Bluefield Solar Income Fund (LSE:BSIF) has cautioned that UK government proposals to change how older renewable energy schemes are adjusted for inflation could dent the value of its portfolio and risk unsettling investors.
The company, which owns a large portfolio of UK solar farms, said the Department for Energy Security and Net Zero’s new consultation, published last week, could reduce its net asset value by as much as 10% if the more severe of two proposed options is adopted.
The consultation focuses on two long-standing subsidy schemes that supported the early rollout of renewable energy in Britain: Renewable Obligation Certificates (ROCs) and Feed-in Tariffs (FiTs).
These schemes guarantee payments to generators of clean power, adjusted each year in line with inflation.
At present, the payments are linked to the retail prices index (RPI), a long-used but now outdated measure of inflation. The government is considering moving them to the consumer prices index (CPI), which generally rises more slowly.
Ministers had planned to make the switch in 2030 but are now proposing to bring it forward to 2026.
Under one option, payments would start tracking CPI from 2026. Under another, they would be frozen until CPI “catches up” with RPI, after which CPI-based indexation would apply.
The government says the move could save households between £4 and £13 a year on energy bills, though those figures exclude wider effects, such as the potential impact on the cost of financing future projects.
Bluefield said that based on its initial analysis, its portfolio could see a fall in value of around 2% (or roughly 2p per share) under the first proposal, and around 10% (or about 11p per share) under the second.
The company said it was engaging with officials as part of the consultation process, warning that retrospective changes to existing contracts could “undermine investor confidence at a time when private capital is essential to delivering the UK’s clean power ambitions.”
Bluefield Solar said it remained committed to supporting Britain’s transition to renewable energy but would continue to push for policy stability and “fair treatment of renewable investments.”