Wind and solar power firms in India are counting on the new government of Narendra Modi to be friendly to alternative energy when it takes up shop later next month. While most of India’s wind turbine manufacturers are private, one large volume company has become the go-to choice to play mean and green in Modi’s India. Suzlon Energy has been trading like a triple levered exchange traded fund, and making every investor happy.
On Thursday, the Press Trust of India called Modi the country’s “first energy literate Prime Minister” and said industry groups are hoping the BJP party, which won a landslide victory against the incumbent Indian National Congress, will design polices allowing for the faster expansion of clean power generation.
Smaller power stations attached to wind and solar might be easier to set up in rural parts of India that remain unconnected to the national grid. About 400 million people in India lack access to electricity, more than the combined population of the U.S. and Canada.
BJP's victory was so complete, that India analysts believe it will not need to rely on political coalitions to get things done. For starters, industry insiders apparently think that one of the first orders of business in Indian energy policy will be reinstating an accelerated depreciation for investments into wind energy projects, which is great for tax purposes, and give the sector priority lending from the State Bank of India.
Tulsi Tanti, Chairman of the Pune India based wind power company The Suzlon Group, told the newswire today that, “the BJP-led government will provide an environment conducive for growth and investments, with major reforms in the infrastructure and renewable energy sector. This is important as India’s economic environment will act as a catalyst in reviving the global economy.”
Suzlon has announced plans to enter offshore wind power generation in India this year. It’s known primarily as a turbine manufacturer for windmills and recently signed an agreement with Chicago based PowerWorks to supply 98.7 megawatts of wind turbines in 29 units that will be set up in California and Illinois. The company is hoping India will be another important market.
As of 31 December 2013, the installed capacity of wind power in India was 20,140 megawatts and generates 1.6% of India’s electricity, while solar power has an installed capacity of around 2,200 megawatts, according to the government’s Ministry of Renewable Energy.
Suzlon Energy shares have faced some favorable tailwinds since Narendra Modi’s BJP party swept into victory this week. Shares of the turbine maker rose 52% in the last five trading sessions on the Bombay Stock Exchange, with share volume of more than 14.7 million. Year to date, the stock is up 93% in anticipation for a cleaner and greener India post-election.