NextEnergy Solar Fund Limited (LON:NESF), a leading specialist investor in solar energy and energy storage, has announced it has today published its full year results and annual report as at year ended 31 March 2025.
Key Highlights (reconfirmed from Q4 NAV & Operating update)
Financial:
· Net Asset Value (“NAV”) per Ordinary Share of 95.1p (31 March 2024: 104.7p).
· Ordinary Shareholders’ NAV of £547.4m (31 March 2024: £618.6m).
· Gross Asset Value of £1,061m (31 March 2024: £1,155m).
· Income generated of c.£73.2m (31 March 2024: c.£80m).
· Financial debt gearing (excluding Preference Shares) of 29.7% (31 March 2024: 29.3%).
· Total gearing (including Preference Shares and total look-through debt) of 48.4% 1 (31 March 2024: 46.4% 1).
· Weighted average cost of debt (including Preference Shares) of 4.9% (31 March 2024: 4.5%).
· Weighted average cost of capital of 6.6% (31 March 2024: 6.4%).
· Weighted average discount rate across the portfolio of 8.0% (31 March 2024: 8.1%).
Dividend:
· Total dividends declared of 8.43p per Ordinary Share for the twelve months ended 31 March 2025 (31 March 2024: 8.35p).
· Dividend cover for the twelve months ended 31 March 2025 was 1.1x (31 March 2024: 1.3x).
· The Board is pleased to reconfirm its full-year dividend target guidance for the year ending 31 March 2026 of 8.43p per Ordinary Share (31 March 2025: 8.43p).
· As at 13 June 2025, the Company offers an attractive dividend yield of c.12%.
· The full-year dividend target per Ordinary Share for the year ending 31 March 2026 is forecast to be covered in a range of 1.1x – 1.3x by earnings post-debt amortisation.
· As at 31 March 2025, the Company had declared total Ordinary Share dividends of £395m since inception, the equivalent to 76.26p per Ordinary Share.
Portfolio:
· 101 2 operating assets (31 March 2024: 103 2).
· Total installed capacity of 937MW 2 (31 March 2024: 1,015MW 2).
· Total electricity generation for the year ended 31 March 2025 of 830GWh (31 March 2024: 852GWh).
· Generation against budget for the year ended 31 March 2025 of -5.3% 3 (31 March 2024: 0.3%).
· Irradiation against budget for the year ended 31 March 2025 of 0.1% (31 March 2024: 2.6%).
· Remaining weighted asset life of 24.8 years (31 March 2024: 26.6 years).
· Since inception the Company has generated 6.6TWh of electricity (31 March 2024: 5.8TWh).
Share Buyback Programme:
· As at 31 March 2025, the Company had purchased 15,125,342 Ordinary Shares for a total consideration of £11.2m through its up to £20m Share Buyback Programme, delivering a NAV uplift of 0.5p per Ordinary Share.
· As at 13 June 2025, 15,621,142 Ordinary Shares have been purchased for a total consideration of £11.5m.
· Shares purchased under the Share Buyback Programme are being held in the Company’s treasury account.
Capital Recycling Programme:
· The remaining 100MW of the Capital Recycling Programme is progressing through a competitive sales process to third-party buyers. The Company will publish further updates about Phase IV of the Programme in due course.
· As at 13 June 2025, the Capital Recycling Programme has:
o Sold three asset sales totalling c.145MW of capacity from the 245MW Programme.
o Raised £72.5m total capital.
o Added a total estimated Net Asset Value uplift of 2.76p per Ordinary Share.
Capital Structure:
· As announced on 12 March 2025, the Company consolidated and reduced the cost of its short-term Revolving Credit Facilities into one facility at an attractive rate of 120bps over SONIA.
· As at 31 March 2025:
| Debt facilities | Original size (£m) | Amount outstanding (£m) |
| Long-term amortising debt | £212.5m | £147.2m |
| Short-term RCF | £205.0m | £144.9m |
| Total financial debt | £292.1m | |
| Preference shares | £200.0m | £198.5m |
| Total debt | £490.6m 4 |
· Short-term RCF drawn of £144.9m (31 March 2024: £135.0m).
· Long-term amortising debt paid down by £62.2m (31 March 2024: £60.2m). The remaining outstanding long-term debt of £147.2m is on track to fully amortise in line with the remaining subsidy life of the portfolio’s inflation linked government subsidies.
· Of the Company’s total debt of £490.6m 4:
o 70% remains at a fixed rate of interest (including the Preference Shares).
o 30% remains at a floating rate of interest via the short-term RCF.
· Total look-through debt of £23.5m (31 March 2024: £12.6m). This represents the total combined short and long-term debt in the Company’s investment into NextPower III LP, and its two co-investments (Agenor and Santarem) on a look-through equivalent basis. This is included in the Company’s total gearing ratio of 48.4%.
ESG & Sustainability:
· The Company continued to maintain its Article 9 Fund classification under the EU Sustainable Finance Disclosure Regulation and EU Taxonomy Regulation.
· The Company and its Investment Adviser continue to implement activities in support of its Approach to Nature strategy benefiting biodiversity across NESF sites and continue to support industry action on supply chain sustainability, including the Solar Stewardship Initiative.
Strategic Options Framework:
· The Board of NESF are committed to driving value for shareholders and apply a robust framework in assessing all strategic options.
· NESF continues to explore multiple strategic options for the future.
· The Board hires appropriate independent advisers to ensure the Company receives tailored advice on all potential options. If a strategic option presents value, the Board will consult major shareholders on material developments.
· The Board are in active discussion with the Company’s Investment Adviser regarding revising the IM fee to align with shareholders.
Annual Report:
· The Company’s Annual Report for the year ended 31 March 2025 is now available on the Reports & Publications section of the Company’s website.
· A copy of the Annual Report has also been submitted to the FCA’s National Storage Mechanism.
Full Year Results Presentation:
· The Company will livestream its full year results presentation via webcast for both investors and analysts and will be followed by a Q&A session.
o Time: 10:00am (BST)
o Date: Monday 16 June 2025
o Webcast link: NextEnergy Solar Fund Full Year Results Presentation
· The presentation will be hosted by:
o Paul Le Page (Interim Chairman, NextEnergy Solar Fund)
o Ross Grier (Chief Investment Officer, NextEnergy Capital, Investment Adviser)
o Stephen Rosser (Investment Director, NextEnergy Capital, Investment Adviser)
· A recording of the presentation will be made available on the Company’s website shortly after the event.
Paul Le Page, Interim Chairman of NextEnergy Solar Fund Limited, commented:
“This year has not been easy for NESF, our shareholders, and the wider investment company sector. We have seen continued pressure on our share price discount to Net Asset Value (“NAV”) which averaged c.27% throughout the 12-month period but we are pleased to see the start of a recovery since the Company’s discount hit an all-time high in January 2025. The sustained discount has been driven by multiple macroeconomic factors which are outside of the Company’s immediate control; this has resulted in negative sentiment towards the entire alternative investment company sector.
Despite this backdrop, the Company’s large portfolio of operating assets has continued to demonstrate resilience, adaptability, and strength under the stewardship of both the Board and the Company’s Investment Adviser, NextEnergy Capital.
I understand that this has been a particularly frustrating time for our shareholders whom I would personally like to thank for their continued long-term support to the Company as demonstrated by the overwhelming vote ‘Against’ discontinuation at last year’s AGM, and I would like to reassure that both the Board and the Investment Adviser remain committed to returning long-term value to NESF shareholders.
The Board continue to apply strategic rigour and a clearly defined assessment criteria to evaluate new growth opportunities for total shareholder return. Each opportunity is assessed on its merits, with a focus on shareholder value, strategic fit, and alignment with NESF’s portfolio and long-term growth objectives. This includes engaging with the Board’s independent external advisers, as appropriate, to ensure a robust, well-informed and value approach, which is applied to all potential strategic initiatives. Impacts to the Company’s NAV, portfolio composition, investment limits, and gearing position are also considered in detail to maximise the returns delivered to Shareholders. If sufficient positive synergies and compelling value accretion are identified, the Board will agree to pursue further.
The Company maintains an acute focus on delivering long-term shareholder value and return through disciplined decision-making and a resilient strategic framework. The Board are in active discussion with the Company’s investment adviser regarding revising the Company’s investment management fee to further align with shareholder interests and I remain optimistic about the path ahead for the Company as we look forward to making tangible progress across the Company’s long-term strategy over this new financial year.
In May this year Helen Mahy stepped down as director of the Company to pursue other interests. The Board and I would like to thank Helen for her hard work and contributions and wish her the very best with her future endeavours. Helen leaves NextEnergy Solar Fund and the Board well positioned to take advantage of the opportunities that lie ahead.”
Ross Grier, Chief Investment Officer of NextEnergy Capital said:
“Over the year, NESF made solid progress, including executing the Capital Recycling Programme, launching the share buyback programme, paying a fully covered FY dividend of 8.43p per ordinary share, re-investing back into the health of the portfolio and setting the stage for onward growth of the platform. The Board has approved a sustained dividend target of 8.43p per Ordinary Share for the year ending 31 March 2026 which it considers appropriately balances the interests of the Company, investors and other stakeholders in the current macroeconomic climate. Such a decision demonstrates continued discipline and will allow for continued access to NAV accretive opportunities, aiming to reduce the discount to NAV whilst providing shareholders with a total return via share price appreciation and a sector leading dividend yield in the FTSE 350 of c.12% as at 31 March 2025.
NESF has delivered an attractive, cash covered dividend in the face of operational challenges and continued macroeconomic pressures and volatility across the UK equity markets. The Company’s ordinary share price continues to trade at a material discount to its Net Asset Value per share which is frustrating given this progress but with oversight from the Board, the team has taken action to narrow this discount through a combination of strategic activities and continues this work actively.
Having been part of the NESF journey since IPO in 2014, I am extremely proud of the impact, momentum and value it has provided since its listing on the London Stock Exchange eleven years ago. Having delivered a portfolio of 1GW capacity of solar energy and energy storage assets, against a total of c.18GW of solar currently deployed across the UK NESF has been a key contributor to the progress made to date on energy security and net zero and is well positioned to play a key role in the next phase of this growth with CP30. We will continue to deliver long-term value via total return as we ramp up for growth, narrow the discount to NAV and continue to pay cash covered dividends. Thank you to all our shareholders, past, current, and prospective for supporting NESF and preparing for our next phase together.”
12-Month NAV Bridge Breakdown:
| NAV p/share | NAV | |
| At 31 March 2024 | 104.7p | £618.6m |
| Time value | 8.2p | £48.3m |
| Project actuals | (2.4p) | (£14.1m) |
| Power price forecasts | (4.2p) | (£25.1m) |
| Changes in short-term inflation | 1.1p | £6.7m |
| Revaluation of NextPower III LP & Co-investments | (0.5p) | (£3.1m) |
| Cash dividends paid | (9.9p) | (£58.7m) |
| Sale of Whitecross | 0.6p | £3.3m |
| Sale of Staughton | 0.9p | £5.4m |
| Share buyback | 0.5p | (£11.2m) |
| Capital movements (no net NAV impact) | ||
| – New assets at cost | 2.5p | £14.6m |
| – Repayment of RCF using cash on hand | 3.5p | £20.7m |
| – Cash on hand, used to fund investments | (6.0p) | (£35.3m) |
| Other movements in residual value | (3.9p) | (£22.7m) |
| At 31 March 2025 | 95.1p | £547.4m |
The movement in the NAV over the period was driven primarily by the following factors.
NAV accretive movements:
· Time Value: The time value reflects the change in the valuation as a result of changing the valuation date, prior to adjusting for any outflows of the Company. The increase in value is attributable to the unwinding of the discount applied to cash flows for the period when calculating the discounted cash flow.
· Share Buyback Programme: Shares purchased in the period as part of the Company’s Share Buyback Programme of up to £20m. The Programme used £11.2m of cash on hand to purchase 15,125,342 Ordinary Shares in the period, resulting in an increase in the NAV per Ordinary Share of 0.5p.
· Inflation Forecasts: A slight increase in short-term inflation assumptions from 2025 to 2026 – now assuming 3.8% UK RPI for calendar year 2025-26. The Company continues to take a consistent approach to its inflation assumptions, using external third-party, independent inflation data from HM Treasury Forecasts and long-term implied rates from the Bank of England for its UK assets. For international assets, IMF forecasts are used. Long-term assumptions are aligned with market consensus including transition to CPI from 2030. See breakdown of UK inflation assumptions below.
NAV deductive movements:
· Cash Dividends Paid: The dividends paid during the period, including both Ordinary and Preference Share dividend payments.
· Power Price Forecasts: A decrease in short-term (2025-2030) UK power price forecasts provided by third-party consultants. This is due to a downwards revision of gas price forecasts, driven by an expected increase to the global gas supply from new liquefaction capacity, particularly in the US and Qatar. Medium and long-term prices have increased due to increased power demand forecasts compared to the December 2024 update. See power curve assumptions graph below.
· Project Actuals: The project actuals figure was driven by generation performance, which was impacted by lower-than-expected irradiance levels in January and February that was offset by higher-than-expected irradiance levels in March, network outages and higher operating expenses. NESF reports individual generation figures twice a year in its interim and full-year results.
· Revaluation of NextPower III LP & Co-investments: Movements in the fair value of the holding in NextPower III LP and the two co-investments reflecting operational and macroeconomic updates.
· Other Residual Value Movements: Includes changes in FX rates, fund operating expenses, capital expenditure provisions for asset health, such as repowering inverters and module replacements, and other non-material movements.
Inflation Rate (UK RPI) Assumptions
| Calendar Year | 31 March 2025 | 31 March 2024 |
| 2025/26 | 3.80% | 2.90% |
| 2026/27 | 3.10% | 2.90% |
| 2027/28 | 3.30% | 3.50% |
| 2028/29 | 3.40% | 3.60% |
| 2029/30 | unchanged | 3.00% |
| 2030/31 onwards | unchanged | 2.25% |
Discount Rate Assumptions
| 31 March 2025 | 31 March 2024 | ||
| Solar | UK unlevered | unchanged | 7.50% |
| UK levered | unchanged | 8.20% – 8.50% | |
| Italy unlevered 5 | unchanged | 9.00% | |
| Subsidy-free (uncontracted) 6 | unchanged | 8.50% | |
| Life extensions 7 | unchanged | 8.50% – 9.50% | |
| Energy Storage | Uncontracted | unchanged | 10.00% |
| Contracted | unchanged | 7.00% |
Power Curve Assumptions
31 March 2025: Blended Power Curves (Capture Price)
For the UK portfolio, the Company uses multiple sources for UK power price forecasts. Where power has been sold at a fixed price under a Power Purchase Agreement (“PPA”) (a hedge), these known prices are used. For periods where no PPA hedge is in place, short-term market forward prices are used. After two years, the Company integrates a rolling blended average of leading independent energy market consultants’ long-term central case projections. Recognising the increased potential for power price uncertainties driven by policy developments such as Clean Power 2030 (CP30), the ongoing Review of Electricity Market Arrangements (REMA) and other factors influencing the forward price projections produced by independent consultants generally, the Company has incorporated the projections of a fourth independent, industry-leading consultant within its long-term central case methodology. The blend of forecasts reduces volatility, presenting a fair and balanced outlook consistent with pricing methodologies used for successfully divested assets and power price assumptions across broader peer group.
For the Italian portfolio, PPAs are used in the forecast where these have been secured. In the absence of hedges, a leading independent energy market consultant’s long-term projections are used to derive the power curve adopted in the valuation.
Power Purchase Agreement Strategy
c.50% of NextEnergy Solar Fund’s revenues come from RPI-linked government-backed subsidies. The remaining c.50% of revenues are secured through NextEnergy Solar Fund’s PPA strategy where the Company secures PPAs over a rolling 36-month period. This proactive risk mitigation helps secure and underpin both dividend commitments and dividend cover whilst reducing volatility and increasing the visibility of cash flows.
Forecasted Total Revenue Breakdown 8:
Available Capital
Out of the total £205m immediate Revolving Credit Facility available to the Company, c.£60.1m remained undrawn and available for deployment as at 31 March 2025. The Company had c.£3.2m immediate cash balance available at the Company level as at 31 March 2025 (this is separate from the cash currently held at Holdco/SPV level).
Future Pipeline
The Company owns the project rights for, or has exclusivity over, a carefully selected £500m pipeline of development projects in utility-scale solar (>400MW UK & OECD target markets) and UK energy storage (>250MW UK BESS). In addition to this proprietary £500m pipeline, the Company benefits from the right of first offer on relevant assets across both the NextEnergy Capital and Starlight development pipelines as and when projects in that pipeline have progressed to the necessary stage. The Company will evaluate future investments into the pipeline relative to the returns available from all alternative capital uses, including paying down debt and additional share buybacks.
Footnotes:
1. Includes total look-through debt of £23.5m (31 December 2024: £23.6m). This represents the total combined short and long-term debt in the Company’s investment into NextPower III LP (NPIII), and its two co-investments (Agenor and Santarém) on a look-through equivalent basis.
2. On a look-through MW equivalent basis, this includes investment NPIII, where it owns 6.21%, ownership in the international co-investments (13.6% of Santarém (210MW in Portugal) and 24.5% of Agenor (50MW in Spain)), and 70% ownership of the Company’s standalone energy storage asset Camilla through its joint venture partnership.
3. Excludes performance of private equity vehicle (NPIII) and co-investments. Figures have been adjusted, where relevant, for events outside of the Company’s control, such as distribution network operator outages, and for events in which compensation has been or will be received, such as warranty claims.
4. Excludes total look-through debt of £23.5m.
5. Unlevered discount rate for Italian operating assets implying 1.50% country risk premium to 7.50%.
6. Unlevered discount rate for subsidy-free uncontracted operating assets implying 1.0% risk premium to 7.50%.
7. 1.0% risk premium added to UK unlevered (7.50%) and UK levered assets (8.20% – 8.50%) for cash flows after 30 years where leases have been extended.
8. As at 31 March 2025, fixed revenues include subsidy income, figures are stated to the nearest 0.1% which may lead to rounding differences. NextEnergy Solar Fund minimises its merchant exposure through its active rolling PPA Programme. The Programme locks in PPAs in the liquid market to ensure maximum contracted revenues are achieved. Fixed prices (£/MWh) covers 83% (776MW) of the total portfolio as at 31 March 2025. Excludes Solis portfolio.
