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For India’s Wind Energy Industry, One Step Forward and Two Steps Backwards

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The Indian wind energy industry was finally seeing some rays of hope with the government reinstating the wind power
subsidies in the form of Generation Based Incentive (GBI), which had been removed for more than a year. With India’s REC market in a coma and transmission problems, the installations had come down. But the recent passage of subsidies has brought some cheer to the industry which hopes to increase its global ranking of becoming the 2nd largest market overtaking the USA. However, that may not work out given an unforeseen problem.

Read about List of Subsidy Schemes for Wind Energy in India.

Crashing Rupee increases Wind woes

The rupee has crashed by 20% against the dollar this year, which will increase the price of imported turbines and components. This will also make the cost of the dollar denominated debt increase. Note for wind and solar energy installations, the capital cost accounts for a majority of the cost as there are no fuel costs and maintenance is also quite low. Increase in interest costs can have a dramatic effect on project returns with increasing interest cost inversely related to wind farm IRRs.

The bad news for the wind developers might be good news for the domestic wind turbine makers. Their products will become more competitive with foreign imports and in fact the exports may increase with rupee debasement. Suzlon Energy (SUZLON) which is groaning under a huge debt load seems optimistic about increasing its exports. Other players such as Inox would also benefit at least in the domestic market. Cheap imports from Chinese companies such as Dongfang and Ming Yang were threatening the strong indigenous industry with their cheap turbines and even cheap vendor financing.


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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