Policymakers’ aggressive focus on cutting prices has been a key pressure point for the industry.
"The government’s insistence on tariff caps in the auctions has resulted in recent tenders being undersubscribed," said DV Giri, secretary general of the Indian Wind Turbine Manufacturing Association.
"The industry has made many appeals to the [energy] ministry to remove tariff caps and has offered alternative tendering options, such as closed bidding or substation capacity-based bidding, but there has been no decision.
"Unless the situation changes, I don’t foresee installed capacity going beyond 45GW by 2022," Giri said.
The relentless drive to lower costs has also hit projects supported by the previous Feed-in tariff regime. Utilities are withholding payments for the older projects that have higher tariffs than those being discovered in the auction. Total pending dues from the utilities is nearing $1.6 billon.
As a result, nearly 1.9GW of mostly wind projects have seen a ratings downgrade, casting doubt on the ability of the existing investors to support further growth.
"The government is thinking about asking utilities to issue a letter-of-credit guarantee to generators against which power shall be dispatched," said Rajsekhar Budhavarapu, member of the national council at the India Wind Power Association (IWPA).
"A better solution could be a revolving letter of credit, equivalent to two months generation dues, backed by an agreement between the state utility, the developer and a sovereign entity like the central bank."
"State governments have a limited world view. They don’t think about import bills or energy security and are more focused on commercial management," said Atul Shah, a wind industry-veteran and consultant.
However, the problem in Gujarat is slightly different, he added. "The state has realised that there may not be enough land available to host all the projects awarded."
The industry feels problems are being viewed from the limited perspective of institutional or state jurisdiction.
"The complete map from policy to implementation is never drawn," Shah said.
Giri agreed: "There is a disconnect between different government agencies that are tasked with overseeing and supporting implementation," he added.
India has many policies and regulations to support renewables growth, but the implementation is far from adequate.
The Open Access regulation allows consumers to procure power from the generator of their choice. But it is not applied uniformly.
The key industry complaint is that fees for the inter-state transmission network are waived for government agencies but not for private players.
"This is discriminatory as the government cannot be preferential to the public sector," Budhavarapu said.
"Extending this waiver could open up a 15-20GW market comprising the large steel and cement industries that use coal-based generation but are under obligation to buy renewable power."
Utilities are required by law to meet a certain percentage of their consumption with renewables, while rules related to grid management allocate a must-run status for renewable-energy projects.
However, the implementation of both these regulations is inadequate and state utilities are the main defaulters.