28th Jul 2015 10:05
LONDON (Alliance News) - Bluefield Solar Income Fund Ltd Tuesday said it has entered into binding contracts to acquire two small-scale solar farms in the UK and said its full-year dividend will rise to 7.0 pence per share from the 4.0 pence paid in the last financial year.
The company said the contracts are to acquire the two projects for a total of GBP11.2 million. Both projects have a capacity below 5 megwatts peak, the maximum size for a solar farm to be classed as a small-scale farm.
One of the farms has a capacity of 4.79 megawatts peak and is based in Cornwall and the other has a capacity of 4.98 megawatts peak and is located in Norfolk.
Importantly, Bluefield said the two projects will be eligible to qualify under the Renewables Obligation and Feed-In-Tariff, both of which recently have been cut back by the UK government.
"Each project is eligible to qualify under either the Renewable Obligation Certificate or Feed-in-Tariff regimes and will not be impacted by the recently announced consultations on changes to financial support for solar PV and changes to Feed-In-Tariff accreditation from the Department of Energy and Climate Change," said the company in a statement.
Earlier in July, the DECC said small solar farms would no longer qualify under the Renewables Obligation or Feed-In-Tariffs as the cost of supporting the subsidies for small scale solar was set to be GBP2.0 billion more than expected by 2021. However, small solar farms at a certain stage of development will not be affected by the proposed changes coming into effect next year.
The Renewables Obligation was introduced in 2002, and places an obligation on UK electricity suppliers to source an increasing proportion of the electricity they supply from renewable sources.
The government originally said it would scrap the Renewables Obligation in June, but did not add solar farms to the blacklist until a month later. The DECC has said solar farms would not be eligible under the Obligation from April 1, 2016. However a final decision will not be made until September.
In addition, Bluefield said it will pay a third interim dividend of 1.5 pence per share for the year ended June 30, taking dividends for the full 2015 financial year to 5.75 pence per share, which is up from the 4.0 pence per share paid for the 2014 financial year.
Bluefield plans to announce a further dividend in September for the same financial year, leading to the full-year dividend for the year ended June 30 of 7.0 pence per share. Following that, the company will look to increase the dividend in line with RPI inflation.
Bluefield Solar shares were up 0.9% to 108.10 pence per share on Tuesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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