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On 31 October 2025, the UK's Department for Energy Security and Net Zero (DESNZ) published a consultation regarding potential changes to the indexation of Renewable Obligation Certificates (ROC) and Feed-in Tariffs (FiT). NextEnergy Solar Fund Limited (NESF) reported that approximately 50% of its total revenues as of 30 June 2025 were derived from these schemes. NESF estimates that the two proposed options could impact its 30 June 2025 Net Asset Value per Ordinary Share by c. -2p (c. -2%) or c. -8p (c. -9%) respectively, with changes effective from April 2026.
| Date | 11 Nov 2025 |
| Time | 07:00:10 |
| Category | Miscellaneous |
| ID | 9590G |
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 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 Both schemes have now closed to new applicants and been replaced by newer schemes like Contracts for Difference.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:
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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. |
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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. |
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Potential impact on NextEnergy Solar Fund if this option was adopted and applied to the 30 June 2025 NAV: |
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Estimated impact on NAV per Ordinary Share |
Estimated % impact on NAV |
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Option 1 |
c. -2p |
c. -2% |
Option 2 - An immediate, temporary freeze to the ROC and FiT prices:
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What it means: The UK Government would temporarily freeze the ROC buy-out prices and FiT prices, effective from April 2026. |
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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. |
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Potential impact on NextEnergy Solar Fund if this option was adopted and applied to the 30 June 2025 NAV: |
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Estimated impact on NAV per Ordinary Share |
Estimated % impact on NAV |
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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.
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For further information:
NextEnergy Capital
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020 3746 0700
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Michael Bonte-Friedheim |
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Ross Grier |
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Stephen Rosser |
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Peter Hamid (Investor Relations) |
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RBC Capital Markets |
020 7653 4000 |
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Matthew Coakes |
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Kathryn Deegan |
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Cavendish |
020 7908 6000 |
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Robert Peel |
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H/Advisors Maitland |
020 7379 5151 |
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Neil Bennett |
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Finlay Donaldson |
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Ocorian Administration (Guernsey) Limited |
01481 742642 |
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Kevin Smith |
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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
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
· 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
· 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
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.