee non-discriminatory access to the grid for RE projects
• Provide Banking mechanism for usage of energy from generation hours to non-generation hours

This means that even medium-sized industrial and commercial consumers can now source renewable energy directly from generators — not just the largest players.

However, state-level regulations on charges and banking still vary widely, making due diligence critical before signing long-term contracts.

Procurement Method/Models for Corporate Buyers

The right choice depends on load size, state regulations, risk appetite, and ESG strategy.

Incentives and Enablers

Corporate renewable procurement is further encouraged through several incentives:

• 100% FDI permitted in renewables under the automatic route
• Waiver of ISTS charges for projects commissioned before FY 2030
• 40% accelerated depreciation benefits for captive projects
• PLI schemes for solar modules, batteries, and green hydrogen
• Access to green finance, including sustainability-linked loans and green bonds

Together, these measures enhance project economics and de-risk long-term investments.

Key Challenges

While India’s RE policy environment is largely positive, corporates should remain alert to:

• Non-uniform open-access rules across states due to con current nature of Electricity regulation
• High cross-subsidy and additional surcharges
• Limited or changing banking provisions
• Grid bottlenecks and land acquisition hurdles
• Mid-contract policy revisions affecting returns
• Exit options available in the adopted model

A Quick Readiness Checklist

• Assess RCO / RPO applicability
• Map open-access or captive feasibility (state-wise)
• Align internal ESG and compliance goals
• Evaluate long-term tariff stability and exit options
• Consider hybrid or RTC power structures for reliability
• Stay updated on REC/REC and carbon credit opportunities

Conclusion

India’s clean energy journey is entering a decisive phase, with corporate engagement central to meeting national ambitions. The policy ecosystem now encourages enterprises to become proactive agents of change — advancing renewable deployment through innovation, investment, and collaboration.

For corporate buyers, the imperative has shifted from adoption to leadership in steering India’s energy transition.