NextEnergy Solar welcomes indexation choice but remains "disappointed"

Wed, 28th Jan 2026 12:39

(Alliance News) - NextEnergy Solar Fund Ltd on Thursday said the government has chosen the "less disruptive" option for a planned inflation indexation change, but not its preferred course of action.

In response, NextEnergy shares were 4.2% higher at 51.08 pence on Wednesday afternoon in London.

The UK and Europe-focused investor in environmental infrastructure acknowledged the UK government's response to a formal consultation on changing the inflation indexation of ROCs and feed-in tariffs.

The consultation sought views on whether the consumer price index would be a fairer or more accurate measure of inflation for the purpose of indexing the buy-out price of the UK's renewables obligation schemes, which incentivise UK renewable electricity generation through the trading of ROCs.

The three schemes, for Scotland, Northern Ireland and England & Wales, closed to most new applications on 2017, but RO generators will continue to receive payments until between 2027 and 2037.

The government response said the majority of those answering the consultation disagreed that the use of the CPI would be more accurate or fair and of the two options proposed, 48% expressed a preference for neither.

Of these, the majority said Option 1, an immediate switch to CPI indexation, was the least disruptive. "Only a small minority of respondents", conversely, supported a temporary freeze and gradual

realignment with CPI.

The government subsequently confirmed that it plans to pursue the immediate switch to CPI.

This "means the UK government would change the inflation measure for ROC buy-out prices and FiT prices from RPI to CPI, effective from April 2026," NextEnergy explained.

NextEnergy expects a negative impact to its net asset value per share of around 2p. It said it will provide a further update in February, alongside its third-quarter 'NAV & Operating Update'.

Ross Grier, NextEnergy Capital's chief investment officer, commented: "Whilst the selected option is the less disruptive of the two proposed, we remain disappointed that the government is taking steps that are expected to harm investor confidence in Great British infrastructure at a time when we need more capital than ever to deliver the energy transition in a timely fashion."

By Emma Curzon, Alliance News reporter

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