MIDAS SHARE TIPS EXTRA: New British solar energy fund has chance to shine as Government expects solar to play a growing role in electricity production
To many, the idea of solar power in Britain sounds ludicrous, especially as winter nears. But solar energy relies on light rather than heat and the UK has more than enough of that, particularly in the South.
The cost of plants has also fallen and the Government expects solar energy to play a growing role in the electricity sector.
Bright future: Solar panels turn light into energy
Foresight Solar Fund intends to tap into this trend and is also scheduled to float this month. Shares will be offered at 100p and a dividend of 6p is planned, rising in line with inflation. The £200 million flotation is similar to recent wind fund offerings, but solar energy is more predictable and the plants tend to attract less opposition. For investors seeking long-term income, the shares are a good bet.
Foresight is an investment firm that has been involved in green energy and other infrastructure projects for almost 30 years.
The group has also been investing in solar projects since 2008. It will not build plants but buys them when they are up and running or near completion. Once connected to the grid, they get guaranteed Government subsidies for 20 years. Foresight expects 60 per cent of its turnover to come from these subsidies, with the rest from electricity sales.
Foresight has already agreed to buy eight plants, which can power 150,000 homes. Some are on farmland but the two largest are on old airfields.
Midas verdict: Foresight has a strong track record and the fund should prove a solid investment. Applications need to be in by October 15. Investors in search of income should apply.
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