NextEnergy Solar Regulatory News (NESF)

NextEnergy Solar Fund - Update research from QuotedData

9th February 2022

Climbing inflation and power prices driving NAV uplift

NextEnergy Solar Fund (NESF) is a leading investor in the UK solar power market. In addition, since investors approved a broadening of its investment policy in 2020, it has added exposure to battery storage and to solar assets in other OECD countries, leveraging the global expertise of its manager which is active across eight countries.

At end September 2021, NESF had 99 operational solar assets. The revenue from these comes from sales of power and government subsidies designed to encourage the growth of the renewable energy industry. The subsidy income - around 60% of the total - is inflation-linked (to RPI).

Rising power prices and higher inflation drove an uplift in NESF's net asset value (NAV) at end September and it might be reasonable to assume that there is more to come on that front. Currently, we think that a 7.0% dividend yield, covered by cash generated from the portfolio, represents an attractive entry point.

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