Commercialization efforts to diffuse sustainable energy technologies (SETs ) have so far remained as the biggest challenge in the field of renewable energy. Limited success of diffusion through government–driven pathways urges the need for market–based approaches. This paper reviews the existing state of commercilization of SETs in the backdrop of the basic theory of technology diffusion. The different SETs in India are positioned in the technology diffusion map to reflect their slow state of commercilization. The dynamics of SET market is analysed to identify the issues, barriers and stakeholders in the process of SET commercilization. By upgrading the ‘potential adopters’ to ‘techno-entrepreneurs’, the study presents the mechanisms for adopting a private sector–driven ‘business model’ approach for successful diffusion of SETs. This is expected to integrate the processes of market transformation and entrepreneurship development with innovative regulatory, marketing, financing, incentive and delivery mechanisms leading to SET commercialization.