Data from a recent CRISIL Ratings analysis of over 350 solar and wind projects, comprising 12.5 GW of solar and 8 GW of wind assets, reveals a concerning trend in the wind energy sector.
Over the past five fiscal years, more than 60% of wind assets have consistently underperformed, falling short of their P90 benchmark. This underperformance, which was at its most severe in fiscal 2025 with only 20% of wind capacities meeting or exceeding the P90 level, is primarily attributed to lower-than-expected wind speeds—a fallout of climate change and shifting regional weather patterns.
Data snapshot: performance against P90 benchmark:
- Wind Assets: Only 20% met or exceeded the P90 benchmark.
- Solar Assets: 77% met their P90 level.
- Lagging Wind Assets: 45% lagged their P90 level by more than 3 percentage points.
- Lagging Solar Assets: Only 8% lagged their P90 level by more than 1 percentage point.
According to Ankit Hakhu, Director, CRISIL Ratings, “As high as 45% of wind assets lagged their P90 level by over 3 percentage points during fiscal 2025. Meanwhile, only 8% of solar assets lagged their P90 level by 1 percentage point and the remaining by 1-33 percentage points. Thus, with more solar coming into the renewable sector, the blended variation in the sector’s actual operating Ebitda (wind and solar combined) against Ebitda at the P90 level was less than 10%.”
The solar surge:
In a remarkable display of resilience, the renewable energy sector has been able to absorb the shock of underperforming wind assets due to the robust and consistent performance of solar power.
The share of solar power in the renewable energy mix has surged to over 65% in fiscal 2025, up from around 50% in fiscal 2020. This growth, coupled with solar’s superior performance against the P90 benchmark, has provided a crucial element of stability to the sector’s overall operating performance.
Financial buffers mitigate risk:
Despite the generation shortfall in the wind sector, the credit quality of renewable energy developers has remained largely intact. This is attributed to sound financial management and healthy capital structures.
According to Ankush Tyagi, Associate Director, CRISIL Ratings, “The leading developers have maintained a comfortable operating leverage (ratio of debt to Ebitda for operational assets) of 5-5.5 times, ensuring adequate cash-flow cushion (against debt servicing) of 1.2-1.3 times on average to absorb the impact of lower-than-expected generation. This, along with liquidity of 1-2 quarters, has mitigated any credit shocks.”
The future is hybrid:
The intermittent nature of renewable energy sources—solar during the day and wind during the evening and night—highlights the importance of a balanced energy mix. The combination of wind and solar assets provides a continuous supply of renewable power, making hybrid projects a strategic imperative for grid balancing.
These projects, which often integrate energy storage, are poised to account for more than 40% of new renewable capacity additions over the next three fiscal years. As the sector matures, the ability to accurately assess resource availability and monitor key performance indicators will be critical for long-term sustainability and investor confidence, as cautioned by CRISIL Ratings.
