Member Info for 67Sam

Two comments were posted to this article and both interested me.

The first: "At 24 years life left you forgot to add this would make a chunk of the assets 16 years old and their FIT will stop- at that point they will be left to the market to find new contracts- also their technology's old compared to newer sites and they will start to hit the replacement cycle for inverters and panels- they also have decommissioning to contend with or provision for it- in all probability they are nearing the end of their most profitable subsidized era so not worth the punt".

The second: "NESF subsidised revenue is actually locked in at around the current level of assets (circa 50%-60%) until the middle of the next decade and the assumed power curve for market prices over that time is very low (which likely means the NAV is understated). Either they'll essentially remain in run off mode and keep paying a 16% dividend or use the strategic review to make the choices required to stabilised their NAV and return to growth (which likely would include right sizing the dividend payment but in this case that's probably the right decision)."

The first points out depreciation, something that's rarely mentioned; solar farms have a fixed lifespan of about 25 - 30 years. Unsure over the second comment and interested in what others make of these views.

Richard Murphy isn't really known for optimism, but his commentary on the rumoured shadow banking crisis interested me

https://youtu.be/NMDdkEZhNbI

I can't remember a Bank of England warning before, but then I never used to pay much attention until I was skint.

Oh yeah - uptheladder - up yours you kn*bhead.

"note to all numpties."

shades of carllt aka lloyds landlord in that comment.

i don't bother so much with this board now, but i see it's the same old bat **** crazy snake pit.

"Is the poster NotMyCircus ....a reincarnation?"

I also noticed Blowers been absent since the admin crackdown. Was he sentenced for being a twat?

"a bounce to rid off their holdings at some profit"

That would be one hell of a bounce.

@BOTAK

Sorry that wasn't very clear was it. The SP dipped below 50p. The NAV has slowly sunk to about 91p.

Assuming the NAV is (in some meaningful way) representative of a truthful real world valuation.

"Ir sp.action based on the NAV?"

Im pretty sure a reduction in the NAV would be quickly followed by a reduction in the SP. Aside from that, I dont see how a quarterly desktop valuation can correlate with any of the day to day SP fluctuations.

Pc

"Articles like this scream that we are at the bottom!"

That's a bit at odds with "It isn’t clear what it will take to shift sentiment towards the sector."

This opened 2.5% higher today and ended 2.5% lower. I dont trust the NAV and I dont think Im alone. It dipped below 50p last week and I would expect that to happen again and stay there before I buy anymore. I still feel optimistic the government will realise they dropped a b*llock and back off, but its possible they dont really care about renewables or net zero. I mean how can you tell? Its "whichever way the wind blows" politics, so rational thinking doesn't apply.

"I am also looking forward to Rachel putting the economy right"

ffs

All she is interested in is herself, dreaming she will be remembered as the next Nai Bevan. I think she is deluded and incompetent and its a miracle she knows how to put a pair of shoes on successfully. More chance of her putting the economy to sleep. As for Council Tax, if she doubles Bands G and H all of the people who have clung on to those properties for years who have very little income will be forced to sell immediately. The only buyers will be property developers who will build flats and bungalows in the gardens. Mortgage demand will dry up because of falling house prices and the Lloyds SP will melt.

Denby

"As PENSIONER why I HAVE TO PAY 50% WHEN my income comprises of 1. my old age pension 2. A small private pension , 3. I GET just over £1000 from my investments per year, so my total income works out @ 17,000 pounds ?"

Nil band rate = £12,570

Dividend allowance 6 April 2024 to 5 April 2025 = £500

8.75% tax on £500 = £43.75

Basic rate tax 20% on (16000-12570) = £686

Total deductions of £686 + £43.75 = £729.75

Thats about 4.3% of your total income. Possibly you have massively underpaid tax in previous years, or have another large source of income you have forgotten about, or you are married to someone with a high income. Otherwise the mistake (very big mistake) you are making is not getting on the phone to HMRC. The app makes it easy, or you can dial 0300 200 3310 and wait for a long time then speak to someone helpful.

What is your tax code? And be clear and specific about your gross income.

Having lost over 4% it turned around from 49.6p today, something breathed a bit of life into it. Curious why it's absolutely cratered in the last 3 months.

"NAV TAX ASSUMPTIONS UNCHANGED

Having spoken to NESF management we see no read across from the onerous changes to future tax obligations that have led to a reduction in the NAV at Foresight Solar Fund. The NESF share price move pushes its yield up to 16% making it the highest yielding solar yieldco.

Foresight Solar Fund NAV Reduced by New Tax Expectations

This week Foresight Solar Fund (FSFL LN) published its Q3 NAV and this included a 3.3% reduction resulting from a review of future tax payments following discussions with HMRC. The change was made following engagement with HMRC on the fund’s group tax structure. With agreement reached and clarity achieved on tax obligations going forward, the fund was able to provide a best estimate of the impact on the NAV resulting in a 3.6p per share hit.

No Read Across to NextEnergy

Following the announcement FSFL fell 10%. However, NESF also dropped by 6% as market commentary suggested that this fund would face a similar impact. Having spoken with NESF we are clear that the tax situation is different and NESF remains happy with the tax expectations in its current NAV calculation.

INVESTMENT SUMMARY

NextEnergy Solar Fund (NESF) stands out from the UK renewable yieldco pack in three distinct ways, each one of which adds value in terms of dividend payability and reduced risk.

• Innovative financing through a simple preference share structure which has the effect of non-amortising debt with non-cash repayment.

• Efficient asset management through an outsourced relationship leading to lower operating costs and a track record of output outperformance.

• An ability to offer efficient reinvestment-based growth through a pipeline of subsidy-free projects and overseas opportunities.

NESF is the highest yielding UK renewable yieldco, yet the above characteristics suggest low risk and higher returns in the long run. In particular we see the dividend as protected by lower operating costs, lower debt amortisation payments, higher output and lower output variability.

BULL POINTS

• Low operating costs and strong output delivered by the WiseEnergy relationship

• Low cash finance costs as a result of the preference share financing

• Continued growth opportunities in the subsidy-free market, in new geographies and in energy storage

BEAR POINTS

• Power price uncertainty

• Size and liquidity

VALUATION The fund is at a discount of 44% to its NAV against a sector range of 29% to 44%. Yield is at 16.0% against a range of 10.1% to 16.0%.

RISKS Wholesale electricity price risk is a key factor across the sector although our analysis shows that NESF can continue to pay its current level of dividend despite a substantial fall in power prices. Additionally an energy sales desk manages pricing risk on a day to day basis. Regulatory change related to the impact of pricing on investment is also a risk factor as are general output risks from equipment failure or other factors."

@spantrout your comment last week seems very prescient, a dip to 50p looks ever more likely. NESF doesn't form that big a part of my portfolio, so Im annoyed but not too concerned and theres no point in selling. But its tricky knowing when the time is right to buy more. I'll try and get to the webinar on 3rd December where they present interim results. It will be interesting to see if that provides any lift. Despite wanting to believe Groks predictions, I find it hard to see when the outlook for NESF and the sector will improve.

Harley green

Out of curiosity, what do you want from a physical branch of Lloyds? Most things can be done on line or at the post office. I'm curious as I manage my father's Lloyds accounts and his branch closed last year. Apart from needing a post office onve (as he received a postal order) everything else is easy on line and it saves bucks by closing branches.

The outlook for investing in renewables in the UK is already showing signs of momentum in late 2025, driven by government policy shifts and market dynamics, but significant improvements are projected to accelerate from early 2026 onward as key reforms take effect and economic conditions stabilize.

Current Context and Challenges

As of 2025, the UK renewables sector has achieved notable progress, with renewables contributing over 50% of electricity generation in 2024 and record output levels. However, investors face hurdles like grid congestion (leading to rising constraint costs exceeding £1.8 billion in 2025), supply chain disruptions, high interest rates, planning delays, and policy uncertainties from global events. These have contributed to lean transaction activity, NAV discounts for infrastructure funds (averaging 15-77%), and subdued M&A. Despite this, 72% of investors are accelerating energy transition investments, with 56% focusing on renewables.Short-Term (Late 2025 to Early 2026): The outlook is expected to improve notably in this period due to upcoming grid reforms, such as the shift to a "first ready, first connected" system in spring 2025 and updated connection offers by year-end, which could unlock £200 billion in private investments. Falling interest rates are anticipated to make renewables more attractive relative to bonds, while the government's Clean Power 2030 Action Plan provides policy clarity to boost confidence. The June 2025 Clean Energy Industries Sector Plan, including £700 million for Great British Energy and expansions like the Clean Industry Bonus, is set to catalyze supply chain investments and job growth (e.g., up to 100,000 in offshore wind by 2030). This could mark a pivotal year for smaller funds and M&A revival. Medium-Term (2026-2030): Broader enhancements are forecasted here, with annual investments needing to reach £40 billion (£30 billion for generation, £10 billion for transmission) to meet targets like tripling offshore wind to 43-50 GW and solar to 45-47 GW. Government initiatives, such as CfD scheme reforms for Allocation Round 7, £21.7 billion in CCUS, and battery storage expansion to 24-27 GW, will support this. Renewables' share in the energy mix could rise to 88.5% by 2030, aided by smart grids, AI efficiencies, and reduced regulatory barriers. Longer-Term (Beyond 2030): Sustained growth is projected, with investments doubling to over £30 billion annually by 2035 under the sector plan, aligning with net zero goals and full decarbonisation ambitions. Emerging technologies like hydrogen (targeting 5 GW by 2030) and long-duration storage will further mature. Overall, while challenges persist, the combination of policy support, declining costs, and infrastructure upgrades positions 2026 as a key inflection point for stronger investment returns, potentially leading to a more favourable environment than in recent years.

S trout

"Can see this going below 50p b4 long"

I think you could well be right. Any views on what developments that scenario would lead to for NESF?

Ive since read that the Longspur research was actually sponsored by NESF, so if you read it then please bear in mind they are marking their own homework. For anyone else who is new to renewables, I found this article published in Feb this year quite helpful.

https://moneyweek.com/investments/energy/solar-investing-is-it-too-risky

Im also interested in investing in UKW and Ive found there are some well informed posters on that site, much of which is relevant here as well.

DE-ESCALATION NextEnergy Solar Fund (NESF) has issued a statement on the UK government’s consultation to accelerate the change in the indexation of UK solar Feed in Tariffs and Renewable Obligation Certificates to a growth rate closer to the Consumer Price Index (CPI) than the current Retail Price Index (RPI). As at 30 June c.50% of the fund’s revenues were on one of these schemes. The consultation proposes two options, both looking to reduce the escalation of these support schemes. NESF has estimated the impact if these changes were applied to the NAV at 30 June 2025. The fund expects the first option if adopted to take c.2p off the NAV, representing a 2% reduction. The second option would result in a 9% reduction taking 8p off the NAV. Both are detrimental and come at a time when all the renewable yieldcos have suffered because of higher interest rates. We see these potential changes as likely to see yieldcos continuing to buyback shares rather than invest in new assets at a time when investment is required to meet the needs of the government’s Clean Power 2030 targets. According to the consultation announcement the government is particularly mindful of impacts on renewables investment. A Move Towards CPI Growth is Already Planned The consultation proposes to implement changes for April 2026 ahead of the next scheduled annual adjustment. It offers two options with the first being a move to indexing on the basis of CPI indexation. This would see lower growth rates based on CPI but only over a five year period relative to what should have been expected. This is because the difference between CPI and RPI was already set to narrow as a result of changes in the calculation of RPI following the conclusion of a 2020 consultation by HM Treasury and the UK Statistics Authority. This resulted in the current plan to change the RPI calculation from February 2030 to include the method and data sources used in the calculation of CPIH which is CPI including housing costs and council tax. This is likely to result in a narrowing of the difference in growth rates between the two indices. The estimated impact on the NAV is 2%. Second Option Could Make CP2030 Investment Harder to Find The second option is potentially more restrictive. A “shadow” RO buy-out price would be calculated assuming CPI had applied since 2002 and the actual RO buy-out price would be frozen at 2026 levels until such time as it equalled the shadow price. This results in a reduction in NAV of 9%. The danger here for the government is that it could be seen as a raid on a settled renewable policy support mechanism. As such it could deter future investment at a time when meeting the needs of the Clean Power 2030 mission is a key area of government focus. In negotiating, offering two options where one is so awful that the first is readily accepted is known as the “Russian Front” tactic, so the second option may merely be an incentive to accept the first despite both being detrime

Https://www.proactiveinvestors.co.uk/companies/news/1082331/nextenergy-solar-fund-policy-clouds-the-outlook-says-broker-1082331.html

"it will probably be can"

Yes, I know what you mean. 60p was say hello and wave goodbye. There has to be a limit on how far this will sink, but clearly for now the market hates it.

"Can see the SP falling much further"

Can or can't?