Renewable energy sources are Likely to play a significant role in meeting the future energy requirement of a developing country like India. The effect of introducing renewable energy sources on the commercial energy scene may have to be analyzed carefully. In this paper, we present an Optimal Renewable Energy Model that minimizes the cost/efficiency ratio and determines the optimum allocation of different renewable energy sources for various end-uses. The potential of renewable energy sources, energy demand, reliability of renewable energy systems and their acceptance level will determine the pattern of renewable energy distribution and are used as constraints in the model. The model allocates the renewable energy distribution pattern for the year 2020-21 in India, which would be helpful for policy makers in commercializing the renewable energy sources to the greatest extent. The results indicate that solar energy systems can be utilized for lighting, pumping, heating and cooling to an extent of 6%, 16%, 2%, and 12% of total renewable energy demand in India, respectively. Similarly, the bio-energy systems can be utilized 9% of lighting, 18% of cooking, 1% of pumping, 17% of heating, and 14% of transportation of total renewable energy demand. It is also observed that wind energy can be utilized for pumping end-use to an extent of 4% of total renewable energy demand. The scenario for different potential limits is presented in this paper. A sensitivity analysis has been also carried out to validate the model. (C) 2000 Elsevier Science Ltd. All rights reserved.