Solar, Wind etc for Income

[BusyBumbleBee]

There are several quoted investment companies registered in the channel Islands (no stamp duty on purchases) with portfolios of either Solar Farms or Wind Farms and one or two which have other 'green' investments. Typically they were issued at 100 pence per share and now trade a little above that and above NAV. Typically they paid about 6 pence per share with the promise that this would rise along with the RPI a promise they have kept to date. They are able to do this because a substantial part of their income comes from the government by way of Feed in Tariffs or under the ROC regime.

They are BSIF (Blue Solar), NESF (NextEnergy), FSFL (foresight Solar, TRIG (the Renewable Infrastructure Group), UKW (Greencoat UK) and JLEN (John Laing environmental ) which has slightly different assets and the right of first refusal on John Laing's environmental assets.

Most of them are still buying up working wind or solar farms as the Big Energy providers recycle their money into new wind farms etc so there are frequent new issues - latest to announce one is JLEN.

The Total Expense Ratio for these is below 1% which is good considering the assets have to be managed.

It seems to me that these can play an important part of any portfolio striving for income. Any thoughts?

[mc2fool]

They are able to do this because a substantial part of their income comes from the government by way of Feed in Tariffs or under the ROC regime.

Both of which are susceptible to political risk of course.

22-Jun-15 IC article: The government is to end public subsidies for onshore wind farms via its Renewable Obligation Certificate (Roc) Scheme a year early, limiting the range of opportunities for investors in the sector which include three renewables infrastructure investment trusts. Rocs will no longer be available from 1 April 2016, instead of 2017 as previously expected. http://www.investorschronicle.co.uk/2015/06/22/funds-and-etfs/investment-trusts/generate-good-returns-from-renewables-despite-subsidy-curbs-wVAYjF4RoJXbNyuozD3LbK/article.html

22-Jul-15 IC article: In the recent Budget the government announced that it would end the exemption on the Climate Change Levy for renewably sourced electricity from 1 August 2015, hitting the revenues of renewable energy infrastructure investment trusts. The move comes shortly after the news that the Renewable Obligation Certificate (Roc) subsidy scheme for onshore wind will end a year early on 1 April 2016. http://www.investorschronicle.co.uk/2015/07/22/funds-and-etfs/the-big-theme/renewables-its-hit-by-climate-levy-change-xBEnnqtWUmYfW756eSuyBJ/article.html

Of course, all that will be in the price now, but it is a sector that's potentially prone to further government diddling. Having said that, I hold TRIG & UKW and the latest IC article on the sector, of three months ago, is quite positive. http://www.investorschronicle.co.uk/2016/08/25/funds-and-etfs/the-big-theme/turn-to-clean-energy-for-income-that-s-inflation-resilient-xNgRQkKY0jXEOTYItyprHP/article.html

[richfool]

I have been following TRIG., but was put off by the premium currently of c 10.5%

http://citywire.co.uk/money/investment- ... undID=3733

[BusyBumbleBee]

They are trading at a premium to NAV - so I do not intend to buy any more at the moment - and I have holdings in all of them. The LEC hit last year was somewhat annoying as I had just put my feet in the water when Osborn announced it. Price has recovered somewhat and taking into account dividends I am 'in the 'money' even after the hit.

There is scope for government to meddle here but if they do too much more they will be unable to meet their green energy targets. I haven't seen a fully detailed breakdown of the business rates revaluation but there haven't been too many squeals so I assume it was broadly acceptable.

Many share prices go off on an annual 'walkabout' with the share price swinging through a 25-30 % change during the year. These seem to be establishing a pattern of reaching their annual lows in February so I will possibly top up then - and may trade out of some in the meanwhile. But the swing in share prices is only about 10% so not as worhtwhle as UU, or Unilever, say

Best value share a the moment seems to be BSIF but there are some other infrastructure funds in the VCT sector. Notably the Ventus Twins - but that's another story - if you can get back to the Fool there is a stack of information there about these and what good value they could be if the directors do their job properly,

[BusyBumbleBee]

I am looking at RM DIRECT LENDING RM SECURED IPO which is looking to give a 6.5% yield and seems to be investing in quite small companies

Specific return objective is a highly visible long term dividend
yield in excess of 6.5% (on the issue price) for the year to 31
December 2018 onwards. No performance fees.

see https://dzexi57u5vx1h.cloudfront.net/im ... tsheet.pdf