NESF

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  Both schemes have now closed to new applicants and been replaced by newer schemes like Contracts for Difference.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.
•	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.