This may be the moment to look at beaten-down renewables

Summary: At first glance, the renewable energy sector looks broken with cancelled projects and crashing valuations. But underneath the rubble is a reset that only the early, attentive investors will notice. For a few years, India’s renewable-energy sector looked unstoppable. Solar and wind capacity kept rising, factories burst with expansion plans, and anything with a green label attracted investors in droves. That fever has cooled. Some projects are being rolled back, others cancelled, and many renewable stocks have lost altitude. But this slowdown isn’t because India suddenly has too much clean energy. Far from it. The issue is that there is too much capacity on paper and too little capacity backed by real buyers, real contracts and real grid space. Capacity only on paper Every renewable project begins with paperwork. The developers, companies that build and run solar and wind plants, bid for government auctions run by agencies like SECI or NTPC. Winning an auction earns the developer a letter of award (LoA), often touted as an ‘order win’. The LoA is essentially permission to set up a certain amount of power capacity if everything else falls into place. But an LoA isn’t a sale. It doesn’t guarantee that anyone will buy the power. That only happens when the order is backed by a power purchase agreement (PPAs). This is the long-term contract—usually 25 years—where the developer gets a guaranteed tariff and customer through the agencies. And who are these customers? The state