REG - NextEnergy Solar Fnd - Potential Impact of ROC and FiT Consultation

NextEnergy Solar FundAnnouncement

11/11/2025 07:00

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RNS Number : 9590G  NextEnergy Solar Fund Limited  11 November 2025

LEI: 213800ZPHCBDDSQH5447

11 November 2025

NextEnergy Solar Fund Limited

("NESF" or the "Company")

 

 

Potential Impact of UK Renewable Obligation Certificate and Feed in Tariff
Consultation

 

 

On 31 October 2025, the UK's Department for Energy Security and Net Zero
("DESNZ") published a consultation
(https://assets.publishing.service.gov.uk/media/6904d681823bdda9488b2517/ro-inflation-indexation-consultation-document.pdf)
regarding potential changes to the indexation of Renewable Obligation
Certificates ("ROC") and Feed-in Tariffs ("FiT").  The consultation presents
two options that could potentially affect NextEnergy Solar Fund's Net Asset
Value ("NAV").

 

What are the ROC and FiT schemes?

The UK's ROC and FiT schemes were designed and introduced by the UK Government
to encourage investment in renewable electricity generation by providing
long-term certainty of stable inflation-linked revenues.  The ROC scheme
supports large-scale generators by awarding certificates for each
megawatt-hour of renewable electricity produced.  Energy suppliers are
obliged to buy the ROCs, providing a guaranteed and predictable source of
income for generators. The FiT scheme helps smaller-scale generators by paying
for both the electricity they generate and any surplus they export to the grid
based on inflation-linked pricing set by the UK Government.  These schemes
have been instrumental in making renewable energy projects in the UK
financially viable.  Both schemes have now closed to new applicants and been
replaced by newer schemes like Contracts for Difference.

 

How does ROC and FiT indexation work?

Currently, both ROC and FiT schemes adjust payments for inflation using the
Retail Price Index ("RPI").   Both are calculated using the previous year's
RPI and applied from 1 April each year.  As previously announced (and already
reflected in the Company's NAV), RPI will be retired as a measure of inflation
from 2030 and the ROC and FiT schemes will instead use the Consumer Price
Index ("CPI").  As a measure of inflation, RPI has historically been higher
than CPI.

 

What does the consultation propose?

DESNZ proposes to change the current approach to indexation of the ROC and FiT
schemes.  Two potential options are proposed, both summarised below.

 

What are the two proposed options in the consultation and what is the
estimated impact on NESF, if either is adopted?

As of 30 June 2025, approximately 50% of the Company's total revenues were
derived from the UK's ROC and FiT schemes.

 

Option 1 - An immediate switch to CPI indexation from RPI:

 •    What it 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.
 •    How it would work: Annual ROC and FiT prices would continue to be adjusted in
      line with inflation but would be linked to CPI instead of RPI.
 •    Potential impact on NextEnergy Solar Fund if this option was adopted and
      applied to the 30 June 2025 NAV:

 

           Estimated impact on NAV per Ordinary Share  Estimated % impact on NAV
 Option 1  c. -2p                                      c. -2%

 

Option 2 - An immediate, temporary freeze to the ROC and FiT prices:

 

 •    What it means: The UK Government would temporarily freeze the ROC buy-out
      prices and FiT prices, effective from April 2026.
 •    How it would work: ROC buy-out prices and FiT prices would be fixed
      temporarily at their current rate.  The UK Government would calculate
      'shadow' price schedules for ROC buy-out prices and FiT prices as if CPI had
      been the relevant measure of inflation from 2002.  No further
      inflation-linked increases would be applied to ROC buy-out prices or FiT
      prices until the relevant 'shadow' price reaches the current rate.  From that
      point onwards, annual indexation would resume in line with CPI.
 •    Potential impact on NextEnergy Solar Fund if this option was adopted and
      applied to the 30 June 2025 NAV:

 

           Estimated impact on NAV per Ordinary Share  Estimated % impact on NAV
 Option 2  c. -8p                                      c. -9%

 

Investors should note that these are proposals around which the UK Government
is currently consulting, and there is no certainty that either proposal will
be implemented.

 

Investors should also note that the Company's estimations currently consider
only the direct impacts of the potential changes to the Company's ROC and FiT
revenues and are based on the limited information published by the UK
Government in the consultation documentation.  At this stage it is not
possible for the estimations to take into account countervailing impacts of
the investment uncertainty introduced by the proposals, such as increases in
wholesale power prices caused by increases in the cost of financing the
planned increase in UK renewable generation capacity.

 

What are we doing about it?

NextEnergy Solar Fund, alongside its investment adviser, NextEnergy Capital, a
specialist solar investment manager with over $4.5bn of funds under
management, is responding directly to this consultation and will ensure clear
and robust feedback is provided on behalf of NESF and its shareholders.

 

The response will emphasise the Company's expectation that implementing either
proposal would prove detrimental for all stakeholders, including investors,
energy consumers, HM Treasury and the UK economy more widely.

 

The Company has highlighted its concerns to its relevant trade associations
and is working with its advisers to support the Company's formal response,
which will be made public in due course and will be available for review on
the Company's website.

 

 

 For further information:                          

                                                   

 NextEnergy Capital  

                                                  020 3746 0700 

 Michael Bonte-Friedheim                          ir@nextenergysolarfund.com (mailto:ir@nextenergysolarfund.com)
 Ross Grier                                        
 Stephen Rosser                                    
 Peter Hamid (Investor Relations)                  
                                                  020 7653 4000 

 RBC Capital Markets 
 Matthew Coakes                                    
 Kathryn Deegan                                    
                                                  020 7908 6000 

 Cavendish 
 Robert Peel                                       
                                                  020 7379 5151 

 H/Advisors Maitland 
 Neil Bennett                                      
 Finlay Donaldson                                  
                                                   
                                                  01481 742642 

 Ocorian Administration (Guernsey) Limited 
 Kevin Smith                                       

 

 

Notes to Editors (1):

 

About NextEnergy Solar Fund

NextEnergy Solar Fund is a specialist solar energy and energy storage
investment company that is listed on the Main Market of the London Stock
Exchange.

 

NextEnergy Solar Fund's investment objective is to provide Ordinary
Shareholders with attractive risk-adjusted returns, principally in the form of
regular dividends, by investing in a diversified portfolio of utility-scale
solar energy and energy storage infrastructure assets.  The majority of
NESF's long-term cash flows are inflation-linked via UK government
subsidies.

 

As at 30 June 2025, the Company had an unaudited gross asset value of
£1,050m.  For further information please
visit www.nextenergysolarfund.com (http://nextenergysolarfund.com/)

 

Article 9 Fund

NextEnergy Solar Fund is classified under Article 9 of the EU Sustainable
Finance Disclosure Regulation and EU Taxonomy Regulation.  NextEnergy Solar
Fund's sustainability-related disclosures in the financial services sector are
in accordance with Regulation (EU) 2019/2088 and can be accessed on the ESG
section of both the NextEnergy Solar Fund and NextEnergy Capital websites.

 

About NextEnergy Group

NextEnergy Solar Fund is managed by NextEnergy Capital, part of the NextEnergy
Group.  NextEnergy Group was founded in 2007 to become a leading market
participant in the international solar sector which now employs over 400
professionals.  Since its inception, NextEnergy Group has been active in the
development, construction, and ownership of solar assets across multiple
jurisdictions.  NextEnergy Group operates via its three business units:
NextEnergy Capital (Investment Management), WiseEnergy (Operating Asset
Management), and Starlight (Asset Development).

 

·     NextEnergy Capital: has over 18 years of specialist solar
expertise having invested in over 530 individual solar plants across the
world.  NextEnergy Capital currently manages four institutional funds with a
total capacity in excess of 4GW+ and has funds under management of $4.5bn.
More information is available at www.nextenergycapital.com
(https://www.nextenergycapital.com/)

·     WiseEnergy®:  is a leading specialist operating asset manager in
the solar sector.  Since its founding, WiseEnergy has provided solar asset
management, monitoring and technical due diligence services to over 1,600
utility-scale solar power plants with an installed capacity in excess of
3.5GW.  More information is available at www.wise-energy.com
(https://www.wise-energy.com/)

·     Starlight: has developed over 100 utility-scale projects
internationally and continues to progress a large pipeline of c.11.5W of both
green and brownfield project developments across global geographies.  More
information is available at www.starlight-energy.com
(https://www.starlight-energy.com/)

 

Notes:

(1:) All financial data is unaudited at 30 June 2025, being the latest date in
respect of which NextEnergy Solar Fund has published financial information.

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