7. Economics and Policy Issues

The economics of power generation using wind energy systems depends upon the capacity utilization factor. Higher initial cost is offset by lower operating cost due to free availability of the source of energy. For locations that have relatively lower utilization factors, several promotional policy measures are adopted by different countries. A feed-in tariff system is adopted by countries like Germany, whereas a net-metering system is adopted by India for promoting the use of wind energy. Other schemes, such as time dependent rates and quota systems, are used by other countries. For encouraging the investment in the wind sector, various countries worldwide have adopted tools like the capacity credit scheme, Clean Development Mechanism, exemption of import duty, accelerated depreciation, and income tax rebate.