US Solar Fund Plc · LSE:USF
US Solar Fund — H1 2024 Earnings Presentation
37 slides from US Solar Fund's earnings presentation, Sep 30, 2024
Slide 1: US Solar Fund plc 2024 Interim Results Presentation
US Solar Fund plc 2024 INTERIM RESULTS PRESENTATION 30 SEPTEMBER 2024 South Robeson (Granite portfolio), North Carolina
Slide 2: Disclaimer
Disclaimer The information in this document has been prepared at the direction of US Solar Fund PLC (“USF” or the "Company") solely for use as an information presentation about USF. USF is a closed-ended investment company incorporated in United Kingdom. The Company’s ordinary shares are listed on
Slide 3: Contents
Contents Overview Slides 3-10 Additional Disclosures Slides 11-13 Operational Performance Slides 14-20 Sustainable Investment Slides 21-22 Looking Forward Slides 23-25 Q&A Slide 26 Appendices Slides 27-35 Contacts Slide 36 2
Slide 4: Overview
Overview County Home (Heelstone Portfolio), North Carolina
Slide 5: H1 2024 Performance: Financial highlights
H1 2024 Performance Financial highlights $230.4m $147.8m $0.75NAV per share (3.1%) Net Asset Value (NAV)1 Market capitalisation1 31 Dec 2023: $0.78 NAV total return2 31 Dec 2023: $258.2m 31 Dec 2023: $177m 31 Dec 2023: (1.7%) $6.8m 0.62X 2.25 cents 4.69% The 2024 dividend target is forecast to be fu
Slide 6: H1 2024 Performance continued: Operational highlights
H1 2024 Performance continued Operational highlights Environmental highlights6 41 443MWDC 234,500 Operating solar assets Total capacity tCO2 emissions avoided 31 Dec 2023: 41 31 Dec 2023: 443MWDC H1 2023: 279,200 (current portfolio) 365GWh 11.4years 33,700 Total electricity generation Weighted avera
Slide 7: NAV movements (US$m)
NAV movements (US$m) Tender offer Discount rates Operating assumptions NAV gain $18.9m was returned The US 20-year Changes reflect the valuation Reflects the valuation impacts of cash . distributions from the underlying assets, to shareholders treasury yield has impact of revisions made to the throu
Slide 8: Discount rates
Discount rates The discount rate applied to the forecast cashflows of the Company is determined by the independent valuer based on market observations. In the current period it has increased from 8.8% to 9.2% Valuation Process USF implied equity risk premium (ERP) 10.0% USF is valued by an independe
Slide 9: Oregon renewable energy certificate (REC) contracts
Oregon renewable energy certificate (REC) contracts ♦ As previously announced, the Company’s Board and Investment anager, have determined that the contracts to sell renewable energy certificates ("REC") in relation to six of the Company’s regon projects signed in ovember , required termination ♦ REC
Slide 10: Impact of inflation on operational cashflows and NAV
Impact on inflation on operational cashflows and NAV Inflation negatively impacts operational cashflows during the term of the power purchase agreements. Overall inflation has a net positive impact on NAV Impact on Impact on Impact of inflation on the USF portfolio Inflation rate impact Increase NAV
Slide 11: Merchant price assumptions
Merchant price assumptions Merchant energy, capacity and REC curves have increased in the current period when compared to 31 December 2023 ♦ Future energy, capacity and REC prices are provided by two separate advisors ♦ Prices have increased across all regions USF owns assets in when compared to 31
Slide 12: Additional disclosures
Additional disclosures Lakeview (Heelstone Portfolio), Oregon
Slide 13: Additional disclosures: Tax equity
Additional disclosures | Tax equity Tax Equity is a term used to describe an element of the capital financing of transactions that include tax credits. It is com mon in the US Renewables market as a means to monetise the tax credits provided to renewable projects by the federal government ♦ Tax cred
Slide 14: Additional disclosures: Weather related portfolio performance
Additional disclosures | Weather related portfolio performance The portfolio has underperformed by 1.4% due to weather over the period 2020 – 2024. Monitoring underperformance and the adequacy of forecasts is being prioritised ♦ In prior periods reporting on weather variances has focused on the reas
Slide 15: Operational performance
Operational performance Tate (Olympos Portfolio), North Carolina
Slide 16: Portfolio overview
Portfolio overview The Portfolio is divided into five sub-portfolios based on the date of acquisition 4 Heelstone XII Geographic breakdown 6 Projects | 80MW State Projects Capacity (MWDC) California 2 projects 7 MW DC 5 Euryalus North Carolina 28 projects 168 MW DC 4 Projects | 61MW 1 Milford Oregon
Slide 17: Portfolio overview (capacity breakdown)
Portfolio overview (capacity breakdown ) 9 By state By remaining PPA term Balanced portfolio geographical mix, primarily located in 3 Weighted average remaining PPA term ~11.5 years9 states providing significant diversity CA, 7 MW <5 Years, 16 MW 2% 4% >20 Years, 128 MW 29% 29% UT, 128 MW 38% NC, 16
Slide 18: Weather related portfolio performance
Weather related portfolio performance The portfolio has underperformed by 3.2% due to weather over the six -month period to June. The majority of this underperformance occurred during Q1 and related to the Milford project ♦ The portfolio was impacted by unfavourable weather during the period, partic
Slide 19: Outage related portfolio performance
Outage related portfolio performance The portfolio has underperformed by 3.6% due to unscheduled outages and other non -irradiance related factors over the six- month period to June. ♦ In the second quarter solar irradiance met forecast levels although frequent, low impact unscheduled outages and fa
Slide 20: Outage related portfolio performance continued
Outage related portfolio performance continued Total generation variance by portfolio represents the variance from Forecast generation to Actual generation. The total generation variance for the period was -6.8% Portfolio Performance Summary (H1 2024) – Non-Weather Lost Generation Portfolio Performa
Slide 21: Portfolio performance | Pro-active management
Portfolio performance | Pro-active management Operational performance was 6.8% below forecast for generation and 8.4% below forecast for revenue ( -8.6% H1 2023) Remediation and performance improvement initiatives AM team seeks to address ongoing underperformance through: ♦ Improved facility operati
Slide 22: Sustainable investment
Sustainable investment Freemont (Heelstone Portfolio), North Carolina
Slide 23: Sustainable investment
Sustainable investment The Company is focused on sustainability, both in its driving purpose as an investor in solar generation capacity and in the way it manages its investments Overview 41 443MW DC Through investing in solar power assets, USF generates clean energy, reduces Operating solar assets
Slide 24: Looking Forward
Looking Forward Schell (Heelstone Portfolio), North Carolina
Slide 25: Market Update
Market Update The installed base of US solar assets continues to grow strongly with record new installations in 2023 of approximately 32GW12 . Outlook for continued growth in solar deployment remains robust with several key drivers: ♦ State, Local and Corporate renewable objectives driving renewable
Slide 26: Market Update – State Level
Market Update – State Level The states in which the Company’s assets are located, and its primary offtake counterparties, continue to provide a supportive backdrop for renewable generation UTAH 128MWDC * OREGON 140WDC * State mandates ♦ Voluntary goal of 20% renewable by 2025 State mandates Utility
Slide 27: Q&A
Q&A Jersey (Heelstone Portfolio), North Carolina
Slide 28: Appendices
Appendices Valley Center (Heelstone Portfolio) California
Slide 29: About Amber
About Amber 13 EXPERIENCED INFRASTRUCTURE FUND MANAGER 9 ~180 ♦ Investing in transport, energy, digital and public infrastructure ♦ Local presence across Europe, Australia and North America FUNDS MANAGED GLOBAL ♦ Specialist team across investment origination, asset and fund OR ADVISED EMPLOYEES mana
Slide 30: NAV Sensitivity Analysis
NAV Sensitivity Analysis The key assumptions the Directors believe would have a material impact on the fair value of the investments are set out below Change in cents per share Electricity production (P90/P10) (13.61%) (10.32) 10.45 13.79% Discount rate (+/- 1.0%) (10.84%) (8.21) 9.96 13.14% Inflati
Slide 31: Historic NAV
Historic NAV NAV15 PER SHARE ($) SINCE INCEPTION Dec-19 Jun-20 Dec-20 Jun-21 Dec-21 Jun-22 Dec-22 Jun-23 Dec-23 Jun-24 0.972c 0.964c 0.970c 0.943c 0.975c 0.967c 0.963c 0.855c 0.780c 0.750c 1 0.95 0.9 0.85 0.8 0.75 0.7 15. The Company’s approach to calculating the AV has been set out in the Valuation
Slide 32: Milford portfolio overview
Milford portfolio overview 16. As at 30 June 2024. 17. Milford is the only asset within the Company’s portfolio that is not a qualifying facility (QF), as defined under the Public Utility Regulatory Policies Act (PURPA). QFs are a special class of generating facility defined by law and categorised a
Slide 33: Olympos portfolio overview
Olympos portfolio overview 16. As at 30 June 2024 32
Slide 34: Granite portfolio overview
Granite portfolio overview 16. As at 30 June 2024 33
Slide 35: Euryalus portfolio overview
Euryalus portfolio overview 16. As at 30 June 2024 34
Slide 36: Heelstone portfolio overview
Heelstone portfolio overview 16. As at 30 June 2024 35
Slide 37: Contacts
Contacts INVESTMENT MANAGER Amber Infrastructure Investment Advisor, LLC | 1330 Avenue of the Americas, New York, NY 10019 | info@ussolarfund.co.uk Investor Relations: Meredith Frost | Telephone: +44 207 939 0550 | Meredith.Frost@amberinfrastructure.com CORPORATE BROKER Cavendish Securities Plc | On