QD INSIGHTS & OPINION
Matthew Read on Foresight Solar: 

“Weaker operational performance was offset by higher inflation, resilient power prices and buybacks – none of which was particularly surprising. However, the curtailment issues in Spain merit closer attention, as they highlight the consequences of having too much renewable generation capacity without sufficient storage to absorb excess supply. As more renewable capacity comes online, this imbalance is likely to become increasingly common. Capturing and redeploying surplus power when demand is higher offers clear economic and environmental benefits, reinforcing the case for continued investment in both BESS assets and broader grid infrastructure. We also think the changes to power price assumptions deserve closer scrutiny. While it is no surprise that the conflict with Iran has lifted power prices in the near term, independent forecasters now expect elevated prices to persist through 2028. This could extend further if tensions escalate or the conflict drags on, suggesting the risks remain skewed to the upside for renewable generators such as Foresight Solar. Against this backdrop, it is unsurprising that inflation expectations have also risen in the near term, and further disruption could easily result in higher inflation for longer, providing additional support to renewable funds’ NAVs at the margin.”

Current yield 10.8% Discount to NAV 34.32%