leadf
logo-loader
viewNextEnergy Solar Fund

Stronger power prices bodes well for solar funds, says broker

Last year, some of the solar funds saw significant share price weakness related to falls in power prices and the analysts said, “we think there is scope for some recovery in share prices”

NextEnergy Solar Fund -

Recent spikes in spot power prices offer potential for a boost to net asset values for green energy funds, including NextEnergy Solar Fund (LON:NESF) and Greencoat UK Wind (LON:FSFL), broker Stifel says.

The spot power price has seen some significant spikes in recent weeks, reaching an average daily price of £199 per megawatt-hour (MWh) on January 13, 2021, compared with a typical price before of around £50/MWh.

“This is being driven by low wind and solar production at a time of high demand for heat and light,” analysts at the broker said, noting that National Grid has issued alerts due to shortages of power being generated in the UK at a time of high demand.

There was one alert last week and another two weeks earlier. 

“While this is a short term move and it is unlikely to have a material impact on the funds' revenues, the recovery in electricity pricing that we saw in H2 2020 should at least underpin NAVs at the 31/12/20 valuation point,” the analysts said. 

If prices remain above £50/MWh in the months ahead, there may be some positive impact on NAVs during 2021, they added.

Last year, some of the solar funds saw significant share price weakness related to falls in power prices and the analysts said, “we think there is scope for some recovery in share prices”.

Quick facts: NextEnergy Solar Fund

Price: 99.7 GBX

LSE:NESF
Market: LSE
Market Cap: £585.03 m
Follow

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

In exchange for publishing services rendered by the Company on behalf of NextEnergy Solar Fund named herein, including the promotion by the Company of NextEnergy Solar Fund in any Content on the Site, the Company...

FOR OUR FULL DISCLAIMER CLICK HERE

NextEnergy Solar Fund scoop twin solar assets which take portfolio up to 93...

NextEnergy Capital's Ross Grier talks to Proactive London's Katie Pilbeam about acquiring a UK based solar photovoltaic (PV) portfolio for £64.3mln that once fully up and running will increase its installed capacity by around 13%. NextEnergy Capital is the Investment Adviser for NextEnergy...

5 days, 10 hours ago

2 min read