UK Solar
Investing in solar assets in the UK – a mature technology and fragmented market, with opportunities for consolidationA long-time market leader for solar
Schroders Greencoat Solar owns and operates solar assets in the UK, focused on ground mounted solar PV generation. The strategy aims to provide robust, inflation linked yields to investors through unlisted vehicles.
Solar PV is a mature technology and low risk opportunity with robust support mechanisms in a large scale market with strong opportunities for consolidation.
Our solar team is one of the most respected in the industry, with long term expertise stretching back to the UK’s first commercial scale solar ventures.
A diverse, high performance portfolio
As governments pursue Net Zero and energy security, solar has an important role to play in facilitating this transition, creating significant investment opportunities in the UK and abroad.
Through its various vehicles, Schroders Greencoat Solar manages in excess of 1.1GW of generation capacity across over 147 solar farms around the UK, forming a high quality and highly diversified solar portfolio.
Our UK Solar portfolio team aims to offer investors access to predictable, long term secure cash flows. Performance is supported by Schroders Greencoat’s operating capacity, our team’s asset management and maintenance expertise, as well as bespoke monitoring and reporting.
Portfolio strategy
Solar PV assets can provide strong, predictable index linked cash flows, that can generate attractive risk adjusted returns.
The UK has the third largest utility scale solar market in Europe with an installed capacity of around 12GW. Our strategy has been focused on transitioning the operation of PV assets from short to long term capital and includes the construction of new solar PV assets.
Our specialist team is leading the way in solar PV investment as well as asset management and long term value enhancement. This includes the extension of asset lifecycles and the exploration of new opportunities within the solar space.
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Key Investment Risks
Volatility risk: The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested.
Liquidity risk: There may be very limited liquidity available via the secondary market of the proposed Fund given the underlying private credit assets and investors should consider an investment only if they intend to hold it for the life of the proposed Fund. Liquidity of the underlying investments might not be sufficient to meet investor subscription and redemption requirements.
Interest rate risk: A rise in interest rates generally causes bond prices to fall.
Credit risk of underlying issuers/lenders: A decline in the financial health of an issuer/lender can cause the value of its bonds/ loans to fall or become worthless.
Currency risk: The fund can be exposed to different currencies. Changes in foreign exchange rates could create losses.
Counterparty risk: The counterparty to a derivative or other contractual agreement or synthetic financial product could become unable to honour its commitments to the proposed fund, potentially creating a partial or total loss for the proposed fund.
Derivatives risk: A derivative may not perform as expected, and may create losses greater than the cost of the derivative.
Concentration risk: The proposed Fund may be concentrated in a limited number of geographical regions, industry sectors, markets and/or individual positions. This may result in large changes in the value of the fund, both up or down, which may adversely impact the performance of the fund.
Gearing risk: The proposed fund may borrow money to invest in further investments. Gearing will increase returns if the value of the investments purchased increase in value by more than the cost of borrowing, or reduce returns if they fail to do so.
Valuation risk: The underlying private credit assets may be subject to inadequate pricing reliability. In addition, property-based vehicles invest in real property, the value of which is generally a matter of a valuer’s opinion.
Industry/country risk: Legislative changes, changes in general economic conditions and increased competitive forces may affect the value of investments. Additional risks may include greater social and political uncertainty and instability and natural disasters.
Infrastructure asset risk: Infrastructure assets expose investors to additional risks, in particular construction risk (e.g. construction delays, cost overruns, etc.) and deployment risk (e.g. capital being deployed in several instalments during construction period rather than upfront for brownfield investments).