NESF confirms subsidy-free build-out has started as generation surges

NextEnergy Solar Fund (NESF) has confirmed that it has kickstarted the build-out of its UK-facing subsidy-free solar pipeline. 

This morning NESF, one of the UK’s largest solar investors, published its results for the year ended 31 March 2019, confirming that construction had started at its 5.5MW Hall Farm II subsidy-free solar project in Leicestershire. 

Having started in February, the array is expected to start generating power in Q3 2019. 

The project is located adjacent to NESF’s existing Hall Farm solar farm, a 5MW feed-in tariff-backed project which completed construction in November 2015. 

NESF has invested some £2.2 million in the subsidy-free project, the first in a line of developments the investor hopes to get over the line this financial year. 

This morning chairman Kevin Lyons confirmed that immediately after construction at Hall Farm II has finished, the fund will start development of its 50MW Staughton plant in Bedfordshire.

In total, the fund expects to add between 100 – 150MW of subsidy-free capacity to its portfolio this financial year at an expected investment of between £55 million and £80 million. That would indicate a deployment cost of somewhere in the region of £550,000 to £530,000 per megawatt.

Assuming around 125MW of subsidy-free solar comes to fruition, NESF’s subsidy-free portfolio would make up around 15% of the fund’s total generation for the year. 

“These achievements are notable as they demonstrate the economic case for new solar PV assets in the UK compared to other energy generation technologies, many of which still require extensive and expensive subsidies,” Lyons said. 

NESF has been pursuing subsidy-free developments for more than a year, confirming its intent to bring post-subsidy assets to market last summer. It then swelled its subsidy-free pipeline by bolting on another 470MW in November. 

The company will not be the only one to be deploying subsidy-free assets this year, however, with Gridserve understood to have also started construction at its utility-scale solar farm in York.

Solar Media’s in-house market research continues to track the country’s subsidy-free solar pipeline, more details on which can be found here. 

The development comes on the back of a banner year for NESF, which saw generation some 9.1% above forecast following higher than expected irradiation. 

Those results boosted NESF’s bottom line, which saw profit before tax more than double from £32.2 million recorded in 2018 to £70.6 million reported in 2018/19.