Renewable purchase obligation
A renewable purchase obligation is a legal requirement that a buyer of electricity, such as a distribution company, take a set share of its power from renewable sources. In India it began under the Electricity Act, 2003, and for many large buyers it now sits inside a wider renewable consumption obligation.
Section 86(1)(e) of the Electricity Act, 2003 lets each State Electricity Regulatory Commission specify a percentage of the total electricity consumed in a distribution licensee's area that must be bought from renewable sources. That is why the required share has differed from state to state.
The Ministry of Power notification S.O. 4421(E) of 27 September 2025, issued under the Energy Conservation Act, 2001, sets a Renewable Consumption Obligation for designated consumers who are distribution licensees, open access consumers and captive users. It says no additional renewable purchase obligation under the Electricity Act applies to them, and that state level targets are subsumed within the new one.
The same notification lets an obligated buyer meet its share by consuming renewable electricity, by holding renewable energy certificates, or by paying a buyout price set by the Central Electricity Regulatory Commission. The year by year targets are in its table, which rises each year up to 2029-30.