India's commercial and industrial (C&I) renewable energy capacity is expected to reach 57 GW by FY28, from about 40 GW by FY26, a 17 GW increase in two years as corporate decarbonisation and tariff arbitrage boost demand. Crisil Ratings said growth will be supported by favourable long-term power purchase agreement (PPA) tariffs relative to grid tariffs, corporate net-zero commitments, renewable purchase obligations (RPOs) and attractive developer returns. The change reflects rising direct procurement by industry.

The Green Energy Open Access (GEOA) Rules, 2022 have enabled industrial and commercial entities to source renewable power directly over existing transmission and distribution infrastructure, accelerating adoption. Crisil Ratings noted that major industrial states have announced open access policies and are offering rebates on cross-subsidy, wheeling and state transmission utility charges for intra-state supply, lowering the landed cost of power by 25 to 30 per cent versus on-grid tariff. These measures have supported rapid capacity addition.

Energy-intensive sectors such as steel, cement and data centres are leading the shift to meet internal net-zero targets and RPO obligations. Private equity-backed developers are expected to account for much of the incremental capacity because C&I projects offer higher return on equity than utility-scale projects. Crisil Ratings reported that rated C&I portfolios typically have an average PPA tenure of around 15 years providing revenue visibility.

About 65 per cent of rated capacity is tied to counterparties with High Safety credit profiles and the weighted average debt service coverage ratio stands at 1.4 times over the next two fiscals. Infrastructure constraints such as limited intra-state transmission capacity and right-of-way issues remain bottlenecks that can delay project timelines. States also face a trade-off as open access incentives may reduce distribution utilities' revenues from high-paying C&I users.

Any recalibration of incentives could push up landed power costs, though tariffs are likely to remain competitive against grid supply. With India targeting 500 GW of non-fossil capacity by 2030 the C&I segment is positioned as a central pillar for clean energy goals and offers stable returns and cost savings to corporates.