NextEnergy Solar Fund Ltd (LSE:NESF) said it wants to see tax breaks for renewables similar to those available in the North Sea following the widening of the windfall levy to low-carbon generators.
Chancellor Jeremy Hunt included power groups for the first time in his Autumn Statement last week.
Keith Lyon, chairman of NextEnergy, said the company "remains supportive of a UK windfall tax on extraordinary and excess profits brought about by external factors including the war in Ukraine", but added it wanted a "consistent approach to the encouragement of reinvestment of proceeds into new projects through associated tax relief so that equality is created with the oil and gas sector".
Currently, new North Sea developments earn 91% tax relief following changes when they were hit with the windfall tax.
NextEnergy's latest half-year figures showed a healthy boost from high power prices.
The specialist solar and energy storage investor's net asset value rose by 8.3% to 122.9p in the six months to end-September 2022, which included a 19.5p increase in power price assumptions netted down by a 7.5p discount rate and higher base rate forecasts (3p).
“We believe that our NAV valuation approach largely incorporates the potential impact on the company of the windfall tax that has recently been announced,” Lyon added.
Electricity generation was 639GWh, a 19% increase from the same period a year earlier and the rough equivalent of supplying Manchester and Newcastle combined.
"Against clear residual headwinds from a volatile domestic energy market, NESF has delivered positive results, generating steady revenue and a reliable and attractive dividend for its shareholders,” noted Lyon.
Total gearing (including preference shares) was unchanged at 42% while the dividend for the latest quarter rose to 1.88p to make 3.76p for the half year.
For the full year, NextEnergy is targetting a 7.52p per year dividend, a year-on-year increase of 5% and above the 4.1% calculated Retail Price Index.