Budget changes to Climate Change Levy hit Renewables

Changes in yesterday’s budget in relation to the Climate Change Levy (removal of Climate Change Levy exemption) for renewable electricity have had a knock-on effect on the net asset values of companies operating in the renewable energy sector as it changes the assumptions used to calculate them.

Greencoat UK Wind says it was already factoring in the removal of the levy from 2022 but says reductions in corporation tax rate offset a large part of the impact.

John Laing Environmental says the impact is -0.6% on its NAV and a minor reduction in dividend cover in the near term.

Renewables Infrastructure says the hit is 4p off its NAV. It was in the throes of raising more money and will push this back by a week.

UPDATE 9/7

Foresight Solar said it thought the hit to its NAV would be about 3% – it maintained its dividend forecast for 2015.

GCP Infrastructure said that although some of the projects it had lent money to might be affected, it thought they’d all be able to service their debt so there would be no impact on it.

Bluefield Solar said that Levy Exemption Certificates (the mechanism whereby the climate change levy exemption was monetised by the renewable energy companies) make up 3-4% of total revenues in its portfolio and  the majority of revenues are derived from the regulated revenue from the Renewable Obligation Scheme, which remains unchanged, and by selling the generated electricity under power purchase agreements. It is in the process of calculating a new NAV as at 30 June.

UPDATE 10/7

NextEnergy Solar says the impact on its net asset value is estimated to be 2%. There will be no change to their dividend policy

UKW / JLEN / TRIG / FSFL / GCP / BSIF / NESF : Budget changes to Climate Change Levy hit Renewables

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