The sector has at least made a few tough calls in recent weeks.
23rd March 2026
by Dave Baxter from interactive investor
Stock markets dislike conflict, and it’s no shock to see equities tumbling in response to events in the Middle East. But we also get some surprise “winners” in the midst of such uncertainty.
One such name is Greencoat Renewables GRP
whose shares have returned roughly 16% since late February.
What’s going on here? The trust might have encouraged investors by recently jumping into a hot subsector, having sought to capitalise on demand for data centres with the launch of a “new green digital infrastructure platform” earlier this month.
But we are also seeing a boost for the renewable energy infrastructure sector more generally: the recent conflict has put the subject of energy independence back on the agenda, making things such as wind and solar more relevant.
A much higher energy price is more generally good for the renewable trusts -al though the possibility of higher inflation, higher interest rates and higher government bond yields is most certainly not.
This all puts the sector back into the spotlight at a time when, bowing to some seemingly relentless pressures, a handful of renewable trusts have made painful decisions in the hope of (eventual) recovery.
Bargain hunters, who have done plenty of buying of names like Greencoat UK Wind UKW
will have to judge whether that recovery now seems feasible.
| Some renewable trusts have recovered in challenging times | |
| Trust | Share price total return (%), 28/02/26 to 23/03/26 |
| Greencoat Renewables GRP1.27% | 15.9 |
| Bluefield Solar Income Fund BSIF0.12% | 9.1 |
| Octopus Renewables Infrastructure Ord ORIT0.87% | 8.9 |
| Gore Street Energy Storage Fund Ord GSF6.53% | 6.3 |
| Greencoat UK Wind UKW0.05% | 5.5 |
| Foresight Environmental Infra Ord FGEN0.14% | 4.8 |
| Gresham House Energy Storage Ord GRID0.13% | 3.7 |
| Renewables Infrastructure Grp TRIG1.97% | 1.8 |
| Foresight Solar Ord FSFL1.16% | -0.8 |
| NextEnergy Solar Ord NESF0.78% | -13.4 |
| SDCL Efficiency Income Trust plc. SEIT1.83% | -15.3 |
Source: FE Analytics, 23/03/26. Past performance is not a guide to future performance.
Fire sales and dividend ‘pauses’: trusts are at least making tough decisions
Renewables trusts face a multitude of problems but one issue is that they need to reduce their substantial levels of debt, and that with big discounts to net asset value (NAV) they cannot simply drum up more cash by issuing more shares.
They therefore need to sell assets and manage down any burdensome costs. Such costs can come in the form of expensive debt or a dividend that seems unsustainable. We have seen a few trusts take action on these fronts in recent weeks.
NextEnergy Solar has roughly halved its dividend payment as part of a “strategic reset” that will involve it focusing more on total returns, looking to get its debt down to between 40% and 45% of gross asset value, doing more “capital recycling”, restarting NAV growth and increasing its energy storage exposure.
As is often the case with dividend cuts, investors were not happy, with the shares tumbling and the discount widening further. The market also gave short shrift to the US Solar Fund Ord USF
which “temporarily paused” its dividends as part of its efforts towards building a stronger balance sheet.
Meanwhile, SDCL Efficiency Income Trust plc. SEIT
announced at the end of last week (20 March) that it had sold around 6% of its portfolio, but at a 10% discount to NAV, as part of its mission to cut back debt and generate portfolio liquidity.
Further asset sales are expected, but the board considers it unlikely that other individual asset sale processes would “deliver equivalent shareholder value in the near to medium term”.
As such, the fund might have more unwelcome news for investors in future.
Analysts such as Winterflood’s Ashley Thomas have warned, importantly, that such asset sales will sacrifice cash flow, and likely have an impact on the future dividend.
Darkest before the dawn?
Some of the worst pain might now be over for certain trusts, or so we can optimistically argue.
Meanwhile, the discounts and yields available in the sector are pretty mouth-watering, with the NESF yield coming to around 19% even after the halving of its payout. But some of the trusts that list the biggest discounts have actually thrown in the towel already.
trades on a discount of more than 80%, but this seems irrelevant given that it has proposed to de-list its shares.
Meanwhile, Ecofin US Renewables Infrastructure Ord RNEW (52% discount)
Aquila Energy Efficiency Trust Ord AEET(50.2%), Aquila European Renewables Ord AERI0.87% (47.3%) and VH Global Energy Infrastructure Ord ENRG0.00% (30.5%) are in the process of a wind-down.
Investors could potentially consider buying in on big discounts anyway (some professional investors such as Saba Capital do this) but the liquidity in such shares tends to be pretty limited.
That does therefore leave us with a handful of trusts still in operation, many of which have at least begun some sort of a turnaround plan.
The ride, it seems, will still be rocky. Rates and bond yields could stay high, maintaining pressure on renewable infrastructure assets, and it will take such funds a long time to sell down assets.
As mentioned, we also have the prospect of more pain on the dividend front. But as with any turnaround story, we have at least started to see trust boards make some of the tough decisions that seem necessary.
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