Commercialization efforts to diffuse sustainable energy technologies (SETs) need to be sustainable in terms of replication, spread and longevity, and should promote goal of sustainable development. Limited success of diffusion through government driven pathways illustrates the need for market-based approaches to SET commercialization. This paper presents a detailed treatment of the pre-requisites 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 intermediary mechanisms. Further, it envisages a public-private partnership driven-mechanism as a framework for diffusion leading to technology commercialization.