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Foresight Solar NAV Slips to 93.8p

Foresight Solar Fund's net asset value slipped 1.1p a share in the third quarter as higher discount rates and the dividend outweighed time value, power prices and inflation, despite generation running well above budget.

Foresight Solar Fund (LON: FSFL) reported an unaudited net asset value of 93.8p per share at the 30th of September, down 1.1p from 94.9p at the 30th of June. The London-listed company owns solar and battery storage assets, mainly in the UK, with some in Spain and Australia.

Total NAV was £511.1m, against £517.9m three months earlier. The NAV is a valuation of the portfolio, not a share price. The two largest items in the fall were 2.0p of dividends and a 1.8p hit from higher discount rates, the rates used to turn future cash flows into today’s value.

Higher government bond yields pushed the UK levered solar discount rate up 25bp to 8.50%, and the Spanish rate up 50bp to 7.78%. The valuation is therefore sensitive to yields, even in a quarter when operations ran ahead.

Several items offset part of the damage. Time value added 2.2p, while power price forecasts and inflation assumptions each added 0.5p. UK RPI and CPI assumptions for 2026 rose to 4.5% and 3.5%. Project actuals added 0.2p, and other movements cost 0.7p, including working capital, buybacks, currency and a £3m provision for interest on tax payments.

Waterfall chart of Foresight Solar Fund NAV per share falling from 94.9p to 93.8p in the third quarter of 2026
NAV per share bridge, quarter to 30 September 2026, pence. Source: Foresight Solar Fund

Operations were strong. Generation in the quarter was 9.8% above budget, with the UK and Australia outweighing a weaker Spain, and the UK realised power price of £74.78/MWh was 16.9% above budget. Some 81% of 2026 revenues are contracted. Debt was £382.4m, or 42.8% of gross asset value, from 43.0% at the end of June.

A consultation opened last Wednesday on a Wholesale Contract for Difference, a voluntary scheme with a fixed strike price. Yesterday a second consultation covered replacing tradable Renewables Obligation certificates with a centrally determined, inflation-linked price from April 2028. The Investment Manager is assessing how both interact with hedging, revenue certainty and shareholder returns.

On disposals, the Investment Manager is progressing targeted sales, and one negotiation has moved into exclusivity. The Company said it will update the market in due course.

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