Advent of unsubsidised solar ‘accelerating’ as BSIF expects patience to pay off

The advent of unsubsidised solar in the UK is accelerating and Bluefield Solar Income Fund (BSIF), one of the top five asset holders in the UK, now expects its previous patience in the field to pay off.

Earlier this week BSIF reported its results for the six-month period ending 31 December 2018, revealing that its underlying earnings for the period had surged by 38% year-on-year to £18 million.

This performance, chairman John Rennocks said, “had its foundations” in the fund’s carefully selected and procured portfolio, which was largely amassed before 2016.

Once prolific, BSIF has toned down its investment and acquisition strategy in recent years and in early 2017 discussed how it was prioritising its asset management strategy over new purchases.

But that quiet period looks set to end sooner than expected, with Rennocks open stating this week that the economic viability of unsubsidised solar projects in the UK is occurring faster than previously anticipated.

Rennocks mentioned comments he made in September last year stating that subsidy-free solar was “not quite there yet”, but were qualified with the admission that solar as an industry had the ability to surprise in its adjustment to “prevailing market conditions”.

Rennocks has this week stated that this adjustment in the UK “is happening and accelerating”, and BSIF expects this to be an area of “significant scale” in the coming years and the firm’s past patience looks set to pay off.

“We now anticipate that this patience and discipline should soon be rewarded with the potential arrival of an economic UK market for solar assets without subsidy. Our evaluation is ongoing and the intention is to seek to apply our highly effective investment model for primary market assets by funding through construction, to enhance the portfolio and continue to deliver our dividend objective,” he said.

Various forecasts, including those published by Solar Media’s in-house market research team, expect somewhere in the region of 500MW of subsidy-free solar projects to be energised in 2019 as projects become viable without the need of government support.

This morning Solar Power Portal has published news of 37.4MW subsidy-free solar farm, connected with a 27MW battery storage facility, which is to be developed by Gridserve and complete in October this year.