London, January 08, 2025 – NextEnergy Capital urges the UK Government to reject retrospective changes to the Renewables Obligation (“RO”) and Feed-in Tariffs schemes (“FiT”), citing the impact on consumer costs and long-term renewable energy investment.

The proposed adjustments, on which the Government consulted prior to the New Year break, would alter how inflation is applied to revenues earned by renewable energy generators, affecting projects developed between 2002 and 2019. The RO and FiT schemes underpin thousands of solar and wind projects that have been instrumental in developing and maturing the UK’s successful clean critical infrastructure energy industry, and which are vital to Britain’s Clean Power 2030 (“CP30”) plan.

The Government states the change could cut household bills by approximately £5 a year. However, NextEnergy Capital on (behalf of NextEnergy Solar Fund) worked with market-leading energy consultancy LCP Delta to assess the cumulative effect of the proposed change on the cost of capital to the renewable energy sector. It found the proposed changes would potentially lead to a net increase in the overall cost to the consumer of £584 million – £2.5 billion from 2026 to 2050.

Britain’s reputation for regulatory certainty has been a cornerstone of its success in attracting clean energy investment. The impact on investor confidence of the proposed changes was immediate: share prices for listed renewable funds fell following the consultation’s launch. When policy risk increases, investors require higher returns to compensate, translating directly into more expensive financing for new projects. These increased costs will slow renewable energy deployment, delay projects, and lock households into volatile global gas prices and higher bills for decades to come. The proposed changes will therefore have the opposite effect to what is intended, and potentially undo the impact of the welcome news that prices may come down in April.

NEC responded directly to the Government’s consultation, ensuring clear and robust feedback was provided on behalf of its listed fund NextEnergy Solar Fund, its shareholders, and industry partners. The results of the financial modelling with LCP Delta are available here.