India's Renewable Energy Policy Push: How Central and State Policies Are Making It Easier for C&I Businesses to Switch to Green Power

For a commercial or industrial business considering renewable energy, the most important question is often not whether solar or other renewable power is technically available.

It is:

Does the policy environment actually make switching easier, and economically viable?

The answer is increasingly yes.

Over the past few years, India has built a policy framework that addresses different parts of the renewable-energy equation.

Some policies make it easier for consumers to access renewable electricity.

Others create a reason for large consumers to consume more renewable power.

Some reduce the infrastructure and transaction barriers around renewable generation.

State policies then determine how much of that national framework actually translates into a commercially attractive project in a particular location.

And the next phase may extend the renewable transition even further into India's agricultural economy, with the government preparing a revamped PM-KUSUM 2.0, including a proposed dedicated Agri-PV component.

For C&I businesses, understanding this policy stack matters because renewable procurement is not happening in a policy vacuum.

The rules are increasingly moving in the same direction:

more renewable generation, more renewable consumption, more open access, more distributed generation and greater integration between consumers and clean-power producers.

The first big shift: renewable energy is no longer only a generation story

India's renewable-energy policy was initially focused heavily on building renewable generation capacity.

That remains important.

But the policy conversation has increasingly moved from:

"How do we build more renewable power?"

to:

"How do we make sure consumers can actually use more of it?"

That distinction matters enormously for C&I businesses.

A solar plant can be built hundreds of kilometres away from a factory.

The real challenge is creating the regulatory, transmission and commercial mechanisms that allow the factory to procure that renewable electricity.

This is where policies around Green Open Access, renewable obligations, captive consumption, transmission infrastructure and state-level regulations become important.

1. The Electricity Act, 2003: the foundation for open access

At the centre of India's electricity-market framework is the Electricity Act, 2003.

One of the important principles established by the Act is open access, the ability of eligible consumers to procure electricity from a source other than their local distribution company, subject to the applicable regulatory framework.

For C&I consumers, this created the legal foundation for an electricity market where a business does not necessarily have to rely exclusively on its local DISCOM for every unit of power it consumes.

That distinction became increasingly important as renewable generation became cheaper and more widely available.

But having a legal right to access power is not enough.

The process needs to be usable.

That is where the next major policy intervention came in.

2. Green Open Access Rules, 2022: opening the door to more C&I consumers

The Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules, 2022 were one of the most important policy developments for India's C&I renewable market.

The Ministry of Power notified the rules in June 2022 with the stated objective of accelerating renewable-energy adoption and facilitating access to affordable, reliable and sustainable green energy.

One of the most significant changes was the reduction of the minimum eligible load for green open access from 1 MW to 100 kW.

That dramatically broadened the potential consumer base.

Previously, many mid-sized businesses could effectively look at renewable open access and conclude:

"This isn't for companies our size."

The 2022 framework changed that.

A much larger group of commercial and industrial consumers could now explore renewable procurement through open access, subject to the applicable state-level implementation.

This matters because India's C&I market is not made up only of enormous factories.

It includes:

• Manufacturing units
• Warehouses
• Data centres
• Hotels
• Hospitals
• Shopping centres
• Office campuses
• Educational institutions
• Cold-storage facilities
• Logistics companies
• Food-processing plants
• Commercial buildings
• MSMEs with significant electricity demand

A 100 kW threshold brings many more of these businesses into the conversation.

3. Green energy supply through DISCOMs is also part of the framework

Green Open Access is not the only mechanism created by the 2022 rules.

The framework also provides for green-energy supply by distribution companies, with a green tariff determined by the appropriate electricity regulatory commission.

The Ministry of Power subsequently clarified the methodology for green tariffs, stating that the tariff should comprise elements including the average pooled power purchase cost of renewable energy, applicable cross-subsidy charges and service charges, with a ceiling intended to prevent the green tariff from becoming excessively expensive.

For businesses, this creates another potential route toward renewable electricity:

buying green power through the DISCOM itself.

However, the economics and structure can differ substantially from procuring renewable power directly from a generator through open access.

That is why C&I consumers should compare the available routes rather than assuming there is only one way to go renewable.

4. Renewable consumption obligations: the policy is moving from encouragement to obligation

The second major pillar is the renewable-consumption framework.

India has progressively strengthened renewable procurement requirements for obligated entities.

The policy direction is important for C&I businesses because renewable energy is increasingly becoming more than a voluntary sustainability initiative.

For designated consumers and other obligated entities, renewable consumption requirements can create a direct compliance reason to increase renewable sourcing.

The broader framework is intended to push renewable consumption upward over time.

This creates an interesting dynamic.

Historically, a CFO could ask:

"Why should we switch from grid electricity to renewable electricity?"

Increasingly, the question becomes:

"How much renewable electricity do we need, and what is the most economical way to procure it?"

That is a fundamentally different procurement decision.

5. The RCO changes the C&I conversation

The Renewable Consumption Obligation (RCO) is particularly relevant to large consumers.

The policy framework requires designated consumers and other covered entities to meet specified renewable-consumption requirements.

The trajectory increases over time, making renewable procurement increasingly relevant to businesses that fall within the applicable framework.

For these companies, renewable power can serve two purposes simultaneously:

It can reduce electricity costs.

And:

It can help meet renewable-consumption obligations.

That combination makes renewable procurement significantly more attractive.

A business that can lower its electricity cost while simultaneously satisfying a regulatory requirement is dealing with a much stronger economic case than a business that is buying renewable power purely for branding or ESG reasons.

6. Captive and group-captive models create another route

India's policy framework also supports renewable generation through captive and group-captive structures.

These models are particularly relevant to C&I consumers because they can allow businesses to participate in renewable projects while accessing the electricity generated by those projects.

In a group-captive model, multiple consumers can participate in ownership of a renewable project and consume electricity under the applicable captive framework.

The structure can be commercially attractive because of the treatment of certain open-access charges when the applicable captive conditions are satisfied.

But captive structures come with their own requirements.

Ownership percentages, consumption requirements, project structure, compliance and ongoing governance all matter.

So captive and group captive should not be viewed simply as a way to get a cheaper tariff.

They are a different procurement architecture.

7. Transmission policy is another hidden enabler

A renewable project does not need to be located next to the electricity consumer.

That is one of the biggest advantages of India's increasingly interconnected power system.

A solar project can be built where solar resources are strongest and land is available, while electricity can be transported to an industrial or commercial load centre.

Government policy has supported this through measures such as transmission-charge and loss waivers for eligible renewable projects in specified circumstances.

The Ministry of Power has issued provisions relating to waivers of inter-state transmission charges and losses for electricity generated from solar and wind projects as part of the effort to encourage renewable-energy development.

For C&I procurement, transmission policy matters because it directly affects the final cost of renewable electricity.

The cheaper the electricity can move from the renewable project to the consumer, the more competitive open-access renewable power becomes.

8. Green Energy Corridors are solving the infrastructure problem

There is another part of the policy stack that consumers rarely see directly:

the transmission network.

India cannot build hundreds of gigawatts of renewable generation without also building the infrastructure required to move that electricity.

The Green Energy Corridor programme is designed to support exactly this transition.

For example, the Intra-State Green Energy Corridor Phase-II scheme is being implemented across seven states and is intended to facilitate integration of around 20 GW of renewable generation capacity, supported by central financial assistance.

For a C&I buyer, this may sound like an infrastructure issue rather than a consumer issue.

But it matters directly.

More renewable-friendly transmission infrastructure means:

• More renewable projects can connect to the grid.
• Renewable generation can be located more efficiently.
• More renewable power can reach demand centres.
• Grid constraints can be reduced over time.
• The addressable market for renewable procurement can expand.

In other words, transmission policy is part of the foundation underneath the C&I renewable market.

9. The Centre is also supporting renewable manufacturing

Renewable procurement is not only about generation.

India is simultaneously trying to build a domestic clean-energy manufacturing ecosystem.

Policies such as the Production Linked Incentive programme for high-efficiency solar PV modules are intended to increase domestic manufacturing capability and reduce dependence on imports.

The Ministry of New and Renewable Energy also maintains the Approved List of Models and Manufacturers (ALMM) framework for relevant solar projects.

The policy environment around domestic manufacturing has become increasingly important as India tries to build a renewable-energy supply chain that includes modules, cells and other components.

For C&I buyers, the immediate implication is that project developers must pay attention to applicable equipment eligibility and procurement rules when structuring renewable projects.

10. State policy is where the economics become real

This is one of the most important things for a C&I buyer to understand.

India has a national renewable-energy framework.

But electricity is also a state-level business.

That means the commercial attractiveness of renewable procurement can change dramatically depending on where the consumer is located.

The relevant state regulator and authorities determine or influence important parts of the renewable procurement equation, including:

• Open-access procedures
• Wheeling charges
• Banking
• Cross-subsidy surcharge
• Additional surcharge
• Connectivity
• Metering
• Renewable purchase obligations
• Captive and group-captive implementation
• State-specific renewable incentives

This is why there is no single "India solar tariff" for a C&I consumer.

There are effectively dozens of different regulatory environments.

The same generator and the same solar project can produce a very different landed cost depending on the state in which the consumer is located.

11. Gujarat: a major renewable-energy policy ecosystem

Gujarat is one of India's most important renewable-energy and industrial markets.

The state notified its Gujarat Renewable Energy Policy-2023, with a major focus on expanding solar and wind capacity. The Ministry of New and Renewable Energy's state-policy repository lists the policy and its targeted capacity additions.

Gujarat's combination of:

• Large industrial demand
• Strong solar and wind resources
• Extensive renewable generation
• Transmission infrastructure
• Captive and open-access activity

has helped make the state an important market for C&I renewable procurement.

For a Gujarat-based business, the policy question is therefore not simply:

"Is renewable energy supported?"

It is:

"Which combination of state regulations and procurement structures produces the best landed cost for our particular load?"

12. Rajasthan: renewable supply at massive scale

Rajasthan has taken a particularly aggressive approach to renewable-energy development.

The state has both a Rajasthan Renewable Energy Policy, 2023 and a broader Rajasthan Integrated Clean Energy Policy, 2024 listed among its current policy framework.

The state's renewable-energy ecosystem is built around its enormous solar resource and availability of land.

The Rajasthan government highlights a solar-generation potential of around 142 GW and an ambitious renewable-energy expansion programme. Its policy framework includes measures affecting transmission/distribution charges, cross-subsidy surcharge, electricity duty and banking for renewable projects.

This matters to C&I consumers outside Rajasthan as well.

Why?

Because Rajasthan can act as a major source of renewable electricity for consumers located elsewhere, subject to the applicable transmission, open-access and regulatory arrangements.

A C&I buyer therefore does not necessarily need to generate renewable electricity in the same state where it consumes it.

13. Karnataka: a major C&I renewable market

Karnataka has also developed a dedicated Renewable Energy Policy 2022–2027.

The policy targets 10 GW of additional renewable-energy projects, including projects with or without storage, and up to 1 GW of rooftop solar.

For Karnataka's large industrial and commercial base, this creates a substantial environment for renewable-energy development.

The state's importance is particularly relevant to:

• Manufacturing
• Technology companies
• Data centres
• Commercial real estate
• Export-oriented businesses

For these consumers, renewable procurement can combine energy-cost management with sustainability and corporate renewable-energy targets.

14. Haryana: renewable obligations meet a large C&I base

Haryana is particularly relevant to the C&I story because of its concentration of manufacturing, logistics, commercial and industrial demand.

The Haryana Electricity Regulatory Commission's renewable-energy regulations include renewable purchase obligations for obligated entities, including open-access consumers and consumers owning captive power plants. The published trajectory rises through FY 2026–27.

At the same time, Haryana has its own Green Energy Open Access regulatory framework, with amendments and regulatory discussions continuing as the market evolves.

For businesses in Haryana, therefore, renewable procurement sits at the intersection of:

high electricity demand + open access + renewable obligations + state-level regulation.

This is precisely the type of market where structured renewable procurement can become commercially valuable.

15. State policies don't just support solar, they support the renewable ecosystem

It is easy to think of state renewable policies as simply subsidies for solar plants.

They are broader than that.

A state trying to build a renewable ecosystem may provide support through:

• Land policies
• Electricity-duty treatment
• Transmission incentives
• Open-access frameworks
• Banking provisions
• Grid connectivity
• Renewable-energy targets
• Manufacturing incentives
• Project-development support
• Green-energy infrastructure

The objective is to make renewable generation easier to develop and renewable electricity easier to consume.

That distinction matters.

The best C&I renewable market is not necessarily the state offering the biggest headline subsidy.

It is the state where the entire chain works:

Generation → Connectivity → Transmission → Open Access → Delivery → Billing → Consumption

16. PM-KUSUM: bringing distributed renewable generation into the agricultural economy

One of the most interesting parts of India's renewable policy landscape sits outside the traditional C&I market.

That is PM-KUSUM.

The Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan was designed to reduce diesel dependence in agriculture, improve energy security and create additional income opportunities for farmers.

The existing programme has three broad components covering:

• Decentralised grid-connected renewable power plants
• Standalone solar agricultural pumps
• Solarisation of grid-connected agricultural pumps and feeders

Under Component A, renewable-energy plants in the 500 kW to 2 MW range can be developed by individual farmers, groups of farmers, cooperatives, panchayats, Farmer Producer Organisations and other eligible entities.

The national PM-KUSUM portal describes the programme as allowing farmers to install grid-connected solar power plants up to 2 MW on barren or fallow land and sell electricity to the local DISCOM at a tariff determined by the state regulator.

That is significant.

Because it creates a new category of distributed renewable-energy producer.

Instead of renewable generation being concentrated only among large utility-scale developers, agricultural landholders can potentially become renewable generators themselves.

17. What PM-KUSUM means for C&I renewable procurement

At first glance, PM-KUSUM may seem unrelated to commercial and industrial electricity consumers.

It isn't.

The scheme can help expand the supply side of India's renewable-energy market.

Imagine a future where thousands of farmers and landowners can host relatively small renewable projects close to electricity substations.

That creates:

• More distributed generation
• More local renewable supply
• More potential projects
• Greater diversification of the generator base
• Potentially shorter transmission distances
• New opportunities for aggregation

For C&I buyers, more generators can ultimately mean more competition.

And more competition is exactly what a healthy renewable procurement market needs.

18. PM-KUSUM 2.0: the next phase could be particularly interesting

This is where the story gets even more interesting.

The government is preparing a revamped version of PM-KUSUM, commonly being referred to as PM-KUSUM 2.0.

In March 2026, the Ministry of New and Renewable Energy publicly said that the government was preparing PM-KUSUM 2.0 with a dedicated Agri-PV component.

Reporting in March 2026 also indicated that the government was considering incorporating battery energy storage into the revamped programme.

That combination could be important.

Solar + agriculture + storage

could create a very different model of distributed renewable generation.

Instead of treating agricultural land purely as a source of solar generation, Agri-PV can potentially allow agricultural activity and renewable generation to coexist.

Storage could then help address one of solar's fundamental challenges:

generation and consumption do not always happen at the same time.

It is important to distinguish this from the existing PM-KUSUM framework.

PM-KUSUM 2.0 is an upcoming/revamped programme being prepared by the government; its final design, eligibility, incentives and implementation framework should be treated as subject to official notification.

The current PM-KUSUM programme itself has already demonstrated substantial scale. The national portal reports thousands of megawatts sanctioned under Component A and large numbers of solar pumps and solarised agricultural connections under Components B and C.

The direction is clear even before every detail of the next phase is finalised:

India is trying to move renewable generation closer to the point of consumption and broaden who can participate in producing clean electricity.

19. PM-KUSUM could create a new generator class

This may be one of the most interesting long-term implications for the C&I market.

Traditional renewable procurement has often been dominated by relatively large developers.

PM-KUSUM creates the possibility of a much more distributed generator ecosystem.

A farmer with suitable land could potentially become a renewable power producer.

A group of farmers could develop a project.

An FPO could participate.

A local developer could aggregate multiple sites.

A platform could potentially connect these smaller generators with larger commercial and industrial demand.

That is exactly where market infrastructure becomes important.

Because creating more renewable generation is only half the problem.

The other half is efficiently connecting that generation with credible demand.

20. Policy is creating both sides of the market

This is the bigger story behind India's renewable policy framework.

Government policy is simultaneously working on:

The supply side

Build more renewable generation.

Support solar and wind projects.

Expand domestic manufacturing.

Develop transmission.

Encourage distributed generation.

Enable farmers and other participants to become renewable producers.

The demand side

Make green open access easier.

Increase renewable-consumption obligations.

Create green-energy procurement mechanisms.

Support captive and group-captive structures.

Encourage businesses to consume renewable power.

The two sides reinforce each other.

More generators create more supply.

More consumer access creates more demand.

More demand makes new projects easier to finance.

More projects increase competition.

More competition can improve prices.

And better economics encourage more businesses to switch.

That is the renewable-energy flywheel India is building through policy.

21. The policy stack is increasingly aligned with C&I economics

For a C&I business, the most important policy developments can therefore be thought of as five layers.

And the emerging PM-KUSUM 2.0 direction adds another potential layer:

22. But policy support does not mean every renewable project is automatically attractive

This is an important distinction.

A supportive policy environment does not mean every solar PPA is a good deal.

A C&I buyer still needs to evaluate:

• State-specific charges
• Generator credibility
• Project location
• Grid connectivity
• Contract structure
• Tariff
• Escalation
• Generation assumptions
• Banking
• Captive requirements
• Regulatory changes
• Performance guarantees
• Long-term project viability

In fact, as the market grows, this diligence becomes more important.

There will be more generators.

More projects.

More structures.

More tariffs.

More state-specific options.

That creates opportunity, but also choice overload.

23. The next challenge is no longer policy. It is execution.

India has spent years building the policy foundation for renewable growth.

The Green Open Access Rules have expanded the potential consumer base.

Renewable-consumption obligations are increasing the incentive to procure clean power.

States are developing renewable-energy policies and open-access frameworks.

Transmission infrastructure is expanding.

Distributed generation is becoming more important.

And the government is now looking at the next generation of programmes such as PM-KUSUM 2.0.

The question now is increasingly:

Can businesses actually navigate all of this efficiently?

For a CFO or procurement head, the renewable market can involve:

Central policy → State policy → SERC regulations → DISCOM → STU → Generator → PPA → Connectivity → Metering → Billing → Compliance

That is a lot of moving parts for a company whose core business is manufacturing products, running warehouses, operating hotels or serving customers, not managing electricity markets.

What this means for C&I buyers

The policy direction is becoming increasingly clear.

If you are a C&I business in India, there are now several reasons to evaluate renewable procurement.

1. Access is broader

Green Open Access brought the eligibility threshold down to 100 kW under the central framework, subject to applicable rules and implementation.

2. Renewable consumption is becoming more important

RCO and related renewable-consumption frameworks increasingly make clean electricity relevant to compliance.

3. State markets are becoming more sophisticated

States such as Gujarat, Rajasthan, Karnataka and Haryana have developed renewable policies and regulatory frameworks that support renewable development and procurement in different ways.

4. Renewable supply is expanding

India's renewable capacity continues to grow rapidly. MNRE reported cumulative solar capacity of around 162 GW and total renewable capacity excluding large hydro of around 236.5 GW as of June 2026.

5. Distributed generation is getting bigger

PM-KUSUM has already created a significant distributed renewable-energy ecosystem, and the proposed PM-KUSUM 2.0 could expand that model further.

6. The economics are increasingly difficult to ignore

When renewable electricity can be procured below the effective cost of conventional grid power, policy support becomes an accelerator rather than the sole reason to switch.

The policy question every C&I business should now ask

The old question was:

"Does the government support renewable energy?"

That question has largely been answered.

The better question in 2026 is:

"Which combination of central policy, state regulation and renewable procurement structure gives my business the lowest-risk, lowest-cost path to clean power?"

That is a much more useful question.

Because renewable procurement is no longer simply about finding a solar plant.

It is about finding the right combination of:

policy + project + generator + tariff + regulatory structure + contract.

And that combination will be different for a factory in Haryana, a data centre in Karnataka, a manufacturer in Gujarat, a warehouse in Rajasthan or a commercial facility in Maharashtra.

From policy complexity to procurement simplicity

This is also where the role of a marketplace like Wattmatch becomes important.

India can create the policies that allow renewable energy to flow.

It can create renewable-consumption obligations.

It can build transmission.

It can support new generation.

It can bring more farmers and developers into the renewable ecosystem.

But a C&I buyer still needs to answer a practical question:

"Who should we buy from, at what price, under what structure, and with what protections?"

That is the market layer that sits between policy and execution.

Wattmatch is designed to provide that layer.

The platform brings multiple vetted generators into a structured competitive process so that a C&I buyer does not have to discover the market one developer at a time.

Instead of:

Find a generator → negotiate → benchmark → conduct diligence → negotiate again

the model is:

Define demand → invite vetted generators → compare competitive bids → select the best-fit offer → contract → monitor delivery

The policy framework creates the opportunity.

A more efficient market structure can help businesses actually use it.

India's next renewable phase will be about participation

India's first major renewable-energy phase was about building capacity.

The next phase is increasingly about connecting that capacity to consumers.

And the policy architecture is evolving accordingly.

Green Open Access is making renewable procurement accessible to more consumers.

RCO is creating stronger demand.

State policies are shaping local economics.

Transmission programmes are expanding the grid's ability to carry renewable power.

Distributed generation schemes such as PM-KUSUM are creating new sources of renewable supply.

And the proposed PM-KUSUM 2.0, particularly its emerging focus on Agri-PV and potentially storage, could further blur the traditional boundary between agriculture, distributed generation and the power market.

The opportunity for C&I businesses is significant.

Renewable energy is no longer simply something a sustainability team can put on a presentation.

It is becoming an increasingly important part of how Indian businesses procure electricity.

The policy direction is already moving.

The question now is how quickly individual businesses can move with it.

Your renewable-energy strategy should start with your electricity bill, not with a policy document.

Tell Wattmatch about your electricity consumption, location and requirements. We'll help you understand the available renewable procurement options and connect you with vetted generators competing for your demand.

Run your business. We'll run your renewables.