The study of over 350 solar and wind projects — comprising 12.5 GW of solar and 8 GW of wind assets — indicated that while wind projects struggled, solar assets consistently delivered.
In fiscal 2025, just 20% of wind projects achieved or exceeded the P90 benchmark, the weakest performance in five years. By contrast, 77% of solar projects met their P90 levels, in line with their historical average.
The P90 metric, a key measure of project cash flows for debt repayment, indicates the probability of achieving a certain plant load factor 90% of the time. Even a one-percentage-point deviation below P90 can reduce debt-servicing cushions by 3-5% and returns on equity by up to 2%.
“With solar now accounting for over 65% of renewable capacity, up from 50% in fiscal 2020, the sector’s blended operating performance has stayed relatively steady,” said Ankit Hakhu, Director, Crisil Ratings.
He added that while nearly half of wind assets lagged their P90 level by more than 3 percentage points last fiscal, only a small fraction of solar assets underperformed by that margin.
Despite generation shortfalls, the sector’s credit quality remains intact. “Developers have maintained operating leverage of 5-5.5 times and adequate cash flow cushions of 1.2-1.3 times, supported by liquidity buffers of up to two quarters,” said Ankush Tyagi, Associate Director, Crisil Ratings.
Wind energy, though lagging, remains critical for grid balancing, especially during evenings, nights, and monsoon months when solar generation dips. This has spurred interest in hybrid projects combining wind, solar, and storage, which Crisil expects to drive over 40% of renewable capacity additions in the next three years.
The rating agency said close monitoring of P90 performance, operating leverage, and resource assessment will be key to safeguarding credit risk and investor confidence in the evolving renewable energy sector.
