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India Seen Adding Wind Capacity After Tax Credit Revived

According to reports, India may add an additional 1,000 megawatts of wind energy a year after the government revived a tax incentive.

Small manufacturers dependent on diesel power will now find it viable to invest in wind projects with 2 megawatts to 3 megawatts of capacity, said Madhusudan Khemka, chairman of Indian Wind Turbine Manufacturers Association.

Without the credit, some wind projects that depend on accelerated depreciation were not viable, Khemka said in a phone interview from Chennai.

“This gives a huge fillip to the sector,” Khemka said. “As manufacturers we are keen to have it.”

Indian Finance Minister Arun Jaitley last week decided to restore an incentive for the technology, the Mint news organization reported. Officials at the finance ministry couldn’t immediately be reached for comment. Dilip Nigam, director of wind energy, in the Ministry of New and Renewable Energy, said he hasn’t had notification of the rule change yet.

Turbine manufacturers such as Suzlon Energy Ltd. (SUEL) and Gamesa Corporacion Tecnologica SA will benefit from the decision. Installations have been cut in half in the past three years as two incentives for the technology were removed.

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