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Present work has analyzed the problems and prospects of RE in general and WE in particular with case study approach to analyze the penetration of wind energy in 3 wind farm clusters viz., Chitradurga, Gadag, and Davangere in southern India. Study considers the effect of policy and regulatory frame work in the implementation of WETs. It evaluates techno-economic and environmental parameters using economic indices like NPW, AEW, CUF, etc, which helps to select best rating WTGs in each cluster. Study identified relevant barriers and their dimensions in the implementation of WET. Further, the barriers were prioritized based on a Multi-Criteria Decision Making Tool called Analytic Hierarchy Process using the perceptions and value judgments of different stakeholders of WET. They included Wind turbine manufacturers, Government agencies, Researchers and Policy makers, etc. Finally, empirical research estimated the performance of three wind farm clusters adopting multi-criteria approach and it has developed a new comprehensive index called Cluster Performance Index (CPI) and compared the three clusters to find the best performing wind mill cluster.