Wind power tariffs to be sustainable at around Rs 3 per unit in 2018-19

CRISIL expects wind power companies to sustain stable credit outlooks despite lower cushions for debt servicing rendered on account of lower tariffs

Wind power is likely to be sustainable at around Rs 2.9-3 per unit in 2018-19 because of reduction in payment and offtake risks, lower capital cost per generated unit and conducive debt financing. 

Such tariffs, despite being 28 per cent lower than the lowest under the erstwhile feed-in-tariff regime, would still offer developers a healthy and sustainable 12 to 14 per cent equity IRR, or internal rate of return.

According to Crisil data, prices have dropped to Rs 2.51-2.52 in April 2018 per unit from Rs 3.46 a unit in February 2017. However, compared to the price range prevailing in