Renewable energy trusts were already struggling before the government decided to kneecap them at the end of October. In a major shock, it has launched a consultation on changing the inflation linkage on the subsidies they receive from the retail price index (RPI) to the consumer price index (CPI) in April 2026, three years sooner than expected.
Even worse, the government has floated a second, complex option that would backdate the switch to 2002. This may have been thrown in mainly to make a April 2026 change sound like a concession, but if actually implemented could reduce the income received by generators by billions of pounds over the coming years. The market reacted accordingly and the sector as a whole lost about 5% of its market value on the day.
Feuding with renewable energy trust managers
It is regrettable that many managers were paid fees based on a percentage of NAV rather than performance. This became increasingly controversial once shares traded far below NAV. In the past year, many trusts have belatedly shifted to levying fees on a 50/50 mix of NAV and market value (or in UKW’s case, entirely on market value). Dealings with managers are becoming a common point of contention. Take Aquila European Renewables (LSE: AERI), which has agreed to sell assets to another fund advised by Aquila at a large discount to the current NAV, says Nicholls. How can the same manager assign two different values to the same assets? Or take a plan by Bluefield Solar Income Fund (LSE: BSIF) to merge with its manager, saying this would make it easier to invest in new projects. The trust has instead put itself up for sale after a backlash. Or just this week, TRIG has said it will merge with HICL Infrastructure (LSE: HICL), run by the same manager.
These developments show a lack of concern for investors, says Nicholls, which is clouding the real value of the assets. “If boards were more respectful of shareholders, the share prices would be a lot higher.”
It isn’t clear what it will take to shift sentiment towards the sector. The government’s consultation certainly won’t help. Still, there needs to be a substantial change in the way these trusts are run, with a primary focus on the interests of shareholders. Only then can investors begin to trust NAVs are what managers say they are.
With the final shares in the Snowball declaring their dividends the total income for 2025 should be £11,930.00. There are announced dividends to paid next year of £682.00 as we start the journey again.
Income for 2025 of £9,175,57 has been exceeded and I will try to exceed next year’s target also.
One advantage the Snowball has on the above figures is that the interest in the table is compounded once a year, whilst the Snowball can add funds as they are received, normally monthly.
Current cash for re-investment £881, with further income to be received this year of £1,511.00.
Current quarterly income pencilled in of £2,479.00, which of course isn’t income until it sits in your account.
Foresight Solar is pleased to announce the third interim dividend, for the period 1 July 2025 to 30 September 2025, of 2.025 pence per ordinary share. The shares will go ex-dividend on 29 January 2026 and the payment will be made on 20 February 2026 to shareholders on the register as at the close of business on 30 January 2026.
The Board confirms its annual dividend target of 8.10 pence per ordinary share for the 2025 financial year.
Temple is the Snowball’s pair trade, where a Trust with a lower yield is traded with a Trust with a higher yield to maintain a yield of around 7%.
Buying a Trust to make a capital gain near or at the end a bull market is and always will be a gamble.
Maybe if there is a Santa rally, last years was a damp squib, the Trust could be sold at a profit. If not as the dividends are received, part will be invested into TMPl, so a falling market would be a positive.
The first dividend of £30 has been earned, many a mickle makes a muckle.
Historically anyone who bought has outperformed the market and the share may do again, having achieved the holy grail of investing in that you could take out your capital and invest into a higher yielder and retain the remaining shares and try to do it all over again.
Current yield 3.1%
Dividends included and re-invested into a higher yielder.
At the low the dividend yield was 7.5% and is currently 8% on buying price.
Trading Update for Q3 2025 and Unaudited Net Asset Value
Foresight Solar, the fund investing in solar and battery storage assets to build income and growth, announces that its unaudited net asset value (NAV) was £564.5 million at 30 September 2025 (30 June 2025: £603.8 million). This results in a NAV per Ordinary Share of 102.1 pence (30 June 2025: 108.5 pence per share).
Summary of key changes
Item
p/share movement
NAV on 30 June 2025
108.5p
Interim dividends paid
-2.0p
Time value
2.1p
Power price forecasts
0.1p
Project actuals
-0.4p
REGO price forecasts
-1.3p
Inflation
0.5p
Portfolio discount rate adjustments
-1.4p
Share buyback programme
0.1p
Tax review adjustments
-3.6p
Other movements
-0.5p
NAV on 30 September 2025
102.1p
Moderately higher power price forecasts across the middle and the long end of the UK curve, along with mostly flat curves in Spain and Australia led to an upside of 0.1 pence per share (pps) to NAV.
Unplanned distribution network operator (DNO) outages in the UK and curtailment in both Spain and Australia affected electricity production in the three months between July and September. Project actual performance, therefore, resulted in a negative impact to NAV of 0.4pps.
Updated pricing to reflect independent consultant’s forecasts for Renewable Energy Guarantees of Origin (REGO) certificates culminated in a 1.3pps downside.
Inflation assumptions have been updated, with the 2026 RPI forecast increasing to 3.5% from 3.0%, and 2025 CPI updated to 3.5% to bring it closer to actuals, making up the positive 0.5pps effect to NAV.
The discount rate applied to the Australian assets was raised by 165 basis points (bps) to reflect feedback from the recent sale process. This is indicative of values bidders are using when pricing standalone solar portfolios in what is currently a buyer’s market where no pure play solar deals have taken place for more than 12 months. This adjustment resulted in a negative impact to NAV of 1.3pps (included in the broader portfolio discount rate adjustments).
For the Spanish portfolio, discount rates were raised by 75bps to reflect inferred pricing from recent transactions. During the period, the investment manager adjusted the methodology for Spanish power price forecasts, incorporating a third consultant into the blend and aligning it with the process used for the UK. The net impact of these changes was 0.1pps (included in the broader portfolio discount rate adjustments).
The Company continued its buyback programme, repurchasing roughly 3 million shares, returning £2.8 million to shareholders, and adding 0.1pps to NAV in the third quarter of 2025. Since repurchases began, they have delivered a cumulative 2.9pps increase in NAV.
Foresight Solar, with the support of a leading tax advisor, has engaged with HM Revenue & Customs in respect of its group tax structure. This process has been productive in respect of achieving an agreed position for historic tax submissions and providing clarity for tax obligations going forward. Having reached this agreement, however, the current best estimate of tax forecasts indicates that future tax payments will need to be increased, leading to a 3.6pps downside adjustment to NAV. The board has opted to include this estimate in this quarter’s update, consistent with the Company’s transparent approach. To the extent required, the directors will announce any future updates to the market.
Other movements include working capital adjustments, foreign exchange fluctuations, minor adjustments to contract values, and a de minimis change to the valuation of Foresight Solar’s pre-construction battery storage project, Clayfords.
Commenting on the third quarter net asset value movements, Tony Roper, chair of Foresight Solar, said: “The valuation reductions and the tax review are disappointing for us and shareholders. This quarter’s challenging news compounds a difficult year for the renewable energy investment trust sector, with a difficult macro environment, a volatile regulatory landscape and frustrating share price performance.
“Operational performance year to date is in line with budget, giving us confidence in achieving our dividend cover target for this year.
“We continue to analyse options available to deliver the best potential outcome for investors. In the meantime, we are focused on addressing the share price discount to NAV. Divestment processes are ongoing, with the aim of unlocking capital, we continue to return cash to shareholders via one of the largest buybacks in the sector relative to NAV, and we are committed to paying down debt further.”
Trading update
Electricity production from the global portfolio was 6.3% below budget in the third quarter, despite irradiation 3.6% above base case.
In the UK, DNO outages hampered generation, which was 1.8% under budget, whilst irradiation was 6.9% higher than expected. Stripping out the effects of grid interruptions, production would have been in line with forecast.
Curtailment was a challenge in both Spain and Australia, with generation 17.9% and 4.4% under budget, respectively.
Divestment update
The process to sell the Australian assets has been paused. A small number of bids for the entire portfolio were received, but, upon thorough investigation, none were deemed deliverable. The directors have, therefore, decided to review whether the portfolio can be re-positioned before re-assessing with the investment manager and advisors when to restart the process. In the meantime, the investment manager is focused on refinancing the portfolio and progressing the two co-located BESS projects.
The investment manager is also overseeing sales processes currently underway for the additional 75MW of operational solar assets marked for disposal and the board will update investors in due course.
Gearing
The Gross Asset Value (GAV) on 30 September 2025 was £969.4 million (30 June 2025: £1,005.6 million), with total outstanding debt of £404.9 million representing 41.7% of GAV (30 June 2025: £401.8 million and 40.0%) – comfortably within the 50% limit.
At 30 September 2025, the RCF balance was £91.7 million drawn (30 June 2024: £75.9 million), reflecting working capital requirements and pending cash receipts from the portfolio after the summer. After post-period distributions from the projects, the revolving credit facility was repaid, and the drawn balance is currently £72.7 million.
ROC and FIT consultation
On Friday, 31 October 2025, the UK Department for Energy Security and Net Zero unveiled proposals to revise the inflation indexation of the Renewable Obligation (ROC) and Feed-in Tariff (FIT) schemes. These changes have the potential to impact future revenues for operating UK solar projects and dampen investor confidence in the country’s renewable energy sector.
The document outlines two approaches under consideration:
· Option 1: An immediate revision to the date of the switch from Retail Price Index (RPI) to Consumer Price Index (CPI), bringing it forward to April 2026 from April 2030.
· Option 2: A temporary freeze in indexation to allow for a gradual realignment with CPI. The retrospective calculation of indexation would mean a realignment only happens in the mid-2030s.
Modelling the potential impact of these changes on the Company’s latest Net Asset Value (NAV), option 1 would be equivalent to a downside impact of c.1.7 pence per share or 1.6%. In the more aggressive option 2, the effect is c.10.4pps or 10.2%. (Estimates are based on information currently available and may evolve as the consultation progresses.)
The board is disappointed in the proposals. The inflation linkage embedded in the ROC and FIT schemes is a core component of the investment case for many operational assets in the UK. The Board will urge the government to carefully assess the likely impact of these proposed changes on investor confidence. This is particularly important at a time when increased investment is essential to achieving growth targets and securing the necessary build-out of renewable generation to support energy security and affordability, and to meet net zero goals.
When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.Read More
The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.
Real estate investment trusts (REITs) are often known to offer attractive income payments to investors. To maintain favourable tax treatment, the trusts have to pay out a high proportion of their profits to shareholders. However, when I saw a REIT with an incredibly high yield, I wanted to see if it really was sustainable or not.
Company details
I’m talking about the Regional REIT (LSE:RGL). As the name suggests, the property portfolio is primarily in regional UK centres, outside the M25 motorway. In case Londoners forget, there is a world outside of Zone 5!
Should you buy Regional REIT Limited shares today?
One unique feature about the REIT is that it holds a mix of office, industrial, retail, and residential properties. Typically, other REITs would focus on just one area of the market. Yet, like other companies in the sector, Regional REIT makes money through long-term rental agreements. This is a key element that makes cash flow strong, which ultimately should translate to making the dividend streams predictable.
Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.
A generous dividend yield
At the moment, the yield stands at 9.45%. Over the past year, the share price has fallen by 18%. This is one reason why the yield has risen. After all, the dividend yield is calculated from the dividend per share and the share price. So if the stock falls, it acts to push up the yield. Although some might see this as a red flag.
The yield might be high, but in the latest half-year report from September, management said the dividend was fully covered. This means the income paid is taken from earnings, with earnings alone sufficient to pay the dividend. This shows that it’s sustainable and not stretching the company.
Looking ahead
The September update provided several signs that the dividend could be sustainable. There is strong lease activity, with the firm recently securing new lettings and lease renewals. For example, it reported £1.6m of new or renewed rent, beating their estimated rental values.
Further, the team has a process of selling non-core assets. This generates cash that can be used to reduce debt or reinvest in higher-return properties.
One risk I do see is the ongoing work on debt refinancing. A major debt facility matures in August 2026, and if interest rates remain high or financing conditions tighten, refinancing could be expensive or difficult.
Even with this concern, I don’t think the yield is too good to be true. As a result, I think it’s an income stock for investors to consider as part of a broader diversified portfolio.
