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The research analyzes wind power contracts under Brazil's PROINFA feed-in tariff scheme, finding that a nonlinear payment structure led wind farms to systematically misreport capacity factors (CFs). By comparing reported and realized CFs for 41 operational projects, the authors demonstrate that reported values clustered around price schedule cutoffs, while realized values did not. This misreporting resulted in wind farms being contracted for 14% more energy than delivered and 12% of first-year payments being over-payments. The paper concludes that a simple 1% interest rate penalty on overpayments would have effectively eliminated the incentive to misreport.