US Solar Fund (USF) has announced that, following the change in investment manager announced on 1 December 2023, its board and manager (Amber Infrastructure Investment Advisor, LLC), determined that the contracts to sell Renewable Energy Certificates (RECs) in relation to six of USF’s Oregon projects signed in November 2023, required termination [QD comment: there is no explanation in the announcement as to why the  board and manager have determined these need to be cancelled]. USF says that reductions in cash flow assumptions for the expected revenue arising from the termination of these REC contracts amount to approximately US$8 million. In addition, the company’s subsidiaries incurred costs in connection with the termination of these contracts. These factors are reflected in the company’s 30 June 2024 reporting.

RECs are tradeable certificates awarded to generators of renewable energy to incentivise production that can be sold in conjunction with, or separate to, the electricity. The contracts to sell the Oregon RECs were entered into in November 2023 under USF’s previous manager on terms that would have been cash flow accretive for the company. USF’s says that its manager is working with its advisers and energy customers to resolve this matter, and that a detailed review is being conducted by its legal counsel. USF says that it will consider all remedies available to it to recover the losses associated with the termination of the Oregon REC contracts.

Comments from Gill Nott, chair of US Solar Fund

“In line with our prior communications with shareholders, AIIA has been proactive in reviewing all aspects of USF’s operations since it took over the role of Investment Manager on 1 December 2023. We are disappointed that these REC contracts have had to be terminated and have prioritised resolving this matter in the best interests of the Company and its shareholders.  Our efforts are now focused on establishing an appropriate allocation of responsibility for the termination costs incurred by the Company. We will keep shareholders updated in due course as appropriate.”