Bluefield Solar Income Fund (LSE:BSIF) anticipates the UK government's removal of Carbon Price Support from April 2028 will reduce the group's net asset value by approximately 1.0p per share.
Carbon Price Support, a tax on fossil fuels for electricity generation introduced in 2013 to bolster the ETS price, is being removed as government policy deems it to have achieved its aim of displacing fossil-fuel generators, and Bluefield Solar is a London-listed UK income fund focused primarily on acquiring and managing solar energy assets.
"Based on our current understanding of the announcement on 21 April, Bluefield Partners view the potential changes as neutral to positive for operators such as BSIF," said James Armstrong of Bluefield Partners.
The Investment Adviser said it has modelled early market-forecaster updates and expects the CPS removal to lower near-term power prices and shave c.1.0p per share from NAV, while an immediate rise in the Electricity Generator Levy from 45% to 55% is judged to have minimal impact.
The government also proposed voluntary Wholesale Contracts for Difference for renewable generators, with an allocation process due in 2027 after a consultation later this year and a proposal that Renewables Obligation-accredited generators would exchange only their wholesale revenues for a fixed CfD price.
Bluefield Partners said it will engage with the announced consultation on the WCfD and other policy changes.
Bluefield Solar currently owns and operates an 850MW UK portfolio comprising 792MW of solar and 58MW of onshore wind.
