Sustainable development is closely associated with energy availability. It requires a continuous and efficient energy supply. Therefore renewable energy sources such as wind energy are vital for the Indian economy not only from supply side considerations but also for their environmental and social benefits. The current paper undertakes an empirical study of investments made at the Muppandal Wind Farm using different project evaluation methods. The results of the economic and financial analysis show that windmills having rated power more than 500 kW are economically viable and financially profitable after the year 1999. Considering improved technology, volatility of energy markets and the difficulty of huge investments, it is advisable to select windmills with the shortest payback period and to install higher rated power windmills at the Muppandal Wind Farm. The study concludes without government incentives and subsidies it would be very difficult for many firms at this location to break even.
Keywords: wind energy, energy economics, energy cost estimation, energy policy, wind farm sustainability, green energy