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Indian wind developers get the short end of the stick form defaulting Indian utilities

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Wind vs Solar (India)

The solar sector in India has got a strong policy push from the central government leading to an exponential growth and even the target for solar power by 2022 is more than 60% higher than wind power, though wind is a much more mature technology with an established manufacturing and generation ecosystem in the country.

Also read about various solar subsidies in India here.

This has created a lot of angst amongst wind industry stakeholders, as they feel that solar is seeing favouritism by state and central governments both in terms of policy and regulations. While both wind and solar power have “must run” status, state governments are curtailing wind power much more than solar power.


The Indian distribution utilities are mostly in a bad financial shape and delaying payments is an accepted norm. However, some states are delaying payments to wind power developers for more than a year, which is resulting in cash flow distress for these developers. It is also causing anxiety amongst lenders which in general bear 70-80% of the project costs as the share of debt is high in these capital intensive wind projects, costing nearly INR $1 million/ MW to build in India.

Maharashtra has been the chief culprit as it has left more than 500 MW of wind power capacity in the state to be stranded, because it has not signed a PPA with the companies. While wind developers are crying foul, discoms are also complaining that they do not want to pay high feed in tariffs to these wind power plants given that solar power is much cheaper and discovered more transparently in reverse auctions.

In contrast wind industry has much lower competition as large wind turbine manufacturers and developers make good profits, thanks to high fixed feed in tariffs given by state governments. This decreases the incentives of these companies to diminish costs and prices. As a result, while wind power costs have increased in the last 2-3 years, solar power costs have declined by almost 40% in the last one and half years.

While the central ministry is pushing these utilities to make payments to the wind developers on time, the wind industry also needs to decrease prices and costs if it wants to remain competitive to solar energy which has been seeing a sharp decline in prices. Given that wind and solar are mostly substitutable, wind power may see obsolescence unless it reforms fast.

According to data shared by the Wind Independent Power Producers Association (Wippa), Maharashtra owes more than $181 million, Rajasthan $135 million, and Madhya Pradesh $73 million. With these three states accounting for around 11GW of wind capacity (nearly 40% of India’s total), the impact of the delayed payments is being felt across the industry. Rajasthan has been behind schedule in making payments to all power producers because of its financial difficulties. Madhya Pradesh and Maharashtra, although also cash strapped, appear to be delaying payments to wind power producers. The discrimination is most apparent in Maharashtra, where, in addition to the delay in payments, the utility has not signed power purchase agreements for nearly 560MW of new ready-to-commission capacity since early this year, effectively stranding investments worth $600 million.




Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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