The performance of India’s wind and solar energy projects declined in the financial year ended March 2025 (FY25), according to Fitch Ratings, highlighting challenges in renewable energy generation despite improvements in cash collections. Overall power generation across Fitch-rated restricted groups (RGs) fell 4 percent below one-year P90 forecasts, signaling a slowdown in wind energy output and modest impacts on solar projects.
Wind Projects Underperform
Wind energy assets faced the most significant drop, with wind load factors decreasing by 8 percent in FY25 compared to FY24. This led to generation that was 9 percent below Fitch’s one-year P90 estimate, marking the lowest wind performance since FY22. In contrast, FY24 had only seen wind underperformance of 1 percent relative to forecasted levels. The reduced output is attributed primarily to lower wind resource availability rather than operational issues, Pankaj Chauhan, Weeqi Cheok and Sunny Huang at Fitch Ratings said in the report.
Solar Projects Show Stability
Solar projects, by comparison, remained more resilient, with load factors declining only 3 percent year-on-year. Solar generation tracked Fitch’s one-year P90 forecast and remained 2 percent above FY24 estimates, reflecting the higher predictability and stability of solar resources compared with wind. Solar capacity now constitutes 61 percent of the total 5,550 MW portfolio, across 67 assets, while wind makes up the remaining 39 percent across 33 assets.
Cash Collections Improve
Receivable days for power sales decreased to around 85 days in FY25, down from approximately 100 days in FY24. Most state distribution companies cleared overdue payments, and commercial and industrial (C&I) customers largely paid on time. This improvement was aided by central government reforms and a growing share of C&I offtakers, enhancing the financial health of renewable projects.
Portfolio Insights
The nine Fitch-rated RGs collectively operate 100 wind and solar assets totaling 5,550 MW, with about 54 percent of this capacity contracted to state-owned Indian distribution companies and 34 percent to sovereign entities like NTPC Limited and SECI. The spread of generation is notably different: wind output is seasonal, concentrated between May and September, whereas solar generation is evenly distributed across the year, offering greater predictability.
Key Observations from Fitch
Wind projects showed a higher P50-P90 spread (18 percent), indicating greater variability in expected generation. Solar projects had only an 8 percent spread, confirming more stable output.
The average wind load factor dropped to 20 percent in FY25, compared with 22 percent in FY24. Solar load factors remained around 18 percent.
Curtailment by a few state discoms had limited impact on overall underperformance.
Fitch Ratings’ analysis of India’s renewable energy portfolio reveals geographical disparities in wind and solar project performance for the financial year ended March 2025 (FY25). While wind projects underperformed in several states, solar projects continued to deliver more stable and predictable results.
Wind Project Performance Varies by State
Fitch’s rated wind portfolio spans seven states, with underperformance noted in Gujarat, Karnataka, Madhya Pradesh, and Maharashtra in at least four of the five years since FY21. In FY25, Andhra Pradesh was the only state where wind projects exceeded one-year P90 estimates. FY21 and FY25 emerged as the worst years for wind generation across the rated portfolio, highlighting ongoing variability in wind energy output.
Solar Projects Offer Stability Across India
The solar portfolio covers 13 states and has largely outperformed wind projects in the last seven years. Only Bihar, Gujarat, and Karnataka recorded regular solar underperformance; however, Bihar and Gujarat contribute just 5 percent to the overall solar capacity. Among the top five states representing 80 percent of Fitch’s rated solar portfolio, four states consistently exceeded one-year P90 estimates, with Karnataka being the only state with frequent underperformance.
Improved Receivables and Cash Collections
Cash collection for both wind and solar projects improved significantly in FY25. Overall receivable days fell to around 85 days, down from 100 days in FY24. The improvement was most notable in the wind segment, where receivable days dropped from 101 in FY24 to 80 in FY25. Solar projects also reduced receivables slightly, from 92 days to 90 days.
The difference in cash collection cycles reflects state payment mechanisms: wind assets often rely on subsidies paid through state governments, which can be delayed, while solar assets are primarily paid directly from operational cash flows. This has historically contributed to higher receivable days for wind projects compared to solar.
Key Takeaways
Wind projects underperformed in multiple states, highlighting seasonal and regional variability in India’s wind energy generation.
Solar projects demonstrated greater consistency and predictability, reinforcing their role in India’s renewable energy strategy.
Improved receivable cycles, particularly for wind assets, indicate better financial health for the rated portfolio and more reliable revenue streams.
Outlook
While wind project performance faced challenges due to lower resource availability, solar projects continued to deliver stable and predictable generation, underscoring their role in India’s renewable energy mix. Improved cash collections and continued government reforms are expected to bolster financial sustainability, supporting future renewable energy investments in India.
Baburajan Kizhakedath