Commercial & Industrial Renewable Capacity To Reach 57 GW By FY28: Crisil Ratings

(MENAFN- KNN India) New Delhi, Feb 27 (KNN) India's commercial and industrial (C&I) renewable energy capacity is projected to increase to 57 GW by FY28 from around 40 GW expected by FY26, adding 17 GW in two years, according to Crisil Ratings.

The growth is being driven by corporate decarbonisation goals and tariff advantages over grid power.

Crisil said expansion will be supported by competitive long-term power purchase agreement (PPA) tariffs, corporate net-zero commitments, renewable purchase obligations (RPOs), attractive developer returns and strong counterparty credit profiles.

Policy Push and Cost Advantage

The C&I segment, India's largest electricity-consuming block, has gained momentum following the Green Energy Open Access (GEOA) Rules, 2022, which allow industrial and commercial users to source renewable power through existing transmission networks.

Gautam Shahi, Director, Crisil Ratings, said,“Following the GEOA rules, major industrial states have announced policies for open access to fast-track renewable adoption and attract investments,” said Gautam Shahi, Director, Crisil Ratings.

“States are offering rebates on cross-subsidy, wheeling and state transmission utility charges if power is sourced intra-state. Such incentives lower the landed cost of power by 25-30 per cent compared with on-grid tariff, driving capacity addition,” he added.

Strong Credit Profiles, Emerging Risks

Private equity-backed developers are expected to drive most new capacity, given higher returns compared with utility-scale projects. Dushyant Chauhan, Associate Director, Crisil Ratings, noted,“The credit profile of our C&I portfolio is strong, with attractive tariffs and an average PPA tenure of around 15 years, providing stable revenue visibility.”

Chauhan further said,“About 65 per cent of rated capacity is tied to counterparties with High Safety credit profiles, and weighted average debt service coverage ratio stands at 1.4 times over the next two fiscals.”

However, limited intra-state transmission capacity, right-of-way challenges and potential policy recalibration remain risks. Open access incentives may affect distribution utilities' revenues, and any revision could increase landed costs, though renewable tariffs are expected to remain competitive.

With India targeting 500 GW of non-fossil fuel capacity by 2030, the C&I segment is emerging as a key contributor to clean energy goals while offering stable returns to developers and savings to corporates.

(KNN Bureau)

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