Solar and battery energy storage investment fund Foresight Solar has seen its unaudited net asset value (NAV) fall to £697.9 million in Q4 2023.
This represents a small drop of £9 million from Q3 2023, when the firm’s NAV stood at £706.9 million. It is worth noting that despite this drop in NAV, Foresight Solar saw a stronger-than-expected operational performance across its solar assets in the UK and Spain.
The NAV trading update also disclosed that recent sales of “significant” renewable energy certificate-backed (ROC) portfolios in the UK offered a market benchmark for similar assets. Interestingly, the price at which the latest deal closed indicates a value per megawatt that is more than 10% above Foresight Solar’s valuation of its own portfolio in the country, it said.
Speaking exclusively to Solar Power Portal, Foresight Solar’s managing director, Ross Driver, mentioned that the portfolio backed by significant ROCs was the one acquired by Schroder Greencoat from Toucan Energy, with a total capacity of 513.5 MWp.
In Q4 2024, Foresight Solar also re-benchmarked its UK solar capture price assumptions against actual observed portfolio performance. This resulted in a “modestly more conservative forecast for potential discounts”.
For instance, the NAV update revealed that the fund has been securing forward-fix electricity sales at “attractive rates” under power purchase agreements and these build on the proportion of contracted revenue. In the UK, which accounted for 89% of turnover, price fixes averaged £120.70/MWh across the financial year – compared to the mean day-ahead price of £94.20/MWh during the same period.
Commenting on the results, Driver noted that the average power prices that the firm has hedged are “well above what the market is currently trading at”. This, in turn, has allowed the firm to lock substantial value for investors, it said.
It is worth mentioning that Foresight’s NAV fall month-on-month is not specific to the company and is expected to widely impact UK solar investment firms, as noted by Driver.
Further analysis and information about Foresight Solar’s performance across the financial year will be released in its full results, which are anticipated to be released in the coming months.