Wind Power Plant Setup in India: Costs, Permits & Key Steps (2025)

India is emerging rapidly as a global leader in wind energy and now ranks fourth in installed wind power capacity worldwide. The government has set an ambitious target of 500 GW of renewables by 2030, making setting up wind power plants within the reach of energy investors, independent power producers, and industries looking to establish captive power plants.

KP Energy Limited, one of India's leading wind energy solutions providers, offers this complete guide on everything from site selection and permits to costs and trends ahead for setting up a wind power plant in 2025.

The Growing Potential of Wind Energy in India

From nearly 2.7 GW of installed capacity in October 2014, India has now achieved a figure bordering on 40 GW in installed capacity in 2024, an outcome of rapid development in the wind generation industry. The government has avowedly played a primary role in offering supportive policies and incentives toward making this renewable energy technology a lucrative affair for larger wind farms and, in contrast, for small personal wind power plants. 

Several factors contribute to wind energy's rising popularity:

• Abundant wind resources: especially in states such as Gujarat, Tamil Nadu and Maharashtra

• Government incentives: generation-based incentives, accelerated depreciation

• Falling technology costs: yet a lower price for wind turbine technology

• Growing corporate demand: in renewable captive power solutions.

Wind energy gives independent power producers a relatively good return because of the long-term power purchase agreements they enter into with state discoms or direct sales to commercial consumers.

Also, detailed information on setting up Wind power plant Visit: Setting Up a Wind Power Plant: All You Need to Know

Essential Pre-Feasibility Considerations

Wind Resource Assessment

It is extremely vital to conduct a thorough wind resource assessment prior to investing in a wind farm, which can include: 

• For purposes of wind speed measurement, erecting anemometers for at least 6-12 months.

• Removing various wind data sets obtained through the National Institute of Wind Energy.

• Identifying sites that maintain steady wind speeds above 6.5 m/s.

KP Energy Limited offers wind resource assessment services to guide investors in identifying optimum locations for their projects.

Land Requirements and Site Selection

Choosing a right location involves many factors:

• Wind potential: Class 3+ wind zones are ideal for commercial projects.

• Land availability: Usually 1-2 acres per MW, depending on turbine size.

• Grid connectivity: Closer to a substation to save on transmission costs.

• Environmental considerations: Avoiding ecologically sensitive areas

Navigating Permits and Approvals

The establishment of a wind power plant entails the acquisition of different consents and clearance from various authorities: 

Central Government Approvals

• Registration with Ministry of New and Renewable Energy (MNRE)

• Environmental clearances for projects above 50 MW capacity

• Approval from Central Electricity Authority for connectivity to the grid

State-Level Requirements

• Power purchase agreements with the state electricity board

• Land acquisition or lease agreements

• Approval from local municipal and pollution control board

The project development team at KP Energy Limited supports the clients in getting all the above-mentioned approvals in quick succession, thereby avoiding common regulatory pitfalls.

Understanding Project Costs and Financing

the investments in a wind power plant relate to several factors:

Capital Expenditure

• 70-75% of total project cost is wind turbines 

• Balance of plant work such as foundations, internal roads, and electrical infrastructure.

• Grid connection and substation equipment

Operational Costs

• Maintenance contract of turbines 

• Land lease payments

• Insurance and administrative costs

Financial Incentives

• Accelerated depreciation at 40% in the 1st year

• Inter-State Transmission Charge waivers.

• State-wise subsidies and tax incentives.

A typical cost of about ₹60-70 crore should be there for a 10 MW wind power plant; the payback period will be 6-8 years based on current tariff structures.

Project Implementation: From Planning to Commissioning

Equipment Procurement

Choosing the proper wind turbine is very important for the success of a project. Some of the major considerations are:

• Capacity of the turbine (2-3 MW models are the most common))

• Technology providers with strong service networks in India

• Grid compliance in Indian requirements

Construction and Installation

The construction phase involves:

• Civil works for turbine foundation

• Erection of wind turbines using specialized cranes

• Installation of electrical collection systems

Grid Synchronization and Commissioning

Final steps include:

• Test and commissioning of all systems

• Receive permission to synchronize from the grid operator

• Proof of performance and declare commercial operations.

Overcoming Common Challenges

Wind energy ventures do appear to offer returns on investment with some attractive features. However, the developer in such a scenario is confronted with many hurdles:

• Land Acquisition: Acquiring lands in high-wind zones that are not contiguous can take time. It is often more feasible to partner with local landowners through long-term lease agreements for a project than to acquire lands outright.

• Grid Connectivity: Delays in obtaining the grid connectivity approvals can act adversely in a project timeline. Getting in touch with state transmission utilities in a timely manner becomes paramount.

• Maintenance Optimization: Predictive maintenance technologies and skilled technicians as close to the project as possible can help maximize the turbine availability and energy generation.

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The Future of Wind Energy in India

The wind power sector is evolving rapidly with several exciting developments:

• Offshore Wind Potential: Considerable opportunities exist for offshore wind projects along the long coastline of India, with the expectation of the first commercial-scale projects by 2026-2027.

• Hybrid Projects: This combination of wind, solar PV, and storage is emerging to be more reliable in delivering power.

• Technology Advancements: Bigger turbines (4-5 MW), higher towers, and improved forecasting systems provide better economics for projects.

• Green Hydrogen Integration: Wind power is expected to play a pivotal role in the budding green hydrogen economy of India.

Conclusion

Wind power plants offer excellent opportunities for India's renewable energy transition. While this step consists of several other activities such as site selection and permitting, financing, and construction, the long-term benefit of the wind power plant is the gain. 

Having worked in the Indian wind energy market for more than two decades, KP Energy Limited offers wind power project solutions from inception through completion with the goal of enabling the client to achieve success at every stage of development. Our services encompass everything from initial feasibility studies to turnkey project execution and long-term operation and maintenance.