Turns out that many wind-energy installers in India might be in it just for the government largesse, rather than to produce power. Wind energy accounts for 6 percent of India’s total installed power capacity yet just 1.6 percent of the country’s power. Sunita Narain, of India’s Centre for Science and Environment (CSE), says “there is an urgent need to reassess the current policies and incentives, so that the business of wind gets serious about generating power, and not just installing wind farms and reaping benefits from fiscal incentives. . . . In the current scheme, which gives an accelerated depreciation benefit of 80 per cent and other tax incentives for installation of the plants, wind energy has become the business of cash-rich investors, who take advantage of tax benefits, and are not serious about generation of power.”

“It is no wonder, says CSE, that hotel companies, spinning mills and even film stars have invested in wind energy.”

As reported by Down to Earth,

Till 1993, the then Union ministry of non-conventional energy sources (mnes), now the Union Ministry of New and Renewable Energy (mnre), provided capital subsidy to set up wind farms. Subsequently, onus shifted to state governments. The Union government, however, continued to provide accelerated depreciation (80 per cent in the first year), virtually allowing an investor to write off its capital in a year, and a 10-year tax holiday.

U.S. wind-energy installation is, likewise, driven chiefly by federal and state subsidies and incentives, namely the 2-cents-per-kWh Production Tax Credit, along with accelerated depreciation for wind equipment, and state renewable-energy mandates. Wind-energy developers can recoup their investments quickly, so long as the PTC remains in effect. If the PTC expires, not only will we see a drastic drop in wind-energy investment and installation, but existing wind-power providers are likely to cease operations, leaving stranded not only plants but potentially transmission infrastructure. But for now, from the U.S. to India, the gettin’ is good.