US Solar Fund PLC Annual report and financial statements 2024
US SOLAR FUND PLC
ANNUAL REPORT AND
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
US SOLAR FUND PLC (USF OR THE COMPANY) IS A RENEWABLE ENERGY
FUND THAT AIMS TO PROVIDE INVESTORS WITH ATTRACTIVE AND
SUSTAINABLE DIVIDENDS WITH AN ELEMENT OF CAPITAL GROWTH BY
INVESTING IN A DIVERSIFIED PORTFOLIO OF SOLAR POWER ASSETS IN
NORTH AMERICA AND OTHER OECD COUNTRIES IN THE AMERICAS.
The Company develops, acquires or constructs solar power assets that
are expected to have an asset life of at least 30 years and generate
stable cash flows by selling electricity to creditworthy offtakers under
long-term power purchase agreements. The Company’s portfolio
currently consists of 41 operational solar projects with a total capacity
of 443MW
DC
, all located in the United States.
RENEWABLE ENERGY
SUSTAINABLE INVESTMENTS
OVER VIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Company facts
1
1 OVERVIEW
2 2024 highlights
4 STRATEGIC REPORT
4 Chair’s Statement
8 Why Invest?
9 Market Outlook
10 Objectives
12 Portfolio Overview
18 Operating Review
31 Responsible Investment
42 Risk and Risk Management
52 Section 172
54 CORPORATE GOVERNANCE
54 Summary of Investment Policy
55 Board of Directors
56 Directors’ Report
58 Corporate Governance Report
64 Audit Committee Report
67 Directors’ Remuneration Report
69 Directors’ Responsibilities Statement
70 FINANCIAL STATEMENTS
70 Independent Auditor’s Report
78 Financial Statements (Audited)
82 Notes to the Financial Statements
(Audited)
97 ALTERNATIVE PERFORMANCE
MEASURES*
98 GLOSSARY*
101 KEY CONTACTS
102 NOTICE OF AGM
*APMS
Certain words and terms used throughout this
Annual Report and Financial Statements are defined
from page 98. Where alternative performance
measures (APMs) are used, these are identified by
being marked with an *. In accordance with ESMA
Guidelines on APMs, the Board has considered
what APMs are included in the Annual Report and
financial statements which require further
clarification. An APM is defined as a financial
measure of historical or future financial performance,
financial position, or cash flows, other than a
financial measure defined or specified in the
applicable financial reporting framework.
APMs included in the Annual Report and financial
statements are identified as non-GAAP measures
and are defined within the APM Section and
Glossary.
COVER IMAGES
Front cover: Milford 127.8MW
DC
(Utah)
Photo credit: US Solar Fund plc
Inside cover: Freemont (Heelstone Portfolio)
6.4MW
DC
(North Carolina)
Photo credit: US Solar Fund plc
Contents
Visit our Company website
https://www.ussolarfund.co.uk/
The Company is a
closed-end investment
trust incorporated under the
laws of England (company
number 11761009).
The Company was
admitted to the premium
listing segment of the
Official List of the FCA and
to trading on the main
market of the London Stock
Exchange on 16 April 2019.
The total number of
Ordinary Shares in issue
is 307,833,387 which are
denominated in both
US Dollars (ticker ‘USF’) and
Sterling (ticker ‘USFP’).
The Company’s current
portfolio comprises of 41
assets located in California,
North Carolina, Oregon and
Utah with a total capacity of
443MW
DC
.
Since 1 December 2023, the
Company has been managed
by Amber Infrastructure
Investment Advisor, LLC
(AIIA or the Investment
Manager), part of the Amber
Infrastructure Group (Amber).
$194.2 million
Net Asset Value
$132.4 market
capitalisation
1 Figures as at 31 December 2024 unless otherwise specified.
US Solar Fund plc
Annual Report and Financial Statements 2024
1
2 NAV total return is based on dividends paid throughout the period and NAV per share movement since inception.
3 Distributions to shareholders includes dividends related to the FY (includes $18.6m returned by way of tender offer for 2024).
Distributions to shareholders excluding the tender offer distributions total to $10.3m.
4 Operational dividend cover. See pages 24 to 25 for further dividend cover analysis.
5 Includes unrealised losses on the portfolio fair value for the year ended 31 December 2024.
6 Total return to shareholders is based on dividends paid and reinvested (at ex-dividend date) throughout the period, and share price movement since the issue price of $1.00.
This figure excludes distributions returned to shareholders via tender offers.
7 The percentage by which the closing share price on comparable dates exceeds/(falls short of) the NAV per share.
$194.2m
Net Asset Value (NAV)
2023: $258.2m
$0.63
NAV per share*
2023: $0.78
(13.4%)
NAV total return
2
*
2023: (1.7%)
$28.9m
Distributions to shareholders
3
*
2023: $18.7m
1.10x
Operational Dividend cover
4
*
2023: 0.50x
$(34.8m)
IFRS loss for the year
5
2023: $(43.1m) loss
(44.3%)
Total Shareholder Return (TSR)
6
*
2023: (34.4%)
$0.43
Share price as at 31 December 2024
2023: $0.54
(31.8%)
Discount to NAV
7
*
2023: (30.8%)
Financial highlights
2024 HIGHLIGHTS
US Solar Fund plc
Annual Report and Financial Statements 2024
2
OVER VIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
8 The total electricity generation data includes Mount Signal 2 (MS2) for the first six months of 2023.
9 Remaining PPA term from 31 December 2024.
10 Environmental figures use actual generation figures for the period. US CO
2
emissions displacement is calculated using data from the US Environmental Protection Agency’s ‘Avoided Emissions
and geneRation Tool’ (AVERT), Equivalent US homes and cars removed figures are based on CO
2
emissions displaced and data from the US Environmental Protection Agency and US Energy
Information Administration.
11 Based on the total electricity generation data includes MS2 for the first six months of 2023 for 2023 figures.
Operational highlights Environmental highlights
10 11
448,600t
tCO
2
emissions avoided
2023: 480,900t
64,600
Equivalent US homes powered
2023: 83,100
106,800
Equivalent US cars removed
from the road
2023: 104,500
41
Operating solar assets
2023: 41
698GWh
Total electricity generation
2023: 816GWh
8
10.9 years
Weighted average PPA term remaining
9
2023: 11.9 years
443MW
DC
Total capacity
2023: 443MW
DC
(9.0%)
Generation against forecast
2023: (7.2%)
BBB+
Average offtaker credit rating
2023: BBB+
South Robeson (Granite Portfolio)
6.3MW
DC
(North Carolina)
US Solar Fund plc
Annual Report and Financial Statements 2024
3
CHAIR’S STATEMENT
Dear Shareholders,
On behalf of the Board, I present the
Company’s Annual Report and Financial
Statements for the period from 1 January to
31 December 2024.
2024 has been a challenging year for the
Company and investment companies more
widely, with tough market conditions
continuing to impact trading activity and
valuations. Across the sector, discounts to
underlying net asset value have widened
during the period, and various
macroeconomic and market-specific events
have had a negative impact on overall
valuations.
Throughout 2024, the Company’s shares
traded at a sustained discount to NAV, and
over the period to 31 December 2024, the
Company’s audited NAV decreased to
$194.2 million.
The primary reason for this decrease is an
increase in discount rate assumptions.
This is partially attributable to movements in
base rates, but predominantly due to the
widening of equity risk premiums applicable
to US renewable energy assets (solar).
The results of the US federal election in
November 2024 and statements made by
the incoming administration during the
period influenced market dynamics and
increased discount rates relevant to the
Company’s valuation.
GILL NOTT
CHAIR
2024 has been a challenging year for
the Company and investment
companies more widely, with tough
market conditions continuing to
impact trading activity and
valuations. The Company has
remained proactive in addressing
issues within its control.
4
The Company has remained proactive in
addressing issues within its control and
during the period has:
– delivered on its commitment to return
capital to shareholders, which was
achieved via a tender offer that
concluded in June 2024, returning
$18.6 million to participating
shareholders;
– progressed a detailed analysis of options
available to the Company to refinance its
existing senior debt facilities and as a
result of such analysis, is taking steps to
conclude a refinancing expected to be
completed by the end of April 2025;
achieving multiple key objectives as
detailed below;
– initiated other strategies consistent with
the Company’s disciplined approach to
capital management, including resizing
the Company’s revolving credit facility
(RCF) and reducing the target dividend
on an interim basis to ensure the
robustness of the Company's
balance sheet;
– instigated multiple asset management
related activities intended to support
operational efficiencies and portfolio
performance, including replacing
underperforming operations and
maintenance subcontractors and
developing a master diagnostic and
remediation plan to strategically and
methodically address technical issues
impacting overall portfolio performance;
– continued to enhance the quality of
reporting and disclosures as well as
providing shareholders with regular
updates in order to increase
communication and transparency; and
– in furtherance of the Board’s succession
plan, and in direct response to
shareholder feedback, concluded a
recruitment process to select a new
Board member following the resignation
of Rachael Nutter, leading to the
appointment of US-based Mark Lerdal as
an independent Non-Executive Director.
FINANCIAL PERFORMANCE
Over the period to 31 December 2024,
the Company’s audited NAV decreased to
$194.2 million (31 December 2023: $258.2
million) and NAV per share to $0.63
(31 December 2023: $0.78).
The primary reason for this decrease was
an increase in discount rates to reflect US
market conditions. In addition, during the
period, approximately $18.6 million was
returned to shareholders. A detailed
explanation of NAV movements during the
period is included on page 26 of this report.
INCREASE IN DISCOUNT RATES
The increase in discount rate assumptions is
the result of market dynamics which have
negatively impacted asset valuations within
the US renewables sector. This fall in wider
asset valuations has been driven by multiple
factors. Incentives and stimulus provided in
the Inflation Reduction Act (IRA) enacted in
2022 accelerated the development of new
solar projects in the US. Anecdotally, this
inflated the valuation of development assets
and large-scale development platforms, to
the detriment of smaller platforms and
portfolios focused on operational assets.
Statements made by the President-elect
during his campaign for the November 2024
US federal election, and subsequently,
which contained anti-clean energy and
anti-IRA sentiments, have created near-term
uncertainties in the US renewable energy
market due to the wide array of potential
policy outcomes
12
.
Notable areas of uncertainty include the
extent to which the new administration will
modify existing federal programs (such as
those established under the IRA) aimed at
supporting renewables development in the
US. This uncertainty created headwinds
impacting confidence in near-term
renewables development including
(i) potentially longer development timelines
for early-stage projects placing pressure on
near-term cashflows and (ii) lack of capital
sources to fund development pipelines.
Among other consequences, this could lead
to US renewables developers and owners
pursuing strategies to recycle their own
capital, including selling off operational
assets adding to the supply of projects for
sale and depressing prices for operational
assets during 2025. Proposed tariffs
potentially impacting the supply chain for
renewable components also increased
uncertainty.
Collectively, the outcome is that higher
discount rate assumptions have been
applied by the Company’s independent
valuer, having an overall negative impact
on the Company’s 31 December 2024
valuation. The Board is of the view that
the decreased NAV resulting from the
movement in discount rates during the
period does not reflect the fundamental
long-term value of the Company’s assets.
12 An Executive Order entitled 'Unleashing American Energy' issued on the date of inauguration, 20 January 2025, followed up on statements made by the President-elect prior to and after
the US federal election November 2024, creating policy objectives which continue to create uncertainty within the US renewable market and more broadly. https://www.whitehouse.gov/
presidential-actions/2025/01/unleashing-american-energy/
5
US Solar Fund plc
Annual Report and Financial Statements 2024
OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
CHAIR’S STATEMENT CONTINUED
PORTFOLIO PERFORMANCE
Portfolio performance during the period
trailed expectations, with total portfolio
generation 9.0% below budget, due in part
to below forecast solar irradiance but
predominantly due to technical (non-weather)
related issues.
Performance during the first quarter of 2024
was materially impacted by below forecast
solar irradiance particularly impacting Milford
(the Company’s largest asset). Performance
during the second, third, and fourth quarters
of 2024 were materially impacted by
non-weather factors including losses due to
unscheduled outages and unscheduled
maintenance, and lower than forecast
inverter availability, resulting in lost
generation at key sites.
Among other objectives, the diagnostic and
remediation plan that has been developed
by the Investment Manager’s asset
management team during the period,
focuses on reducing the time taken to
identify individual outages, improving the
availability of replacement parts, and
reducing lead times for repair crews to
mobilise to site and complete repairs.
The plan also prioritises the analysis of more
substantive initiatives such as re-powering
at some of the Portfolio’s older sites.
In addition, steps taken to enhance data
collection, including in-housing of data
analytics, will continue to enable earlier
detection and remediation of issues.
Continuing to implement the diagnostic
andremediation plan is an ongoing priority.
The Investment Manager is confident in a
positive outlook for portfolio performance
as the diagnostic and remediation plan
continues to be implemented and expects
that the asset management initiatives
progressed during 2024 will result in
improved performance in 2025 and beyond.
CAPITAL MANAGEMENT
ANDREFINANCING
During the period, the Board reduced the
RCF from $40 million to $20 million. The
updated facility size reduced costs whilst
maintaining a smaller facility to support the
Company’s operational/ongoing liquidity
requirements, particularly given the
Company does not intend to make further
investments. During the period, and
currently, the RCF remained undrawn. The
Board will continue to assess the ongoing
need of the RCF.
The Board announced in April 2024 its
intention to carry out a potential refinancing
of existing debt facilities through the
long-dated financing available in the US
private debt markets. Based on subsequent
analysis, the Board determined a bank
refinancing to be a more attractive option
for the Company because of the greater
flexibility of refinancing terms. The proposed
refinancing will proactively address the near
and medium-term refinancings required in
connection with the Euryalus, Heelstone and
Milford portfolios, as well as improving
near-term distributable cashflow and
optimising the Company’s capital structure.
The Board expects the proposed refinancing
to conclude by the end of April 2025.
The Board and I maintain an optimistic outlook for the
Company because of its robust operational portfolio with
assets located in states which continue to support
renewable generation.
RETURN OF CAPITAL AND DIVIDENDS
Over the period, the Board delivered on its
previously stated commitment to return
capital to shareholders, which was achieved
via a tender offer which concluded in June
2024. The Company acquired approximately
7% of its issued share capital at a significant
premium to the prevailing market price,
returning $18.6 million to participating
shareholders.
Alongside the tender offer and consistent
with its objective to improve operational cash
dividend coverage, the Board determined it
was prudent to reduce the target dividend
on an interim basis to 2.25 cents per share.
During the period, the Company approved
$10.3 million in dividends, in line with its
interim annual dividend target. As previously
stated, the Board intends to revisit the
interim dividend target once the proposed
refinancing is concluded and the extent of
improvements to coverage are determined.
US Solar Fund plc
Annual Report and Financial Statements 2024
6
STRATEGIC REPORTOVERVIEW
Visit our Company website
https://www.ussolarfund.co.uk/
GOVERNANCE
Mark Lerdal was appointed as an
independent Non-Executive Director
effective as of 1 October 2024. Mark is
based in the US and has over thirty years of
experience in the energy and renewables
sectors with a long-standing track record of
realising value in the US solar market. The
Board now has two US-based directors with
extensive experience in the solar sector,
which has been invaluable during the recent
consideration of refinancing options and the
ongoing strategic exercise to maximise
shareholder value. Further information on the
recruitment process for Mark Lerdal and the
composition of the Board can be found on
page 55.
We have undertaken and continue to
engage in shareholder meetings to
understand views and reflect on options
available to the Company to maximise value
for our shareholders.
We have also closely monitored the activities
of the Company’s peers to ensure relevant
benchmarks are considered. We have
carefully reviewed recent trends within the
sector to change management fee
arrangements. Given the recent
appointment of the Investment Manager as
of 1 December 2023, on terms which were
presented at a general meeting of
shareholders in November 2023, the scale of
the Company, and its immediate objectives,
we do not consider that it would serve the
interests of the Company to change the
current management fees at this time.
DISCONTINUATION VOTE
Because the Company has traded at an
average discount to NAV in excess of 10%
over the course of 2024, the Company’s
Articles require that a special resolution be
proposed at the Company’s forthcoming
Annual General Meeting (AGM) on 20 May
2025, for shareholders to vote to wind up or
otherwise reconstruct the Company. If a
discontinuation resolution is passed, the
Company’s Articles provide the Board with
four months to put forward a proposal to
shareholders. Given worsening US market
conditions, the Board believes it would be
very difficult to achieve a realisation of the
Company’s assets other than at a distressed
price, and does not recommend a
discontinuation.
OUTLOOK
In spite of the uncertainties created by
the breadth of the Unleashing American
Energy Executive Order, the long-term
outlook for renewable energy in the US
remains strong on the back of state-level
mandates and the overall cost
competitiveness of renewable energy.
The Board and I maintain an optimistic
outlook for the Company because of its
robust operational portfolio with assets
located in states which continue to support
renewable generation. For existing
operational projects (such as the Company’s
portfolio), these are less likely to be impacted
by the new administration's policy objectives,
which appear to focus on development
assets rather than assets in their operational
phase. Trading conditions are likely to remain
positive for the Company, particularly if the
development of new renewable resources
fails to meet expected rising demand,
leading to price increases.
In respect of matters within our control,
we are confident that the long-standing
financial and technical expertise that resides
within the Investment Manager and its asset
management team will deliver shareholder
value through proactive management of
the portfolio and disciplined capital
management of the Company.
The Board continues to believe that the
current discount to NAV, driven by prevailing
market conditions, does not reflect the
underlying long-term value of the Company
and remains committed to preserving
shareholder value. The Board and
Investment Manager will continue to monitor
the market for comparable sales of
performing operational portfolios, with a
view to realising value from the Company’s
assets when the time is right. The current
volatile and uncertain market conditions
means that now is not the right time to
attempt a sale of the Company’s portfolio.
For this reason, the Board recommends
that shareholders vote against the
discontinuation of the Company at the
forthcoming AGM.
Thank you for your continued patience
and support.
GILL NOTT
CHAIR
9 April 2025
CORPORATE GOVERNANCE FINANCIAL STATEMENTS
US Solar Fund plc
Annual Report and Financial Statements 2024
7
WHY INVEST?
The Company’s investment objective is to provide investors
with attractive and sustainable dividends with an element of
capital growth by investing in a diversified portfolio of solar
power assets in North America and other Organisation for
Economic Co-operation and Development (OECD) countries
in the Americas.
80%
Over the next ten years,
approximately 80% of forecast
revenue will be generated
from contracted sources
MARKET OPPORTUNITY
40
of 41 assets within the Company’s
portfolio are certified as
Qualifying Facilities, and are
therefore eligible for favourable
treatment for revenue recontracting
Opportunity to invest in
the renewable energy
market in the US
– Portfolio of 41 operational
assets located in states that
are committed to policies
supportive of renewable
energy generation
– Long-term demand for
power supported by
increasing demand for
electricity
– The impact of potential
changes in US federal
energy policy arising from
the November 2024 US
federal election may benefit
existing operational solar
assets such as the US
Solar portfolio
INVESTMENT OPPORTUNITY
41%
As at 31 December 2024, the
Group’s Gearing*, calculated as
total debt outstanding to GAV,
was approximately 41%
– Stable cash flow profile
underpinned by long-term
power purchase
agreements (PPAs) with
investment grade offtakers
– Highly diversified portfolio
across locations and
counterparties
– Conservative capital
structure and mature
portfolio that is not reliant
on federal tax incentives
Freemont (Heelstone Portfolio)
6.4MW
DC
(North Carolina)
8
US Solar Fund plc
Annual Report and Financial Statements 2024
MARKET OUTLOOK
Solar generation continued to grow strongly during 2024.
New installations of solar generation assets of circa 50GW
DC
,
represented a 21% increase from 2023
13, 14
. The US renewables
market continues to be supported by;
– State and local mandates for renewable
energy generation. Mandated reductions
in carbon emissions from regional
electricity supply systems create binding
renewable procurement requirements for
local utilities and energy suppliers.
– Corporate sustainability objectives create
additional demand for renewable energy.
– Federal tax credits and other long
standing government incentives,
continue to provide funding support for
new projects.
– New technology such as battery storage
capacity allows system operators to
better manage and mitigate intermittent
renewable generation.
– Forecast load growth from the projected
build-out of data centres and growing
domestic investment in the onshoring
and reshoring of manufacturing capacity
in critical industries
15
.
State MW
DC
State mandates Utility targets
20
North Carolina 168 Net-zero emissions
electricity by 2050
Duke Energy: corporate target of 50% reduction in CO
2
emissions by 2030.
In Carolinas, aiming to reach 15GW of solar by 2038
Oregon 140 Net-zero emissions
electricity by 2040
Portland General Electric: corporate target of 80% carbon reduction by 2030
Utah 128 Voluntary goal of 20%
renewable by 2025
PacifiCorp: corporate target of ~70% reduction in system-wide carbon
emissions from 2005 level by 2030, and net-zero by 2050
California 7 60% renewable energy by
2030, and net-zero emissions
electricity by 2045
California Public Utility Commission: has identified a need for 57.5GW
ofnew solar capacity by 2045 to achieve stated emissions reduction targets
13 SEIA/Wood Mackenize Power & Renewables U.S. Solar Market Insight 2024 Year in Review. (Solar Market Insight Report 2024 Year in Review – SEIA).
14 Energy Information Administration Short-Term Energy Outlook, March 2025 (Short-Term Energy Outlook – U.S. Energy Information Administration (EIA)).
15 Grid Strategies (National-Load-Growth-Report-2023.pdf (gridstrategiesllc.com)).
16 See White House Executive Order “Unleashing American Energy” 20 January 2025.
17 LevelTen Energy, Renewable M&A State of the Market Report – H2 2024.
18 FTI Consulting, U.S. Renewable Energy M&A: Review of 2024 and Outlook for 2025.
19 LevelTen Energy, Q4 2024 North America PPA Price Index, (LevelTen Energy Q4 2024 PPA Index).
20 Sources: Duke Energy 2023 Carolinas Resource Plan (https://duke-energy.com); Portland General Electric: PGE 2023 Environmental, Social and Governance Report (https://portlandgeneral.com/);
PacifiCorp 2023 Integrated Resource Plan (https://pacificorp.com); CPUC 2023 Preferred System Plan (https://www.cpuc.ca.gov/).
Demand for renewable energy remains
strong. However, new development activity
continues to face headwinds created by
several factors including bottlenecks in
connecting to the grid, trade policy and
tariffs increasing the costs of imported
equipment, long order lead times for
key equipment, and resistance to new
development in urban and other
populated areas.
Additionally, recent executive orders and
policy statements issued by the new federal
administration
16
have introduced new
uncertainties to the US renewable energy
industry relating to potential changes to
federal energy policy and to renewable
energy tax credits, which could impact
new development activity.
M&A transaction volumes in the US
renewable energy market achieved a
modest improvement in 2024 compared to
2023 levels, albeit well below the levels
experienced in 2021–2022
17
. While some
market analysts expect US renewable
energy M&A transaction volumes to increase
again in 2025 versus 2024, the near-term
outlook remains “complex”
18
for all market
participants given the current uncertainties
relating to US energy policy and renewable
energy tax credits.
Average solar PPA prices rose across the
US in 2024, according to data from LevelTen
Energy
19
. Powerprices remain robust and
have consistently remained higher than the
historical lows experienced in 2019 over the
last 5 years.
The states in which the Company’s assets
are located, and its primary offtake
counterparties, continue to provide a
supportive backdrop for renewable
generation.
9
US Solar Fund plc
Annual Report and Financial Statements 2024
OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
OBJECTIVES
The Company’s financial, operational and
environmental highlights are set out on
pages 2 to 3.
AIIA’s objective as Investment Manager of
the Company is to provide ongoing advice
to the Board and shareholders on actionable
options to maximise shareholder value.
One such option is the sale of the
Company’s portfolio.
On an ongoing basis, the Investment
Manager evaluates (i) opportunities to
enhance the attractiveness of the Company
and (ii) prevailing market conditions and the
likely impact of such conditions on realising
the value of the Company’s assets, in each
case to ensure that the Company is in the
best position to access and transact upon
options that maximise shareholder value.
During the period, the Investment Manager
focused on (i), introducing asset
management initiatives to improve portfolio
performance and (ii) capital management
strategies to enhance the robustness of the
Company’s balance sheet.
REPORTING AND
DISCLOSURE
Improving the general
approach to disclosure
and providing information
to shareholders allowing
comparison across the
peer group.
Under the Investment Manager’s
guidance, USF has improved
disclosures and provided additional
information in its reports for the benefit
of existing and prospective
shareholders.
As part of increased transparency in
reporting, an operational dividend cover
has been included in addition to the
total dividend cover as previously
reported. A more detailed explanation
of the buildup of NAV and portfolio
movement bridge, enhancements to
the portfolio’s forecast cash
generation disclosures along with
clear disclosure on the fixed
elements of the revenue streams
are also included.
The Board believes that, during the period,
prevailing market conditions were not
conducive to the Company completing a
sale of the assets or the Company and a
such did not initiate a process to further
realise the value of the portfolio of assets.
The Board and Investment Manager will
continue to closely monitor changes to
market conditions that might suggest a
favourable environment capable of delivering
value to shareholders. Relevant market
indicators may include evidence of
comparable portfolios transacting at
appropriate valuations, a constructive
market dynamic for sellers of operational
assets (i.e.. supply exceeds demand), strong
trading volumes, a stable policy outlook, and
a more favourable interest rate environment.
In the meantime, the Investment Manager
will continue to act as a responsible steward
of the Company and its assets, and remain
focused on taking steps to optimise,
enhance and position the Company for a
future liquidity event which delivers value
toshareholders.
10
US Solar Fund plc
Annual Report and Financial Statements 2024
Cotten Farm (Heelstone Portfolio)
6.8MW
DC
(North Carolina)
COMMUNICATION
AIIA and the Board are
focused on improving
shareholder communication
and will seek to address
issues that are taking up
time and attention for
each shareholder.
Both the Investment Manager and the
Board are committed to providing
regular and transparent communications
to the Company’s shareholders.
ASSET
MANAGEMENT
Disciplined approach to
asset management
focused on decreasing
unplanned outages.
A diagnostic and remediation plan has
been developed by the Investment
Manager’s asset management team
and is now being implemented which
focuses on:
– Reducing the time taken to
identifyindividual outages
– Improving the availability of
replacement parts
– Reducing lead times for repair
crews to mobilise to site and
complete repairs
– Prioritising analysis of more
substantive initiatives such as
re-powering at some of the
portfolio’s older sites
Ongoing improvements to enhance
data collection, including in-housing
ofdata analytics, will continue to be
pursued to enable earlier detection
and remediation of issues.
The Board and Investment Manager
have taken a pro-active approach to
making changes aimed at improving
the asset management and asset
performance during the year. It is
believed that the improvements
made through 2024 should result
in improved performance in
2025 and beyond.
CAPITAL
STRUCTURE
The Investment Manager
and the Board are seeking
to optimise the current
capital structure to align
with the Company's stated
objectives of ensuring the
balance sheet remains
robust in the current
macroeconomic
environment.
The Board and the Investment
Manager have reduced the RCF from
$40 million to $20 million and will
continue to assess the ongoing need
for the RCF.
The Board announced its intention
tocarry out a potential refinancing in
April 2024. Following analysis, a bank
refinancing was determined to be
the more attractive option and is
expected to conclude by the end
of April 2025.
11
US Solar Fund plc
Annual Report and Financial Statements 2024
OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
PORTFOLIO OVERVIEW
41
Assets
4
States
443MW
DC
Total capacity
1
38
39
40
41
27
28
29
30
31
32
33
34
As at 31 December 2024 the
Company owned 41 utility scale
solar projects, totalling 443MW
DC
.
All assets in the Company’s portfolio
are operational and are generating
revenue for the Company.
California
The Company owns two solar
assets located in southern
California with a collective capacity
of 7MW
DC
. These assets comprise
a portion of the Heelstone portfolio
acquired by the Company as
operational assets in 2020.
2
Assets
7MW
Capacity
Utah
The Milford asset is the Company’s
single largest asset with a capacity
of 128MW
DC
. Milford was the
Company’s first investment
acquired in 2019, pre-construction,
and achieved commercial
operations in November 2020.
1
Asset
128MW
Capacity
Oregon
The Company owns ten solar
assets located in Oregon with a
collective capacity of 140MW
DC
.
These assets comprise the
Euryalus portfolio (four assets
acquired by the Company in 2020
pre-COD) and a portion of the
Heelstone portfolio (six assets
acquired by the Company as
operational assets in 2020).
10
Assets
140MW
Capacity
12
US Solar Fund plc
Annual Report and Financial Statements 2024
Assets by portfolio
MILFORD
1
Asset
128MW
DC
Capacity
EURYALUS
4
Assets
61MW
DC
Capacity
GRANITE
8
Assets
39MW
DC
Capacity
HEELSTONE
22
Assets
176MW
DC
Capacity
OLYMPOS
6
Assets
39MW
DC
Capacity
8
9
10
11
12
13
14
15
16
17
19
20
21
22
25
26
35
36
37
2
3
4
6
7
18
23
North Carolina
The Company owns 28 solar
assets located in North Carolina
with a collective capacity of
168MW
DC
.
These assets comprise the Granite
(eight assets acquired USF as
operational assets in late 2019/
early 2020) and the Olympos
portfolio (six assets acquired by the
Company in late 2019, pre-COD)
portfolios as well as a portion of
the Heelstone portfolio (14 assets
acquired by the Company as
operational assets in 2020).
28
Assets
168MW
Capacity
5
24
13
US Solar Fund plc
Annual Report and Financial Statements 2024
OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
PORTFOLIO OVERVIEW CONTINUED
#
Portfolio Asset Capacity (MWDC) Location Commercial operation date Acquisition date
Milford Milford 127.8 UT November 2020 September 2019
Olympos Benson 5.7 NC August 2020 December 2019
Olympos Eagle Solar 5.6 NC August 2020 December 2019
Olympos Lane II 7.5 NC July 2020 December 2019
Olympos Pilot Mountain 7.5 NC September 2020 December 2019
Olympos Tate 6.5 NC August 2020 December 2019
Olympos Willard 6.0 NC October 2020 December 2019
Granite Faison 2.3 NC June 2015 December 2019
Granite Four Oaks 6.5 NC October 2015 December 2019
Granite Nitro 6.2 NC July 2015 December 2019
Granite Princeton 6.5 NC October 2015 December 2019
Granite Progress Solar 1 2.5 NC April 2012 January 2020
Granite Progress Solar 2 2.5 NC April 2013 January 2020
Granite S. Robeson 6.3 NC July 2012 January 2020
Granite Sarah 6.3 NC June 2015 December 2019
Heelstone IX County Home 2.6 NC September 2016 March 2020
Heelstone IX Mariposa 6.4 NC September 2016 March 2020
Heelstone IX Freemont 6.4 NC December 2016 March 2020
Heelstone IX Sonne Two 7.0 NC December 2016 March 2020
Heelstone X Sedberry 6.2 NC December 2016 March 2020
Heelstone X Siler 421 6.9 NC December 2016 March 2020
Heelstone X Schell 6.9 NC December 2016 March 2020
Heelstone X Red Oak 6.9 NC December 2016 March 2020
Heelstone X Tiburon 6.7 NC December 2016 March 2020
Heelstone X Cotten Farm 6.8 NC November 2016 March 2020
Heelstone X Monroe Moore 6.6 NC December 2016 March 2020
Heelstone XI Granger 3.9 CA September 2016 March 2020
Heelstone XI Valley Center 3.0 CA December 2016 March 2020
Heelstone XII Turkey Hill 13.2 OR December 2017 March 2020
Heelstone XII Merrill 10.5 OR January 2018 March 2020
Heelstone XII Lakeview 13.7 OR December 2017 March 2020
Heelstone XII Dairy 14.0 OR March 2018 March 2020
Heelstone XII Chiloquin 14.0 OR January 2018 March 2020
Heelstone XII Tumbleweed 14.0 OR December 2017 March 2020
Heelstone XIII Davis Lane 7.0 NC December 2017 March 2020
Heelstone XIII Gauss 7.0 NC October 2018 March 2020
Heelstone XIII Jersey 7.0 NC December 2017 March 2020
Euryalus Alkali 15.1 OR June 2020 June 2020
Euryalus Rock Garden 14.9 OR June 2020 June 2020
Euryalus Suntex 15.3 OR June 2020 July 2020
Euryalus West Hines 15.3 OR June 2020 June 2020
41 PROJECTS ACROSS 4 STATES
1
2
3
4
5
6
7
8
9
10
11
15
12
13
14
19
16
17
18
20
21
23
22
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
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 as either a cogeneration facility or small
power production facility. In the case of the Company’s portfolio, its assets (other than Milford) are eligible small power production facilities,
being generating facilities with a production capacity of less than 80MW whose primary energy source is renewable. Among other benefits,
being a QF affords the asset owner certain rights to sell energy or capacity to a utility, the right to purchase certain services from utilities such
as back-up power at a reasonable rate, and relief from certain regulatory obligations.
14
US Solar Fund plc
Annual Report and Financial Statements 2024
127.8MW
DC
CAPACITY
278,781MWh
ANNUAL PRODUCTION (P50)
NOV 2020
COD
1
# OF PLANTS
Milford
1
Portfolio details
USF Acquisition September 2019 (from Longroad Energy Partners, LLC)
PPA Investment grade offtaker | Busbar PPA | MW Weighted Avg. Remaining Term:
21.4 years
19
| Unbundled
REC Agreement Investment grade offtaker | MW Weighted Avg. Remaining Term: 21.4 years
21
QF Eligible No
22
Site Control Long-term lease
Debt Mini-perm term loan + LC facility | Legal maturity 2027 | Outstanding balance $46.5m
21
Tax Equit y Yes. Scheduled buyout 2028.
21 As at 31 December 2024.
22 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 as either a cogeneration facility or small power production facility. In the case of the Company’s portfolio, its assets (other than Milford) are eligible small power
production facilities, being generating facilities with a production capacity of less than 80MW whose primary energy source is renewable. Among other benefits, being a QF affords the asset owner
certain rights to sell energy or capacity to a utility, the right to purchase certain services from utilities such as back-up power at a reasonable rate, and relief from certain regulatory obligations.
Olympos
5
6
3
2
4
7
Willard (Olympos Portfolio)
6.0MW
DC
(North Carolina)
Milford 127.8MW
DC
(Utah)
39MW
DC
CAPACITY
60,518MWh
ANNUAL PRODUCTION (P50)
JUL–OCT 2020
COD
6
# OF PLANTS
Portfolio details
USF Acquisition December 2019 (from Cypress Creek Renewables)
PPA Investment grade offtakers | Busbar PPA | MW Weighted Avg. Remaining Term:
9.3 years
21
| Unbundled
REC Unrated offtakers | Remaining term of 2.5 years
21
QF Eligible Yes
Site Control Long-term leases
Debt None
Tax Equit y Yes. Scheduled buyout 2025.
15
US Solar Fund plc
Annual Report and Financial Statements 2024
OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
PORTFOLIO OVERVIEW CONTINUED
Granite
Euryalus
21 As at 31 December 2024.
11
9
8
12
14
13
16
15
10
38
39
40
41
Four Oaks (Granite Portfolio)
6.5MW
DC
(North Carolina)
Suntex (Euryalus Portfolio)
15.2MW
DC
(Oregon)
39MW
DC
CAPACITY
46,279MWh
ANNUAL PRODUCTION (P50)
2012 (Progress Solar 1; South Robeson)
2013 (Progress Solar 2)
2015 (Faison; Four Oaks; Nitro;
Princeton; Sarah)
COD
8
# OF PLANTS
Portfolio details
USF Acquisition January 2020 (from Greenbacker Renewable Energy)
PPA Investment grade offtaker | Busbar PPA | MW Weighted Avg. Remaining Term:
5.5 years
21
| Unbundled
REC Agreement Rated and unrated offtakers | Remaining term of 6 years
21
QF Eligible Yes
Site Control Long-term leases
Debt None
Tax Equit y None (buyout completed 2020).
Portfolio details
USF Acquisition May 2020 (from Southern Current)
PPA Investment grade offtaker | Busbar PPA | MW Weighted Avg. Remaining Term:
7.1 ye ar s
12
| Bundled
QF Eligible Yes
Site Control Long-term lease
Debt Mini-perm term loan + LC facility | Legal maturity 2026 | Outstanding balance $34.3m
21
Tax Equit y Yes. Scheduled buyout 2025.
4
# OF PLANTS
61MW
DC
CAPACITY
105,333MW
DC
ANNUAL PRODUCTION (P50)
JUNE 2020
COD
16
US Solar Fund plc
Annual Report and Financial Statements 2024
Heelstone
Oregon
Granger (Heelstone Portfolio)
3.9MW
DC
(California)
45%
38
39
40
41
27
28
California
4%
North Carolina
25
24
20
36
16
23
21
18
17
19
22
37
35
51%
21 As at 31 December 2024.
177MW
DC
CAPACITY
294,772MWh
ANNUAL PRODUCTION (P50)
2016–2018
COD
22
# OF PLANTS
Portfolio details
USF Acquisition March 2020 (from Heelstone Renewable Energy)
PPA Investment grade offtaker | Busbar PPAs | MW Weighted Avg. Remaining Term: 7.4 years
21
| Bundled
REC Agreement Investment grade and unrated offtakers | MW Weighted Avg. Remaining Term: 6.7 years
21
QF Eligible Yes
Site Control Long-term leases
Debt Mini-perm term loan + LC facility | Legal maturity 2028 | Outstanding balance $63.9m
21
Tax Equit y None (buyout completed 2023).
17
US Solar Fund plc
Annual Report and Financial Statements 2024
STRATEGIC REPORTOVERVIEW CORPORATE GOVERNANCE FINANCIAL STATEMENTS
OPERATING REVIEW:
ACTIVE ASSET MANAGEMENT
PORTFOLIO
As at 31 December 2024, the Company has a portfolio with a total operational capacity of 443MW
DC
(31 December 2023: 329MW
AC
)
comprised of 41 solar assets across four states.
North Carolina 168
Oregon 140
Utah 128
California 7
PORTFOLIO GEOGRAPHY (BY MW
DC
)
<5MW 6
5–10MW 24
10–20MW 10
>20MW 1
ASSET SIZE IN MW (BY NUMBER)
<5 years 22
5–10 years 286
10–15 years 7
>15 years 128
TMEIC 43.3%
SMA 22.9%
Sungrow 20.0%
Eaton 5.8%
First Solar 35.8%
Trina 10.6%
Seraphim 9.5%
Astronergy 7.4%
Boviet 6.9%
Adani 6.8%
SolarWorld 3.5%
Hyundai 3.4%
Solar Frontier 3.2%
CSUN 3.2%
Hanwha Qcells 3.1%
Talesun 3.0%
ET Solar 1.6%
BYD 1.6%
Canadian Solar 0.6%
A- 7
BBB+ 436
REMAINING ENERGY PPA TERM
(BY MWDC)
ENERGY PPA OFFTAKERS (BY MW
DC
) SOLAR MODULES MANUFACTURER
(% MW
DC
)
INVERTERS BY MANUFACTURER
(% MW
DC
)
Note: includes energy offtake agreements only
(excludes standalone Renewable Energy Contract
(REC) Agreements)
Note: includes energy offtake agreements only
(excludes standalone Renewable Energy Contract
(REC) Agreements)
All near-term PPA expiries within the Company’s portfolio relate to assets that are QF under PURPA. At the appropriate time in advance
ofthese expiry dates, recontracting efforts will focus on outreach to existing utility offtakers to seek new offtake contract offers in
accordance with PURPA requirements as implemented in each applicable state. The Company’s next PPA expiries are scheduled in 2027.
All RECs in high value jurisdictions (California and Oregon) are bundled with existing long-term PPAs. The Company will seek opportunistic
recontracting of RECs in other markets as existing agreements expire.
Huawei 4.5%
Advanced Energy 1.6%
Schneider 1.6%
As at 31 December 2023
18
US Solar Fund plc
Annual Report and Financial Statements 2024
FY24
PORTFOLIO PERFORMANCE
Total generation by the Company’s portfolio
was 698GWh (versus 715GWh in 2023
excluding MS2). The overall generation of
the Company’s portfolio was 9.0% below
budget (versus 7.2% below budget in 2023),
with 2.9% attributable to below forecast
solar irradiance (versus 2.0% in 2023), and
6.1% attributable to unscheduled outages
and other non-irradiance related factors
(versus 5.2% in 2023), such as utility
grid outages.
Uncontrollable factors such as solar
irradiance and utility grid outages both
contributed to the higher levels of
underperformance in 2024 versus 2023.
Frequent, low impact unscheduled
outages, failures of inverters and other
electrical components were a key cause of
lost generation in 2024. Initiatives to
improve production and reduce the length
of unscheduled outages have been
enacted during the year.
‘Forecast’ means the generation forecast
per the base case (P50) generation
forecasts prepared for each project by
third-party technical advisors and inclusive
of assumptions relating to solar irradiance,
module efficiency and degradation,
scheduled downtime for maintenance
activities, and performance degradation
due to grid outages, and weather events
(e.g. snow), measured in gigawatt hours
(GWh).
‘Weather-Adjusted’ means the project base
case forecasts adjusted for actual solar
irradiance experienced at each project
during the applicable period, measured
in GWh.
‘Actual’ means actual measured production
in GWh.
QUARTERLY GENERATION VARIANCE (FY24)
148
135
131
244 244
240
768
136
234
746
132
212
698
121
Q1
Forecast Weather-Adjusted
Actual
Q2 Q3 Q4
GWh
0
800
600
700
400
500
200
300
100
PORTFOLIO GENERATION VARIANCE (FY24)
Heelstone Milford Euryalus Olympos Granite
0
50
100
150
200
250
300
GWh
282
271
102
59
53
277
260
99
59
50
246
255
99
54
45
Forecast Weather-Adjusted
Actual
234
Note: Figures may not sum due to rounding
19
US Solar Fund plc
Annual Report and Financial Statements 2024
OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
OPERATING REVIEW:
ACTIVE ASSET MANAGEMENT CONTINUED
The following chart shows the historical trend of generation performance related to weather conditions since IPO
23
10.0
5.0
0.0
-5.0
-10.0
Q2
2020
Q3
2020
Q4
2020
Q1
2021
Q2
2021
Q3
2021
Q4
2021
Q1
2022
Q2
2022
Q3
2022
Q4
2022
Q1
2023
Q2
2023
Q3
2023
Q4
2023
Q1
2024
Q2
2024
Q3
2024
Q4
2024
PORTFOLIO GENERATION VARIANCE FROM FORECAST DUE TO WEATHER (QUARTERLY)
Generation variance due to weather
Average
-1.5%
Average generation variance due to weather
% Variance to Forecast
Factors including actual irradiance, ambient temperatures, and performance specifications of solar modules contribute to variances in the
weather-adjusted generation of the portfolio in each period.
The portfolio was impacted by unfavourable weather during the period, particularly during the first quarter of 2024. Data provided by the
USNational Oceanic and Atmospheric Administration indicates that during 2024 Oregon, California and North Carolina experienced above
average precipitation, with “record warmest” average temperatures recorded across the United States.
The following chart shows the historical trend of generation performance related to technical and non-weather factors since IPO
23
.
20.0
0.0
-20.0
Q2
2020
Q3
2020
Q4
2020
Q1
2021
Q2
2021
Q3
2021
Q4
2021
Q1
2022
Q2
2022
Q3
2022
Q4
2022
Q1
2023
Q2
2023
Q3
2023
Q4
2023
Q1
2024
Q2
2024
Q3
2024
Q4
2024
PORTFOLIO GENERATION VARIANCE FROM FORECAST DUE TO NON-WEATHER (QUARTERLY)
Generation variance due to technical & non-weather
Average
-3.2%
Average generation variance due to technical & non-weather
% Variance from Forecast
NON-WEATHER RELATED PORTFOLIO PERFORMANCE
– Heelstone: Portfolio generation was approximately 11% below the weather-adjusted forecast, with the largest individual losses attributable
to multiple short-term utility grid outages at Dairy, which had been resolved by the end of the period, and intermittent feeder line outages at
Chiloquin within the portfolio’s Oregon sites. Site tracker failures, transformer outages, and inverter outages at Granger and Valley Center
within the portfolio’s California sites, and utility site communications issues in North Carolina affected Gauss. Assessment of potential
corrective actions for Chiloquin and Gauss remained ongoing at the end of the period, and certain inverter repair work at Granger and
Valley Center remained outstanding at the end of the period due to unavailability of spare parts
– Milford: Portfolio generation was approximately 2% below the weather-adjusted forecast due to slow supplier response times for
inverter outages
– Euryalus: Portfolio generation was in-line with expectations during 2024, with generation less than 1% below the weather-adjusted
forecast
– Olympos: Portfolio generation was approximately 10% below the weather-adjusted forecast, attributable to inverter outages across
the portfolio
23 Generation variances for Q1 2021 to Q4 2024 reflects the current 41 asset portfolio. Weather variances for 2020 reflect partial results given the Granite portfolio was acquired in Q1 2020,
theHeelstone portfolio was acquired in Q2 2020, the Euryalus assets commenced operations in Q2 and Q3 2020, and Milford commenced operations in November 2020.
20
US Solar Fund plc
Annual Report and Financial Statements 2024
– Granite: Portfolio generation was
approximately 9% below the weather-
adjusted forecast, attributable to
premature module failures at two sites
(that remain under ongoing warranty
claims with applicable module suppliers),
intermittent inverter outages at various
sites, and inverter part availability
lead times
ACTIVE ASSET MANAGEMENT AND
PORTFOLIO OPTIMISATION
During the year, the Investment Manager,
ledby its internal asset management team,
continued to implement various initiatives
targeted at reducing unscheduled outages
and generally improving the operating
performance of the portfolio. Examples
ofsuch initiatives progressed during the
yearincluded:
– Completion of an in-depth review of
Operations and Maintenance (O&M)
subcontractor performance across the
Company’s portfolio, including in relation
to the quality of maintenance
organisations, responsiveness to
unscheduled outages, and reporting
quality. This review resulted in the
replacement of the O&M subcontractor
for the Granite and Heelstone portfolios,
and progressing recontracting with the
existing O&M subcontractor for the
Euryalus portfolio
– Continued enhancement of data
collection, data analysis, and
management tools to improve the
collection of and insights gained from
data from the Company’s portfolio.
During the period, the internal asset
management team completed the
migration of data collection and tracking
to internal systems, and a software pilot
to improve remote site monitoring, both
of which are intended to improve the
oversight of third-party subcontractors
and strengthen internal reporting
– Commenced the analysis of projects
needing inverter replacements or other
capital expenditure projects that will
reduce outages and improve generation
– Initiated a refreshed Spare Parts Strategy
to limit unscheduled outages and
increase inverter reliability
Current priorities for the Investment Manager
in 2025 include:
– continuing to enhance data collection,
analytics and reporting of production
data across the Company’s portfolio to
enable accurate monitoring of
performance against forecasts and
inform prioritisation of O&M activities
and resources;
– strengthen spare parts management
across the Company’s portfolio including
increasing the inventory of long-lead time
and high failure parts, to support
maintenance effectiveness and initiatives
to reduce outage times;
– progress detailed assessments of site
repowering at selected sites within the
Company’s portfolio in California and
North Carolina; and
– continue with O&M subcontractor
performance reviews at Milford
and Olympos.
REVENUE
In accordance with the Company’s
investment policy, a high level of revenue
contracting is maintained across the
Company’s portfolio. Over the next ten
years, approximately 80% of forecast
revenue will be generated from contracted
sources. While the energy offtake
agreements in place for all of the Company’s
assets have fixed pricing with no escalation,
as is common in the US market, these
contracts provide substantial protection
against merchant price fluctuations over the
near-to-medium term.
Contracted revenue contribution over the
next ten years is illustrated in the chart
below.
As at 31 December 2024, existing offtake
contracting has a capacity-weighted average
remaining life of 10.9 years (down from 11.9
years as at 31 December 2023 due to the
passage of time). The Company expects to
seek recontracting opportunities for all
assets at the appropriate time closer to the
expiration of existing offtake agreements.
$60,000
$50,000
$40,000
$30,000
$20,000
$10,000
CONTRACTED REVENUE PROPORTION (US$’000S)
2025F 2026F 2027F 2028F 2029F 2030F 2031F 2032F 2033F 2034F
Contracted Revenue
Uncontracted Revenue
0
21
US Solar Fund plc
Annual Report and Financial Statements 2024
OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
OPERATING REVIEW:
ACTIVE ASSET MANAGEMENT CONTINUED
Market
Number of
assets
Capacity
(MWDC)
Share of total
capacity (%)
Average PPA term
remaining years
North Carolina 28 168 38.0% 6.8
Oregon 10 140 31.6% 6.7
California 2 7 1.6% 11.8
Utah 1 128 28.8% 20.9
Total 41 443 100% 10.9 (average)
North Carolina has the largest capacity by market, accounting for 38% of the total portfolio. Oregon and Utah account for 32% and 29% of the
portfolio capacity respectively.
Most of the solar assets in North Carolina and Oregon are expected to be recontracted in the next ten years. The assets in California have
longer durations on existing PPAs and would be recontracted in the mid-2030s. Milford, the solar asset in Utah is expected to be recontracted
in the mid-2040s. Further market information is included on page 9.
PORTFOLIO FINANCING
Tax equity was raised to support the construction of all assets within the Company’s portfolio.
As at 31 December 2024, tax equity partnerships and obligations relating to the Granite and Heelstone portfolios have been fully bought out in
accordance with original payment schedules (the Granite portfolio tax equity buy out completed in 2020 and the Heelstone portfolio tax equity
buy out completed in December 2023).
As at 31 December 2024, tax equity obligations remain active for the Milford, Euryalus and Olympos portfolios. The Company expects buyout
amounts in the order of approximately $2.6 million in 2025 and $3.5 million in 2028, which are considered in projected cash flows.
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
$,000s
FORECAST PAYMENTS TO TAX EQUITY ($’000S)
2025F 2026F
2027F 2028F
Forecast cash distributions to tax equity
Anticipated tax equity buyouts
US$’000s 2025F 2026F 2027F 2028F
Forecast cash distributions $4,200 $3,000 $3,000 $1,900
Forecast buyouts $2,600 – – $3,500
Non-recourse, portfolio-level debt is currently in place for the Milford, Euryalus and Heelstone portfolios, which collectively represent
approximately 82% of total portfolio capacity. Each of these facilities include amortising loans, and associated letter of credit facilities to
support collateral posting requirements. Both Olympos and Granite portfolios are unlevered, although provide collateral support to the
corporate revolving credit facility.
22
US Solar Fund plc
Annual Report and Financial Statements 2024
2046
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2045
2044
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
$,000s
DEBT AMORTISATION BY PROJECT ($’000S)
Milford
Heelstone
Euryalus
Milford
Heelstone
Euryalus
2,499 3,269 3,933 4,375 4,758 5,240 5,509 4,754 – – – – – – – – – – – – – – –
6,430 7, 2 8 0 7,5 3 5 7,777 7, 9 0 5 8,051 8,310 8,336 1,4 6 2 617 422 42 0 432 65 – – – – – – – – –
537 491 433 439 384 1,421 2,377 2,365 2,393 2,401 2,471 2,540 2,562 2,623 2,705 2,795 2,864 2,889 2,931 2,972 3,003 3,062 –
Outstanding portfolio-level debt is summarised in the table below:
Portfolio Loan type Outstanding loan balance LCs on issue Legal maturity Amortisation profile
Milford
Mini-perm term loan +
LC facility
$46.1m $12.2m
2027
(7yr term)
2020–2045
(25yr profile)
Olympos None – – – –
Granite None – – – –
Heelstone
Mini-perm term loan +
LC facility
$58.6m $6.8m
2028
(7yr term)
2021–2037
(16yr profile)
Euryalus
Mini-perm term loan +
LC facility
$31.8m $4.5m
2026
(6yr term)
2020–2031
(11yr profile)
Total $136.0m $23.5m
A ‘mini-perm term loan’ is a loan where the amortisation period and the legal tenor of the loan are different. For example, the Company’s
portfolio-level facilities have longer amortisation periods aligned with the term of existing PPAs (see ‘Amortisation Profile’ in the above table),
whereas the legal tenors are for shorter periods (see ‘Legal Maturity’ in the above table).
‘LC’ means letter of credit, used to satisfy collateral posting requirements under the Milford PPA and to support debt service reserve
account requirements.
GEARING
As at 31 December 2024, the Group's
Gearing, calculated as total debt
outstanding to GAV, was approximately
41% (31 December 2023: 36%).
The amortisation schedule for the Milford, Heelstone and Euryalus debt is shown below.
23
US Solar Fund plc
Annual Report and Financial Statements 2024
OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
APPROACH
The Company looks to maintain an efficient
balance sheet, as well as identifying
opportunities to optimise the capital structure
of the portfolio to maximise returns.
OPERATIONAL PERFORMANCE
– During 2024, the portfolio generated
$44.9million of project revenues*
– International Financial Reporting
Standards (IFRS) loss for the year was
$34.8 million (31 December 2023: Loss of
$43.1 million). The loss was primarily the
result of the reduction in the overall
unrealised fair value of the Company’s
assets due to factors including increased
discount rates (driven largely by the
increase in risk premium used as part of
the valuation process) and changes to
underlying asset cash flow forecasts.
– During the year c.$18.9 million was
distributed on account of the tender offer
that concluded in June 2024 ($18.6 million
returned to shareholders and $0.3 million
of costs incurred by the Company in
administering the tender offer). This utilised
the remaining proceeds from the sale of
the Company’s interest in the MS2 asset
which closed in June2023
– The Company has now fully utilised
$53.2million MS2 proceeds as follows:
full repayment of the revolving credit
facility in 2023 ($4.5 million), tax equity
buyouts completed in 2023 ($3.2 million),
2023 dividend ($11.2 million), cash
collateral to comply with the rating
requirements of an offtaker ($10.4 million),
REC termination costs ($3.0 million),
Company operating costs ($2.1 million)
and the concluded tender offer
($18.9million)
CORPORATE DEBT FACILITY POSITION
– The Company has access through USF
Avon LLC (a wholly owned subsidiary
of the Company) to a $20.0 million RCF.
The RCF provides liquidity for capital
expenditures, working capital and general
corporate purposes
– The Company’s RCF was extended for
two years on 30 August 2023, and has a
maturity date of 22 September 2025
– The facility was undrawn as at
31December 2024
OPERATING REVIEW:
FINANCIAL MANAGEMENT
DIVIDENDS
– Dividends of 2.25 cents per share,
totalling $6.9 million have been achieved
for the financial year 2024 (December
2023 $18.8 million). During the period,
it was announced that dividends would
be rebased in order to be fully covered
by operational cash flows, with a target
dividend of 2.25 cents per share for the
financial year 2024. The 2024 dividend
target is forecast to be fully covered by
cash generated from operations
– Operational dividend cover for the
period was 1.10x (December 2023: 0.50x).
Dividend cover is calculated as
net operating cash generation* divided
by dividends paid in the year.
The operational dividend cover ratio
seeks to reflect the sustainability of the
level of dividends paid by looking at
underlying cash generation from the
portfolio, excluding one off items not
expected to be recurring in nature.
Total dividend cover*, which
includes one off cash flows not
expected to be recurring, was 0.57x
(December20230.95x)
Progress Solar 1 (Granite Portfolio)
2.5MW
DC
(North Carolina)
24
US Solar Fund plc
Annual Report and Financial Statements 2024
SUMMARY OF PORTFOLIO CASH GENERATION
$’m
Year ended 31 December
2024
Year ended 31 December
2023
Project revenue 44.9 46.7
Project operating expenses (13.3) (13.7)
Payments to tax equity (4.5) (7.1)
Portfolio debt expenses (13.8) (11.5)
Project cash flows after debt service 13.3 14.4
Management fees (2.5) (3.0)
Corporate operating expenses (3.1) (1.7)
Revolver interest and fees (0.1) (0.3)
Net operating cash generation (A) 7.6 9.4
One off cash flow adjustments (related to the strategic review, REC resolution,
gains on sale and carried forward reserves) (3.7) 8.4
Total cash generation (B) 3.9 17.8
Dividends payable for the year (C) (6.9) (18.8)
Total dividend cover (B)/(C) 0.57x 0.95x
Operational dividend cover (A)/(C) 1.10x 0.50x
ONGOING CHARGES
The ongoing charges ratio for the Company on recurring costs were 1.54% for 2024 (December 2023: 1.39%). Whilst the costs have
decreased in the year, this increased percentage reflects the impact of the decline in average NAV over the year to 31 December 2024 on the
costs base of the Company. The ratio has been calculated using the Association of Investment Companies (AIC) recommended methodology
and is set out in the table below.
$’m
Year ended 31 December
2024
Year ended 31 December
2023
Total administrative expenses per financial statements (3.8) ( 7.1)
Adjust for non-recurring costs (0.2) (3.1)
Total (3.6) (4.0)
Average NAV 233.9 287.5
Ongoing charges ratio 1.54% 1.39%
25
US Solar Fund plc
Annual Report and Financial Statements 2024
OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
0
50
100
150
200
250
300
NAV at
31 December
2023
US$m
NAV at
31 December
2023
Tender
Offer
Dividends
Paid
Changes in
macroeconomic
assumptions
Changes in
Operating and
Corrective
Maintenance
Assumptions
NAV return
(Loss)
Changes in
Merchant Curve
Changes in
Discount Rates
258.2
(18.9)
(10.3)
(15.9)
(48.2)
0.7
21.3
7.2 194.2
PERFORMANCE
Net Asset Value as at 31 December 2024
was $194.2 million (NAV per share $0.63),
representing a decrease compared to the
December 2023 NAV of $258.2 million (NAV
per share $0.78). Several factors contributed
to this overall decrease. Shareholder
distributions totalled $28.9 million, which
includes $10.3 million of dividends
recognised in the period and the $18.9
million (less $0.3 million costs) tender offer
which concluded in June 2024.
Underlying asset valuations were impacted
by an increase in risk free rates and the risk
premiums in the year, which resulted in an
increase in the discount rates used in the
valuation of the assets. There were also
changes in underlying asset forecasts
including changes in merchant curves and
operating cost assumptions. Further analysis
of the NAV movement is provided above.
TOTAL SHAREHOLDER RETURN AND
NAV TOTAL RETURN
The Company’s annualised TSR since
inception to 31 December 2024 was (44.3%)
(31 December 2023 total loss of (34.4%)).
The NAV total return from inception to 31
December 2024 was (13.4%) (31 December
2023: (1.7%)).
VALUATIONS
NAV BRIDGE
– During the period $18.9 million was
incurred in the tender offer that
concluded in June 2024: c.$18.6 million
was returned to shareholders and costs
of c.$0.3 million were incurred by the
Company in administering the tender
offer. This utilised the remaining proceeds
from the sale of MS2
– Distributions of $10.3 million were paid
toshareholders in the year
– The changes in operating assumptions
reflect the valuation impact of the
revisions made to revenue and cash flow
assumptions. This category includes the
change the cash flow assumptions for
expected revenue arising from the REC
contracts related to the Heelstone
Oregon assets which were entered into in
November 2023 under the direction of
the Company’s previous investment
manager. In isolation, these cash flows
amount to approximately $8 million.
Over the period, the Company has
increased its forecast spending on
corrective maintenance and management
of spare parts
– Macroeconomic assumptions including
changes to inflation and depositary rates
contributed to an uplift of $0.7 million to NAV
OPERATING REVIEW:
INVESTOR RETURNS
– Changes in the merchant curves
contributed an uplift of $21.3 million
to NAV
– The risk free rate used in the discount
rate for portfolio valuations is the US 20
year treasury yield has increased from
4.2% to 4.9% over the course of the year.
This increase resulted in a $19.7 million
reduction in FV. The remaining difference
is due to the widening of equity risk
premiums as a result of current market
conditions for small operational solar
assets and the uncertainty arising from
policy announcements that allude to
anti-clean energy and IRA sentiments
10
.
The weighted average discount rate
usedis 10.8% (December 2023: 8.8%),
the discount rates are presented on a
pre-tax basis
– The NAV return of $7.2 million reflects the
valuation impacts of cash distributions
from the underlying assets, RCF
reduction, timing impact of moving
forward the valuation date to 31
December 2024, net working capital and
other adjustments (including the payment
to be made as a result of the termination
of the Heelstone Oregon REC contracts)
NET ASSET VALUATION MOVEMENTS (US$m)
Note: Figures may not sum due to rounding
26
US Solar Fund plc
Annual Report and Financial Statements 2024
Projected Investment Receipts Anticipated Tax Equity Buyouts
$ 000’s
2025
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
2026
2027
2028
2029 2030
2031
0
PROJECTED CASH FLOWS FROM USF’S OPERATING PORTFOLIO
PROJECTS CASH FLOWS
The chart forecasts the operating cash flow
receipts as at 31 December 2024 based on
the current portfolio financial models.
The projections are provided on a post-tax
basis. The projections include project debt
service, tax equity buyouts, operating costs,
holding company costs, and estimated state
and federal tax payable based on the current
capital structure (i.e. prior to any refinancing).
The projections exclude investment
management fees. This chart is not intended
to provide profit guidance and actual
outcomes may vary from those presented.
West Hines (Euryalus Portfolio)
15.3MW
DC
(Oregon)
$194.2m
Net Asset Value 31 December 2024
$0.63
NAV per share
STATISTIC
STATISTIC
27
US Solar Fund plc
Annual Report and Financial Statements 2024
OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
(10.26)
(6.41)
(4.94)
(6.42)
(5.04)
(4.33)
(2.14)
(1.32)
9.29
7.6 7
6.38
5.92
5.55
3.98
1.89
1.31
Electricity production
(P90/P10)
Operating expenses
(+/- 10%)
Discount rate (+/- 1.0%)
Useful life (-/+ 3 years)
Inflation rate (-/+ 1.0%)
Electricity prices (-/+ 10%)
Operating expense
Inflation rate
(+/- 1.0%)
Tax rate (+/- 5%)
14.74%(16.27)%
(10.17)%
(7. 84)%
(10.18)%
(7. 99 )%
(6.87)%
(3.40)%
(2.09)%
12.16%
10.11%
9.39%
8.80%
3.00%
2.08%
6.30%
VALUATION PROCESS
The NAV approved by the USF Board takes
into account the overall valuations of
portfolio assets assessed by the
Independent Valuer on a semi-annual basis
as at 30 June and 31 December 2024.
These valuations form part of the NAV
calculation of the Company, which is subject
to review/audit respectively.
The Company engaged KPMG as the
Independent Valuer to calculate the fair value
of its assets. KPMG is one of the largest
valuation firms in the US with significant
experience in estimating the fair value of
solar and other renewable energy assets.
In line with USF policy, all of its operating
assets were externally valued at
31 December 2024.
The Administrator, in conjunction with the
Investment Manager, calculates the NAV and
the NAV per Ordinary Share, based on the
valuation range provided by the Independent
Valuer. This is submitted to the Board for its
approval. The valuation has been calculated
in accordance with Uniform Standards of
Professional Appraisal Practice (USPAP) as
applied to PV electricity generation systems
in the US.
Fair value for operational solar assets is
derived from a discounted cash flow (DCF)
methodology using pre-tax cash flows and a
pre-tax discount rate. In a DCF analysis, the
fair value of the assets is the present value of
the asset’s expected future cash flows,
based on a range of operating assumptions
for revenues and costs and an appropriate
discount rate range.
The Independent Valuer has reviewed a
range of sources in determining the fair
market valuation of the solar assets,
including but not limited to:
– discount rates publicly disclosed by the
Company’s global peers;
– discount rates applicable to comparable
infrastructure asset classes;
– quality of cash flow forecasts in terms
of operations;
– the level of gearing at each investment
level; and
– capital asset price model outputs and
implied risk premium over relevant
risk-free rates.
A broad range of assumptions are used in
valuation models. Where possible,
assumptions are based on observable
long-term historical market or market
observations. The budgeted operational
costs are based on technical data and the
implicit financing costs for leveraged
investments are based on market data.
The Company also engages technical
experts to provide a long-term electricity
price forecast which is a critical datapoint
used to forecast revenues.
VALUATION ASSUMPTIONS
AND SENSITIVITIES
The key assumptions the Directors believe
would have a material impact upon the fair
value of the investments are set out below.
A sensitivity analysis is used to assess the
impact of changes in key assumptions on
the fair value of the Company’s investments.
The sensitivities shown assume the relevant
input is changed over the entire useful life of
each of the assets, while all other variables
remain constant. All sensitivities have been
calculated independently of each other.
DISCOUNT RATE
Discount rates used in the valuation of the
portfolio are derived from long term
government bond yields, plus an investment
specific risk premium, reflecting the risk of
investing in that particular investment.
The discount rate also reflects the
Independent Valuer’s view of the
transactional activity in the relevant market
along with implied execution discount rates.
As at 31 December 2024, the weighted
average discount rate was 10.8%
(December 2023: 8.8%). The discount rates
are presented on a pre-tax basis.
The sensitivity demonstrates the impact of a
change in the discount rate applied to the
pre-tax, cash flows from all of the
Company’s assets as at 31 December 2024.
A range of +/- 1.0% has been considered to
determine the resultant impact on the
Company’s NAV per share and the fair value
of its assets. A sensitivity of +/-1.0% is in line
with discount rate sensitivities utilised by the
Company’s peers.
OPERATING REVIEW:
VALUATION METHODOLOGY
CHANGES IN CENTS PER SHARE
28
US Solar Fund plc
Annual Report and Financial Statements 2024
ELECTRICITY PRODUCTION
The Company’s assets are valued based
upon a forecast P50 solar energy generation
profile (being a 50% probability that this
generation estimate will be met or
exceeded). A technical adviser has derived
this generation estimate considering a range
of irradiation datasets, satellite and ground-
based measurements, and site-specific loss
factors including module performance
degradation, module mismatch and inverter
losses. These items are then considered in
deriving the anticipated production of the
individual solar asset (MWh per annum)
based upon a 50% probability of
exceedance.
This sensitivity estimates the impact on the
fair value of the assets and NAV per share of
a change of production estimates to P90
(90% probability of being exceeded) and a
P10 generation estimate (10% probability of
being exceeded).
As P10 generation estimates were not
independently obtained for each solar asset
around the time of the asset acquisition, the
Board has determined a proxy P10 estimate
for those assets by assessing the
relationship between the independently
determined P50 and P90 generation
estimates for each of the assets in the
Operating Portfolio (e.g. a one year P90
generation estimate might be 92.5% of a one
year P50 generation estimate, implying that it
is 7.5% lower than the P50 generation
estimate).
In determining the proxy P10 generation
estimate, the Board has assumed that the
relationship between a P50 generation
estimate and a P10 generation estimate is
the same as that between a P50 generation
estimate and a P90 generation estimate in
absolute terms. Therefore a one year P10
generation estimate by this methodology
would be 107.5% (i.e. 100% + 7.5%) of the
asset’s P50 generation estimate.
MERCHANT PERIOD
ELECTRICITY PRICES
Each of the Company’s assets have
long-term PPAs in place with creditworthy
offtakers. PPA prices are not impacted by
energy price changes. For the post-PPA
period of each asset, the Board uses
long-term electricity price forecasts that have
been prepared by market consultants in their
determination of the fair value of the
Company’s assets. These forecasts from
market consultants take into consideration
climate change related factors when pricing
the electricity price forecasts.
Long-term electricity price forecasts are
obtained every six months from two leading
independent power price forecasting firms
for each jurisdiction in which the solar assets
are located. The two most recent electricity
price forecasts from each firm are averaged
and provided to the Independent Valuer to
project the prices at which existing PPAs will
be recontracted. The averaging of curves
and providers is used to prevent the
valuation of the portfolio being unduly
influenced by one forecaster’s set of
assumptions; to mitigate potential forecaster
errors in a particular period; and to reduce
the timing risk inherent in valuing the
portfolio shortly before curve updates are
released. The Independent Valuer assesses
these forecast prices for reasonableness
against their own internal forecasts and
others in the marketplace.
The sensitivities show the impact of an
increase/decrease in power prices for each
year of the power price curve over the
remaining economic life after the conclusion
of the existing PPAs. A flat 10% increase/
decrease in market electricity prices from
forecasted levels over the remaining asset
life of all plants has been used in the
sensitivity analysis.
South Robeson (Granite Portfolio)
6.3MW
DC
(North Carolina)
29
US Solar Fund plc
Annual Report and Financial Statements 2024
OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
50
60
70
80
90
100
110
120
130
140
12/31/2024
6/28/2024
12/29/2023
6/30/2023
12/30/2022
6/30/2022
12/31/2021
6/30/2021
12/31/2020
6/30/2020
12/31/2019
6/28/2019
OPERATING EXPENSES
The operating costs of the Company’s assets
include annual O&M, asset management,
insurance expenses, land lease expenses,
major maintenance, and general
administration expenses. O&M and AM costs
are mostly contracted for periods of up to five
years; the costs of operations, maintenance
and asset management activities for the
assets covered by these contracts are
subject to change upon recontracting.
The Investment Manager carried out a
review of the operating costs in the
underlying financial models where the costs
were aligned with the most recent budgets
approved by the relevant asset management
teams. Costs that are not contractual have
been escalated at the Investment Manager’s
long term inflation forecasts.
The sensitivity above assumes a 10%
increase/decrease in annual operating costs
for all underlying assets and the resultant
impact on the Company’s fair value of
investments and NAV per share.
OPERATING LIFE
The useful operating life of a solar asset is
generally accepted by Independent Valuers
to be the lesser of the lease term for the
asset site and the independent engineer’s
assessment of the asset’s useful life.
The useful life assumption for each asset
is typically 35–40 years.
The sensitivity above assumes a three year
increase/decrease in the useful operating life
of the Company’s solar assets, and the
resultant impact on the Company’s fair value
of investments and NAV per share.
INTEREST RATE ON DEBT FACILITIES
Base interest rates on the Company’s drawn
amortising debt facilities are fully hedged for
the amortisation period of the relevant loan
which includes the initial term and one or
more subsequent refinancings. In general,
the amortisation period on term loans
matches the PPA term.
SHARE PRICE PERFORMANCE
AND DIVIDENDS
In line with the broader renewable energy
infrastructure sector
24
, and in the wake of
widespread macroeconomic volatility, further
compounded by the uncertainty created by
the Company’s strategic review and the
departure of the USF’s previous Investment
Manager, the Company’s share price traded
at a sustained discount to NAV. The share
price based on closing price as at
31 December 2024 was $0.43 representing
a 31.8% discount to the 31 December 2024
NAV (December 2023: 30.8% discount).
Dividends of $10.3 million were paid to
investors over 2024 (December 2023
$18.7million).
The graph below represents the Company’s
performance over the reporting periods
since the Company’s Ordinary Shares were
first listed on the London Stock Exchange,
and shows share price total return and net
asset value total return performance. The
share price total return exhibits share price
movement plus dividends assumed to be
reinvested since IPO. The NAV total return is
based on the NAV movement plus dividends
paid since the IPO.
All series are rebased to 100 at 16 April 2019,
being the date the Company’s shares
were listed.
TAX
The US imposes a tax on profits of US
resident corporations at a rate of 21%.
The sensitivity assumes the US corporate
tax rate increases/decreases by 5% (to
26%/16%) and shows the resultant impact
on the Company’s fair value of investments
and NAV per share.
OTHER VALUATION INPUTS
INFLATION
USF considers inflation in terms of potential
impact on cash flows from the existing
portfolio and NAV. Following a period of higher
inflation, there has been a gradual downward
trend which is expected to continue.
Higher inflation generally has a positive
impact on the Company’s NAV through
increased merchant pricing expectations,
but would be expected to negatively impact
the Company’s short to medium term
portfolio cash flows. This is a result of
increased costs, including insurance, wages,
equipment and other costs which may
materialise on expiry of short-term O&M and
AM contracts versus the more stable
revenue from USF’s long-term PPAs.
OPERATING EXPENSE INFLATION RATE
Where there are uncontracted operating
costs, the Investment Manager has
assumed these costs will be recontracted at
existing price levels, escalated in accordance
with long term inflation assumptions. The
sensitivity above assumes a 10% increase/
decrease in inflation rates applied to long
term operating costs for all underlying assets
and the resultant impact on the Company’s
fair value of investments and NAV per share.
OPERATING REVIEW:
VALUATION METHODOLOGY CONTINUED
24 -33.1% (weighted average) and -39.6% (simple average). (Morningstar, 28 February 2025).
SHARE PRICE AND NAV TOTAL RETURN
Share Price total return NAV total return FTSE All-Share Index total return
Index
30
US Solar Fund plc
Annual Report and Financial Statements 2024
RESPONSIBLE INVESTMENT
APPROACH
USF was established to contribute to global
efforts to address the impacts of climate
change and better manage the world’s
resources for present and future
generations. The Company is focused on
sustainability, both in its driving purpose as
an investor in solar generation capacity, and
also in the way the Company is managed.
In addition to USF’s sustainable
fundamentals, the Company seeks to
conduct its business in a sustainable way,
to ensure that its impact is positive and that
the risk of potential adverse impacts is
reduced or removed entirely. To do this, the
Company draws on several benchmarks
and frameworks to guide its approach to
Environmental, Social and Governance
(ESG) risk and opportunity management.
APPLICATION OF SUSTAINABILITY
FRAMEWORKS
Part of the process for data selection
involves using international sustainability
frameworks and reporting standards as
guidance. There are several frameworks
withwhich the Company aligns partially
(using the framework as a starting point
fromwhich to develop accounting practices)
or fully (complying with the framework
requirements). These are summarised below.
SUSTAINABLE DEVELOPMENT
GOALS (SDGS)
The Company supports the 2030 Agenda
for Sustainable Development adopted by the
UN Member States in 2015. Alignment with
the SDGs is a key part of the Company’s
approach to ESG integration. The Company
contributes towards the SDGs in two main
ways: the positive environmental and social
characteristics of its investments and its
approach to active asset management.
SUSTAINABLE FINANCE
DISCLOSURE REGULATION
The Company is not required to report
through the Sustainable Financial Disclosure
Regulation (SFDR) framework, and is not
currently aligned with full SFDR disclosures.
However, the Board and Investment
Manager recognise the value of the
framework broadly and the specific
relevance to EU based shareholders.
Since its 2019 IPO, USF has consistently
reported on ESG and sustainability
considerations throughout its interim and
annual reports. In February 2022, the
Company published its first annual
Sustainability Report covering 2021.
In March 2024, the Company published its
second Sustainability Report covering 2023.
These reports represent meaningful
alignment with the European Union SFDR by
providing Principal Adverse Impact (PAI)
data in the format prescribed in Annex 1 of
the Delegated Regulation (EU) 2022/1288
(the ‘Delegated Act’).
SUSTAINABILITY DISCLOSURE
REQUIREMENT
USF is not required to report in line with the
UK Sustainability Disclosure Requirements.
Notwithstanding that the rules do not directly
apply to the Company, the Board has a
strong commitment to clear and transparent
disclosures for investors and, working with
the Investment Manager, aims to comply
with the anti-greenwashing rule and
associated guidance.
TASKFORCE ON CLIMATE-RELATED
FINANCIAL DISCLOSURES (TCFD)
The Company is required to provide TCFD
disclosures in line with UKLR 9.8.6R of the
FCA Handbook. The disclosures on the
following pages summarise USF’s position
against all 11 of the TCFD recommendations.
The Company commenced reporting
against the TCFD framework in the 2021
Annual Report to further assist shareholders
and other market participants to review and
understand the Company’s consideration of,
and approach to, ESG and sustainability
risks and opportunities.
PARTNERSHIP FOR CARBON
ACCOUNTING FINANCIALS
The Partnership for Carbon Accounting
Financials (PCAF) is a global initiative that
encourages transparency within the financial
industry. The Company’s financed emissions
have been quantified in accordance with the
PCAF Financed Emissions Standard
25
,
which aligns with GHG disclosures set out
in the SFDR Principal Adverse Impacts as
well as the TCFD’s recommended metrics
for asset managers. This includes the
disclosure of investments-level Scope 1
and 2 Emissions, and this year, material
Scope 3 Emissions.
OTHER ESG FRAMEWORKS
The Company will continue to monitor other
developing ESG frameworks closely, such as
the EU sustainability reporting standards
drafted by the European Financial Reporting
Advisory Group (EFRAG) as part of the
Corporate Sustainability Reporting Directive
(CSRD). The Company will also closely
follow the developments of the International
Financial Reporting Standards Foundation’s
International Sustainability Standards Board
(ISSB) in their aim of establishing global
sustainability disclosure standards as well as
the Taskforce on Nature-related Financial
Disclosures (TNFD), which is a developing
framework for assessing nature-related
risks. The Company aims to provide
shareholders with disclosures required for
their own reporting purposes.
APPROACH TO RESPONSIBLE INVESTMENT DISCLOSURES
25 PCAF (2022). The Global GHG Accounting and Reporting Standard Part A: Financed Emissions. Second Edition.
31
US Solar Fund plc
Annual Report and Financial Statements 2024
OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
31
CONTRIBUTION TO THE SUSTAINABLE DEVELOPMENT GOALS
The Company draws on the SDGs to demonstrate the positive environmental and social
characteristics of its investments. This page highlights the primary SDGs that are supported
by the Company’s investments, alongside alignment of the full portfolio by fair value.
41
Solar powered plants in
the United States
443MWDC
Total portfolio capacity
c.1.3m
Solar panels generating
emissions-free electricity
698GWh
Electricity produced
year to date 2024
64,600
US equivalent homes powered
104,500
Equivalent US cars displaced
480,900t
Tonnes of CO
2
displaced annually
Portfolio alignment
to the SDGs
AFFORDABLE AND CLEAN ENERGY
The 41 solar power projects in USF’s portfolio had a combined
capacity of 443MW
DC
during 2024. This power replaces fossil-fuel
generated power, thereby displacing CO
2
e emissions. USF’s
41 assets were responsible for displacing the equivalent of 448,600
tonnes of CO
2
e in 2024, equivalent to powering 64,600 US homes
or removing 106,800 equivalent US cars from the road.
DECENT WORK AND ECONOMIC GROWTH
Solar farms create employment opportunities throughout their
lifecycle, from construction and installation to operation and
maintenance. These projects stimulate economic growth by
attracting investment, fostering innovation in the renewable energy
sector, and supporting local businesses involved in supply chains.
CLIMATE ACTION
Solar farms play a crucial role in combating climate change by
reducing reliance on fossil fuels and decreasing carbon emissions.
By generating clean energy, they help to mitigate the impacts of
climate change, such as extreme weather events, sea-level rise,
and disruptions to ecosystems and communities. Solar energy also
contributes to building climate resilience by diversifying energy
sources and increasing energy security.
INDUSTRY, INNOVATION AND INFRASTRUCTURE
Solar farms drive innovation in technology and infrastructure related
to solar energy generation, such as photovoltaic cell efficiency,
energy storage solutions, and smart grid technologies.
They contribute to the development of sustainable infrastructure
by expanding the renewable energy infrastructure and enhancing
energy access and reliability.
The statistics show the positive contributions the Company’s investments
are making in support of the SDGs described above.
RESPONSIBLE INVESTMENT CONTINUED
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US Solar Fund plc
Annual Report and Financial Statements 2024
FINANCED GHG EMISSIONS
APPROACH
The Company seeks to monitor GHG
emissions across its portfolio and support
decarbonisation initiatives where possible.
In current carbon accounting models,
ownership of GHGs associated with
investments and lending activities is
considered part of a financial institution’s
carbon footprint. Specifically, GHG protocol
accounting standards define these GHGs as
Scope 3 Category 15 investment emissions
or ‘financed emissions’.
Quantifying the financed emissions of the
investment portfolio is important for the
Company to help develop decarbonisation
strategies and to better understand its own
climate-related Transition Risks.
The Company has self-assessed the data
quality of its financed emissions, in line with
the PCAF approach, and has quantified a
weighted data quality score of 4.0 for its
portfolio GHG emissions (High Quality = 1
Low Quality = 5). Data is a combination of
primary data and estimated primary data to
inform greenhouse gas emissions for
the portfolio.
Scope 3 Financed emissions indicator Scope
31 December
2024
31 December
2023
Total attributed GHG emissions (tCO
2
e)
Scope 1 of investments
108 147
Scope 2 of investments
0 0
Scope 3 of investments
292 190
Total Scope 1, 2 and 3
400 337
Carbon footprint (tCO
2
e/£m invested)
Total
0.89 0.62
GHG intensity of investments (tCO
2
e/£m revenue)
Total
12.99 12.20
GHG emissions avoided
26
(tCO
2
e)
Total
448,600 480,903
PORTFOLIO EMISSIONS
As described on the following page, the
Company has applied the PCAF guidance to
calculate its total attributed GHG emissions
(the Company’s Scope 3 category 15
investment emissions). This includes the
Scope 1, 2 and material Scope 3 Emissions
of each investment, attributed to the
Company based on its proportional share of
the equity and debt in each investment.
The carbon footprint metric aligns with
PCAF’s ‘economic emission intensity’ and is
the Company’s total attributed emissions,
normalised by the total equity and debt the
Company invests across the portfolio.
For the GHG intensity of investments metric
the Company has applied the TCFD
recommended approach for calculating a
Weighted Average Carbon Intensity (WACI).
As shown in the figures below, the
Company’s financed emissions are
significantly lower than the emissions
avoided due to financing solar installations.
26 Emissions avoided have been calculated using the US Environment Protection Agency AVERT.
RESPONSIBLE INVESTMENT CONTINUED
33
US Solar Fund plc
Annual Report and Financial Statements 2024
OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
SUSTAINABLE FINANCE DISCLOSURE REGULATION
PRINCIPAL ADVERSE
IMPACT INDICATORS
The Company aims to minimise any negative
impacts that may arise from its investments.
In support of this aim, the Company has
expanded its data collection process to
include SFDR Principal Adverse Impact
indicators from 2022.
Although the Company does not follow the
format prescribed within the SFDR
Regulatory Technical Standards (RTS) for
considering Principal Adverse Impacts, it is
drawing on data collected to inform its
approach to asset management. These
disclosures apply to most of the investments
in the Company’s portfolio and are in line
with the definitions of the 14 core indicators
listed in Annex 1 of the Delegated Act, which
include nine environmental disclosures and
five social indicators.
Data covering the 2024 reporting period are
displayed quantitatively on the following
page. The definitions of these indicators and
calculation methodologies are in the
Appendix of the Sustainability Report.
EU TAXONOMY
The Company and its investments do not fall
within the EU Taxonomy regulation, either by
location or threshold. Whilst the Company is
not required to consider alignment with the
EU Taxonomy, it recognises the potential
benefit that Taxonomy disclosures could
provide to the Company’s shareholders.
As such, during 2025 the Company will
continue to explore the benefit of working
towards developing disclosures that may
support assessing whether the Company’s
investments are aligned with the EU
Taxonomy.
PAI indicators for the Company’s
investments covering the year are displayed
in a quantitative form below.
Milford 127.8 MW
DC
(Utah)
RESPONSIBLE INVESTMENT CONTINUED
34
US Solar Fund plc
Annual Report and Financial Statements 2024
Sustainability linked
indicator Metric Unit
31 December
2024
27
31 December
2023
Investment
GHG
emissions
28,29
Scope 1 GHG emissions
tCO
2
e 108 147
Scope 2 GHG emissions
tCO
2
e 0 0
Scope 3 GHG emissions
tCO
2
e 292 190
Total GHG emissions
tCO
2
e 400 337
Carbon footprint
tCO
2
e/£m invested 0.89 0.62
GHG intensity of investee companies
tCO
2
e/£m revenue 12.99 12.20
Share of investments in companies active in the fossil
fuelsector %
% 0 0
Share of non-renewable energy consumption and non-
renewable energy production of investee companies from
non-renewable energy sources compared to renewable
energy sources, expressed as a percentage of total energy
sources
% 0%
(production)
100%
(consumption)
0%
(production)
100%
(consumption)
Biodiversity
29
Share of investments in investee companies with sites/
operations located in or near to biodiversity-sensitive areas
where activities of those investee companies negatively affect
those areas
% 0 0
Water
29
Tonnes of emissions to water generated by investee
companies per million GBP invested, expressed as a
weighted average
Tonnes/£m 0 0
Waste
29
Tonnes of hazardous waste and radioactive waste generated
by investee companies per million GBP invested, expressed
as a weighted average
Tonnes/£m 0 0
Social and
employee
matters
30
Share of investments in investee companies that have been
involved in violations of the UN Global Compact (UNGC)
principles or OECD Guidelines for Multinational Enterprises
% 0 0
Share of investments in investee companies without policies
to monitor compliance with the UNGC principles or
OECD Guidelines for Multinational Enterprises or grievance/
complaints handling mechanisms to address violations
of the UNGC principles or OECD Guidelines for
Multinational Enterprises
% 0 0
Average unadjusted gender pay gap of investee companies
% N/A N/A
Average ratio of female to male board members in investee
companies, expressed as a percentage of all board members
% 25 20
Share of investments in investee companies involved in the
manufacture or selling of controversial weapons
% 0 0
27 PAI indicators cover 100% of the Company’s investments.
28 GHG emissions calculations are based on primary source data for 70% of the portfolio on a Fair Value basis, with estimates used for the remaining 30%. Where source data was not available,
theCompany will work with its supply chain over time to improve its data collection processes.
29 Attributed based on the Company’s share of each investments’ total equity and debt.
30 Share of investments based on Fair Value.
RESPONSIBLE INVESTMENT CONTINUED
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US Solar Fund plc
Annual Report and Financial Statements 2024
OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES
Climate change presents both transitional and physical risks to the Company’s investments. As such, it continues to be a high priority for the
Company. USF commenced reporting against the TCFD framework in the 2021 Annual Report to further assist investors and other market
participants to review and understand USF’s approach and consideration of ESG and Sustainability risks and opportunities. The disclosures
on the following pages were prepared in line with the recommendations of TCFD. USF has complied with UKLR 9.8.6R by including climate-
related financial disclosures consistent with 8 of the 11 Recommended Disclosures, explaining against Strategy (a, b and c).
The Company has not yet performed climate-related risk scenarios analysis which it recognises is needed to be compliant with Strategy
(a, b and c).
To address these shortfalls, the Company will work with its Investment Manager to continue to explore its internal capabilities by drawing on
specialised expertise, data analytics tools, and scenario modelling frameworks dedicated to assessing climate-related risks and opportunities
across our investment portfolio where economically viable. Additionally, the Company will explore engaging with industry experts,
stakeholders, and relevant regulatory bodies to ensure alignment with best practices and regulatory expectations.
GOVERNANCE
Disclose the organisation’s governance around climate-related risks and opportunities.
a) Describe the Board’s
oversight of climate-
related risks and
opportunities
The USF Board has overall responsibility and oversight of risks and opportunities, which includes climate change.
The Board consists of four independent Directors with diverse backgrounds, experience in various industries and
investment trusts, and demonstrated governance and stewardship skills. A summary of their skills and experience is set
out in the Corporate Governance section of the Annual Report. The experience of the USF Board, particularly around
governance, sustainability and clean energy, supports USF’s environmental credentials derived from its core business as
an investor and owner of utility-scale solar energy assets.
The Company’s policies, including those pertaining to sustainability, are reviewed by the Board and monitored on an
ongoing basis as needed. The Board and Investment Manager discuss risks related to climate change twice a year and
have ultimate oversight of the Company’s risk management framework. Climate change is also considered within the
Company’s risk register at each Board meeting. The Board considers the impacts of climate-related events through its
discussions with the Investment Manager, notably with respect to opportunities through the Company’s annual strategy
reviews and risks through the Company’s risk management framework.
USF’s Board has an Audit Committee whose function is to ensure that the Company maintains standards of integrity,
financial reporting, internal control and risk management systems and corporate governance. One of the main duties of
the Audit Committee is reviewing the risks facing the Company and monitoring the risk register. These include climate-
related risks. Meeting at least semi-annually, the Audit Committee is required to report formally to the Board on its findings
after each meeting on all matters within its duties and responsibilities.
The Board monitors and reviews performance of the portfolio on a quarterly basis and updates on climate-related data on
an annual basis.
RESPONSIBLE INVESTMENT CONTINUED
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US Solar Fund plc
Annual Report and Financial Statements 2024
GOVERNANCE
b) Describe management’s
role in assessing and
managing climate-related
risks and opportunities.
The Investment Manager monitors climate-related legal and regulatory developments in the US and globally and notes
the changing dynamics of weather patterns and local climates that may impact the day-to-day production of USF’s solar
projects. This data informs the investment and operating decisions of the Investment Manager who reports to the Board at
least quarterly on generation performance and any critical changes.
Amber’s Executive Committee is responsible for the stewardship of its business and affairs. The Executive Committee
discharges its sustainability responsibilities directly through its internal Risk Committee, ESG Steering Committee
and Corporate Social Responsibility Sub-Committee. The ESG Steering Committee is chaired by its Chief Operating
Officer. The Committee’s primary role is to integrate and strengthen its ESG considerations within investment and asset
management activities at a corporate level. The Investment Manager is supported by a dedicated ESG team, where the
Head of ESG was appointed in 2018. Amber’s ESG Committee will engage with USF Audit Committee and Management
Engagement Committee on climate change issues where relevant.
STRATEGY
Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses, strategy and
financial planning where such information is material.
a) Describe the climate-
related risks and
opportunities the
organisation has
identified over the short,
medium and long-term.
All of the Company’s investments are exposed to physical climate hazards of varying types and severity. Flood, extreme
wind and heat (leading to wildfire) and significant changes in insolation and precipitation are the most important hazards
for the Company’s portfolio. There is a risk that changing weather patterns due to climate change will impact electricity
production. For some investments, there is a risk that climate change and extreme weather may damage physical assets,
cause business interruption and create additional costs for maintenance and upgrades.
The Company recognises that the key climate-related opportunity impacting its business is the positive impact
and demand for renewable energy. USF was established to meet this demand and recognises that the pace of
transition to clean energy and the associated government policies in the US will impact the size of the Company’s
investmentopportunity.
However, the Company acknowledges that it is currently unable to provide a comprehensive disclosure of climate-related
risks and opportunities over the short, medium, and long term. The disclosure that has not been addressed pertains
to the detailed analysis and quantification of specific physical climate-related risks and opportunities over various time
horizons using scenario analysis.
This shortfall in disclosure arises due to several factors. Firstly, the complexity and evolving nature of climate-related risks
and opportunities require robust data collection, analysis, and scenario modelling, which necessitates additional time
and resources beyond what is currently available. Secondly, while the Company has initiated efforts to assess climate-
related risks and opportunities, we acknowledge that our methodologies and frameworks are still in development and
refinementstages.
RESPONSIBLE INVESTMENT CONTINUED
BOARD
The Board
has overall
responsibility
for ESG
considerations
and ensuring
that they are fully
integrated into
all aspects of
the investment
and asset
management
strategies.
AUDIT
COMMITTEE
The Company’s Audit and Risk Committee
supports the Company’s approach to ESG
disclosures and ensures all risk management
frameworks consider material ESG risks,
such as climate change.
INVESTMENT MANAGER
Amber’s Executive Committee, the
majority of whom sit on the Board
of Amber, is responsible for the
stewardship of Amber and oversees
the management of its business
and affairs, including the integration
of ESG. Amber has an established
ESG Steering Committee which is
chaired by its Chief Operating Officer.
The Committee’s primary role is to
integrate and strengthen its ESG
considerations within investment and
asset management activities,
and at a corporate level.
MANAGEMENT
ENGAGEMENT
COMMITTEE
The Company’s Management
Engagement Committee reviews the
effectiveness of ESG integration by the
Investment Manager.
37
US Solar Fund plc
Annual Report and Financial Statements 2024
OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
STRATEGY
b) Describe the impact of
climate-related risks
and opportunities on
the organisation’s
businesses, strategy and
financial planning.
The Company was established to take advantage of efforts to increase the share of renewable or clean energy in the
US. This is core to all business activities of the Company. The Company considers risks from climate change to be a
principal risk. The Company manages the impact of climate-related risk on both the production of its assets and the
stability of its cash flows, primarily through geographic diversification and by securing long-term PPAs to mitigate pricing
volatility risk. USF has a portfolio of 41 solar projects across four states in the US, using geographic diversification to
reduce the portfolio’s exposure to any one extreme weather or environmental event (i.e. wildfires, heavy rainfall, extreme
heat, heavy snowfall). The Company aims to minimise the impacts of medium-term climate-related risks including
generation performance of solar assets, ongoing maintenance costs and forecast merchant power prices on revenue.
This is actioned by undertaking sensitivity analysis, policy monitoring, engaging O&M contractors to respond to physical
risks (e.g. additional panel cleaning, vegetation management for fire risk reduction), improved grid monitoring, having a
geographic mix of asset locations and acquiring operating assets that have long-term PPAs in place (with a minimum
target PPA term of 10 years for each project or portfolio acquisition and a weighted average remaining PPA term of 10.9
years for the Company’s entire portfolio). Medium-term contracts are also entered into with O&M providers to provide
stability to maintenance costs.
In line with the disclosure listed above, the Company is unable to comprehensively describe the physical impact of
climate-related risks and opportunities on the organisation’s businesses, strategy and financial planning. The impact
has not been fully assessed as the Company is still in the process of establishing how to consider the potential impacts
of scenario analysis. To address this shortfall, the Company will work with its Investment Manager to enhance the
Company’s capabilities by drawing on specialised expertise, data analytics tools, and scenario modelling frameworks
dedicated to assessing climate-related risks and opportunities across our investment portfolio. Additionally, the Company
will explore engaging with industry experts, stakeholders, and relevant regulatory bodies to ensure alignment with best
practices and regulatory expectations. However, the Company notes its stated ambition to realise value over the short
term, and this will inform its approach to considering climate to that strategy.
c) Describe the resilience
of the organisation’s
strategy, taking into
consideration different
climate-related
scenarios, including a
2°C or lower scenario.
In 2022, USF used a sensitivity analysis to determine the impact of changes in key assumptions on the fair value of
the Company’s investments. Many of the key assumptions used are impacted by climate-related risks, particularly
electricity production and electricity prices which may be impacted by major environmental or weather events. Based
on the analysis, the Directors consider the changes in inputs to be within a reasonable expected range based on their
understanding of market transactions and current industry and insurer views on longer-term climate volatility.
High physical risk scenarios, considered over the useful life of the portfolio, associated with a 3–4ºC increase
intemperatures, included:
– Reduction in availability of assets due to severe weather events and flooding, wildfires linked to higher temperatures.
– Reduced operating life of assets resulting from climate-related risks.
To mitigate these risks, USF’s near-term cash flows are insulated from volatility in wholesale power prices because of its
long-term contracted cash flows. USF’s revenues from electricity sales are 100% contracted through the PPA period.
USF’s exposure to power price fluctuation is only after the PPA period, at which point the Company may choose to
recontract at the prevailing price. Equally, geographical diversification is essential for limiting physical climate change risks
for solar investments by enhancing resilience, mitigating weather-related disruptions, optimising resource utilisation, and
leveraging diverse market opportunities across different regions.
The Company’s climate-related risks and opportunities matrix recognises climate/weather risk, and this risk is assessed
relative to the whole suite of financial, operational, legal and regulatory risks faced by USF.
In line with the disclosure provided, the Company acknowledges its current inability to comprehensively describe the
impact of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning.
This limitation stems from the ongoing process of establishing how to consider the potential impacts of scenario analysis.
Specifically, the Company is exploring options to enhance its capabilities to assess the resilience of its strategy in various
climate-related scenarios, including a 2°C or lower scenario.
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES CONTINUED
RESPONSIBLE INVESTMENT CONTINUED
38
US Solar Fund plc
Annual Report and Financial Statements 2024
RISK MANAGEMENT
Disclose how the organisation identifies, assesses and manages climate-related risks
a) Describe the
organisation’s processes
for identifying and
assessing climate-
related risks.
The Board is ultimately responsible for the oversight and effectiveness of the Company’s system of internal controls and
for setting the risk appetite of the Company. The Board defines the level and type of risk that the Company considers
appropriate in accordance with the Company’s investment objective and investment policy.
As an externally managed investment company, the Company has contractually delegated day-to-day management of
the Company’s portfolio and risk monitoring to the Investment Manager. This means the Company is also reliant upon the
internal systems and controls of the Investment Manager and its other service providers to manage risk effectively.
The Investment Manager has designed an extensive risk management framework to identify, assess and manage principal
and emerging risks, which are reviewed with the Company’s Audit Committee semi-annually. This includes assessing both
the probability of occurrence and impact along with key mitigants. In the case of new or emerging risks and changes to
existing risks, assessment occurs as needed outside this semi-annual cycle in response to such new or emerging risks
or changes. The identification, assessment and management of risk are fundamental to the Investment Manager’s role of
managing the Company’s portfolio on a day-to-day basis.
USF’s Board and Investment Manager review and update the risk register twice a year, including assessing climate risks
as relevant based on legal and regulatory developments, industry reports and research and data gathered from its own
portfolio of assets. USF’s Sustainability Report is a valuable practice for the Board and Investment Manager to engage
with climate-related risks and opportunities, noting that USF was created to take advantage of investment opportunities in
the US arising from the decarbonisation of energy generation and usage. The Company considers existing and emerging
regulatory requirements.
This includes UK Sustainability Disclosure Requirements but also the proliferating regulatory environment in the US.
The Company notes the potential rollback of climate-related reporting at the federal level within the US being in
juxtaposition to state-led climate disclosure regulation in states such as California, Illinois, Colorado and New York.
The Board will explore approaches to assessing the physical risks of climate change, including adopting scenario analysis
methodologies. This proactive stance will enable USF to better understand and prepare for various potential climate-
related impacts on its assets and operations. By incorporating scenario analysis into its risk assessment framework, USF
aims to enhance its resilience and responsiveness to evolving climate dynamics, thereby safeguarding its investments and
contributing to long-term sustainability goals. This forward-looking approach underscores USF's commitment to prudent
risk management and responsible stewardship in the face of climate uncertainty. However, this should be balanced by the
potential cost of undertaking such analysis and how that aligns with investor requirements.
In addition, the Board will explore how to evolve its approach to managing climate risks at the asset level. Currently,
environmental site assessments are completed for all assets during due diligence including certification that all projects
comply with applicable local, state or federal law. Vegetation clearance is maintained at or below county regulations and in
accordance with insurance requirements.
b) Describe the
organisation’s processes
for managing climate-
related risks.
The Investment Manager’s asset management team is responsible for reviewing asset performance, operations and
maintenance and external asset management providers to ensure project-level environmental and climate risks are being
managed and mitigated at the project level, including design loading, geographic diversity, insurance, snow clearing and
panel cleaning. Further disclosure is included in the Principal Risks and Uncertainties section, including mitigants noted for
operational and climate related risks.
Materiality assessment is based on informed judgment taking account of both the probability of occurrence and the
potential impact of risks. The Company considers factors such as financial significance, stakeholder expectations, and
operational impacts when evaluating risks and opportunities. The Company's approach involves careful analysis and
consultation with stakeholders to determine the significance of issues to its solar investment portfolio.
c) Describe how processes
for identifying, assessing
and managing climate-
related risks are
integrated into the
organisation’s overall
risk management
The Investment Manager maintains an enterprise-wide risk register and updates are presented to the Board semi-annually
for review and updating. Climate-related risks are included in this framework with risk assessed in terms of likelihood of
occurrence, and potential impact. The USF Board and the Investment Manager are acutely aware of the significance of
climate-related risks in terms of the performance of individual assets, and the extent to which correlated events may have
an overall effect on the performance of the portfolio.
RESPONSIBLE INVESTMENT CONTINUED
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US Solar Fund plc
Annual Report and Financial Statements 2024
OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
METRICS
Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material.
a) Disclose the metrics
used by the organisation
to assess climate-related
risks and opportunities
in line with its strategy
and risk management
process.
The Company invests in and sells energy generated by its solar assets to energy offtakers, directly contributing to
renewable energy infrastructure and renewable power generation. The Company uses a variety of metrics to monitor
the contribution to mitigating climate change, including GWh of renewable energy generation, tonnes of carbon dioxide
emissions displaced and number of homes powered by clean energy
31
. The Company and Investment Manager considers
several metrics that relate to climate related risks and opportunities. At this stage, the metrics are used to manage a pool
of climate-related risks, rather than specific metrics for specific risks, including:
– Proportion of asset life and revenues with fixed price off-take agreements, which influences the extent to which changes
in merchant prices affects forecast cash flows and the portfolio valuation
32
– Generation performance to expectations, where variances are examined for root causes, including longitudinal climate-
related impacts on potential asset availability
33
– Regional diversification is a critical aspect of USF’s climate risk management with budget generation, revenue and NAV
spread across 41 projects and four states. Performance metrics for 2024 as follows:
State
% of Actual
Generation
MWh
34
% of Budget
Generation
MWh
34
% of Weather-
Adjusted Budget
Generation
MWh
34
% of Revenue
34
% of NAV
2024 2023 2024 2023 2024 2023 2024 2023 2024 2023
North
Carolina 30.7% 27.3% 31.5% 27.6% 30.7% 28.0% 33.1% 32.3% 51.8% 53.0%
Oregon 31.6% 27.1% 31.3% 27.4% 31.6% 27.0% 47.0% 35.8% 36.4% 34.9%
Utah 36.4% 31.9% 35.4% 30.8% 36.4% 30.4% 17.7% 18.4% 9.3% 10.0%
California 1.3% 13.7% 1.8% 14.2% 1.3% 14.5% 2.2% 13.5% 2.5% 2.1%
Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
The Company does not use an internal carbon price. As the Company has no employees, performance metrics are not incorporated into
remuneration policies. Board remuneration is fixed. Details of the fees paid to Directors in the period are set out in the Directors’ Remuneration
Report on pages 67 to 68.
b) Disclose Scope 1, Scope
2 and, if appropriate,
Scope 3 GHG emissions,
and the related risks.
Due to the nature of its business, the Company has no Scope 1 or Scope 2 greenhouse gas emissions. The Company’s
Scope 3 emissions primarily relate to the emissions of its investments (total of investment Scope 1, 2 and 3 emissions).
The Company seeks to monitor its Scope 3 investment emissions (financed emissions) across its portfolio and support
decarbonisation initiatives where possible. However, due to the nature of the Company’s investments, emissions
associated with the operation of its investments are considered a low risk.
During 2024, the Company’s Investment Manager undertook a data collection exercise to capture a complete set of
Scope 1, 2 and material Scope 3 emissions data for all of its investments. The Company requested Scope 1 and 2
emissions as a minimum from all of its investments, along with Scope 3 emissions where available. Amber collected
comprehensive GHG activity data (e.g. mobile fuel usage), which was used to quantify Scope 1, 2 and 3 emissions
using its bespoke carbon tool.
The Company’s financed emissions were quantified, on an operational control basis
35
, in accordance with the PCAF
Financed Emissions Standard, which aligns with GHG disclosures set out in the SFDR PAIs as well as the TCFD’s
recommended metrics for asset managers.
This approach included the attribution of financed emissions to the Company using a ratio of the value of the Company’s
investment in relation to the total equity and debt of an investment, as set out in the PCAF standard. Further information
on this approach can be found in the Appendix.
31 Data disclosed on Page 32 of this report.
32 Data is for internal purposes and not disclosed due to potential market sensitivities.
33 Please refer to portfolio performance section of the Annual Report for more information.
34 Portfolio generation data includes the second tranche of MS2 from 1 January 2023 to 20 June 2023. As the divestment closed in late June 2023, it is excluded in from the NAV split
at31December 2023 but has been included in performance data through the transaction date.
35 A control approach can be subclassified as either financial control or operational control, and companies using the control approach must pick between these two options for reporting.
Using the operational control approach, an organisation shall account for 100% of emissions from operations over which it or one of its subsidiaries has control and the authority to
introduce and implement operational policies.
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES CONTINUED
RESPONSIBLE INVESTMENT CONTINUED
40
US Solar Fund plc
Annual Report and Financial Statements 2024
METRICS
b) Disclose Scope 1, Scope
2 and, if appropriate,
Scope 3 GHG emissions,
and the related risks.
continued
USF SCOPE 3 FINANCED EMISSIONS INDICATOR Scope 31 December 2024 31 December 2023
Total attributed GHG emissions
Scope 1 of investments
108 147
tCO
2
e
Scope 2 of investments
0 0
Scope 3 of investments
292 190
Total
400 337
Carbon footprint (tCO
2
e/£m invested)
Total
0.89 0.62
GHG intensity of investments
(tCO
2
e/£m revenue)
Total
12.99 12.20
Emissions avoided (tCO
2
e)
Total emissions avoided
36
448,600 480,903
c) Describe the targets
used by the organisation
to manage climate-
related risks and
opportunities and
performance against
targets.
As the Company’s core business is generating clean energy, the core performance metric is the amount (in GWh) of
electricity generated from its portfolio of utility scale solar projects. In addition, the following secondary performance
metrics are monitored to track the levels of CO
2
generated by the business, and the net CO
2
avoided by the renewable
power generated by the portfolio:
– tracking weather-adjusted performance of each plant
37
;
– tracking plant and grid outages and causes
37
; and
– CO
2
emissions displaced
38
.
USF’s portfolio comprises 41 operational solar plants and the portfolio was responsible for displacing an estimated
448,600 tonnes of CO
2
e emissions during 2024.
As the business’s whole operations are to invest in the generation of renewable energy, targets such as emissions
reductions are not deemed applicable at this point.
36 Emissions avoided have been calculated using the US Environment Protection Agency AVERT.
37 Please refer to portfolio performance section of the Annual Report for more information.
38 Disclosed on page 32.
RESPONSIBLE INVESTMENT CONTINUED
41
US Solar Fund plc
Annual Report and Financial Statements 2024
OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
RISK AND RISK MANAGEMENT
The Company is exposed to a broad range of events which have the potential to
disrupt the Company’s business model and/or adversely impact the Company’s
reputation, financial or operational performance. Utilising a well developed risk
management framework can mitigate the likelihood of occurrence and the
impact of such events.
The Board is ultimately responsible for the
oversight and effectiveness of the
Company’s system of internal controls and
for setting the risk appetite of the Company.
The Board defines the level and type of risk
that the Company considers appropriate in
accordance with the Company’s investment
objective and investment policy.
As an externally managed investment
company, the Company has contractually
delegated day-to-day management of the
Company’s portfolio and risk monitoring to
the Investment Manager. This means the
Company is also reliant upon the internal
systems and controls of the Investment
Manager and its other service providers to
manage risk effectively.
The Investment Manager has designed an
extensive risk management framework to
identify, assess and manage principal and
emerging risks, which are reviewed with the
Company’s Audit Committee semi-annually.
In the case of new or emerging risks and
changes to existing risks, assessment
occurs as needed outside this semi-annual
cycle in response to such new or emerging
risk or change. The identification,
assessment and management of risk are
fundamental to the Investment Manager’s
role of managing the Company’s portfolio
on a day-to-day basis.
Ongoing risk management at the asset and
Company level reduces both the likelihood
and impact of the principal risks that the
Company is exposed to. The Board
maintains a risk register that is subject to
annual review under the risk management
framework, with a focus on ensuring
appropriate controls are maintained and
implemented.
RISK CATEGORISATION
The Board and Investment Manager have
categorised the most relevant risks to the
Company into the following five key
categories:
(a) legal, regulatory and compliance risks;
(b) political risks;
(c) macroeconomic and market risks;
(d) operational risks; and
(e) climate-related risks (refer to disclosures
made in the Responsible Investment
section.
These key risk categories have not changed
during the period.
There have been no significant changes in
the nature or assessment of the principal
and emerging risks identified in the 2023
Annual Report.
During the period, the geopolitical
environment (including the continued
existence of major conflicts and territorial
tensions) continued to impact global
structures and relationships. The outcome of
the US federal election in November 2024,
and subsequent initiatives of the new federal
administration, have introduced significant
global uncertainty, impacting the stability of
financial markets generally and the US
renewable market specifically. While these
factors likely contribute to the ongoing
trading discount of the Company’s shares,
these factors have not directly impacted
performance of the Company’s portfolio.
Set out on pages 44 to 50 is a summary of
the principal and emerging risks along with
mitigants, which the Company considers the
most relevant given the nature of its
business. These risks are a subset of a
broader set of risks which are reviewed and
assessed on an ongoing basis at an asset,
portfolio and corporate level.
Each risk has been assessed as either
remaining the same, increasing or
decreasing over the period since
31December 2023.
42
US Solar Fund plc
Annual Report and Financial Statements 2024
PRINCIPAL RISKSRISK HEAT MAP
The diagram is a visual representation of the
principal and emerging risks summarised on
pages 44 to 50 mapped alongside their
probability of occurrence and impact.
A detailed analysis of each risk identified above is displayed overleaf in the
‘Summary of key principal and emerging risks and mitigants’.
Low
Medium High
PROBABILITY
Low Medium High
IMPACT
1
Changes in laws or regulations
2
Political and geopolitical risk
3
Long-term power price fluctuations
4
Interest rate risk
5
Inflation risk
6
Valuation of assets
7
Operational fraud
8
Access to capital from debt providers
andcompliance with existing debt and
taxequity obligations
9
Supply chain procurement risk
10
Counterparty credit risk
11
Underperformance of the Solar Assets
12
Unfavourable weather conditions
13
Climate change or climate-related events
14
Cyber risk
15
Physical Asset
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
43
US Solar Fund plc
Annual Report and Financial Statements 2024
OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Summary of key principal and emerging risks and mitigants
a) LEGAL, REGULATORY AND COMPLIANCE RISKS
Risk Impact on Company Key mitigants Movement
1. Changes in laws or
regulations
Regulation changes may adversely
affect the business and performance
of the Company. This includes state
and federal laws and regulations
relating to the operation of renewable
energy and energy generation assets
within the four US states where the
Company’s assets are located.
The Company is sensitive to tax
changes for example, including but
not limited to income tax, investment
tax credits and tax restrictions on
renewables. An adverse change in tax
legislation may impact the Company’s
overall returns.
The Company is reliant on the
ongoing compliance by its Investment
Manager with regulations governing
its operations. Non-compliance by the
Investment Manager, or changes to
regulations that adversely affect the
operations of the Investment Manager
may disrupt the Company’s business.
– The Company and Investment Manager closely
monitor changes in legislation at both a federal
level and in the states where the Company’s
assets are located. The Company and Investment
Manager also consult with tax, legal and regulatory
experts as required.
– State legislation in each of California, North
Carolina, Oregon and Utah remains supportive of
renewable generation which is not expected to
change in the short or medium term.
– Potential changes to federal legislation
(including existing investment tax credit regimes)
foreshadowed in statements made by the
incoming administration prior to and after the US
federal election in 2024, were targeted at assets
which are in development, pre-construction or
under construction. As the Company’s assets are
all operational, it is not expected that changes to
these tax regimes would have a material impact to
the portfolio. There is a high likelihood of changes
in policy initiatives under the new administration
but the nature of such changes and subsequent
impacts on the business and performance of the
Company remains uncertain.
– As a registered investment advisor regulated by the
US Securities and Exchange Commission (SEC),
the Investment Manager is subject to a suite of
regulatory and compliance obligations applicable
to its role as Investment Manager to the Company.
Amber has a comprehensive framework to monitor
internal compliance, which provides comfort and
protection to the Company that the risk of non-
compliance is well mitigated.
b) POLITICAL RISK
2. Political and
geopolitical risk
Political risks often translate to
elevated political uncertainties and
have detrimental effects on investment
and currency markets.
Broader geopolitical risks influence
investment decisions and market
dynamics, having the potential to
undermine investor confidence
generally, and adversely affect the
Company’s investor base and share
price. Broader geopolitical risks may
also affect the Company’s ability to
procure certain spare parts which are
manufactured overseas, including
in China or by Chinese-owned
companies.
– The Company’s assets are located within host
states that remain committed to net-zero targets
and progressive policies compatible with
renewable generation. State based policies are
unlikely to materially change regardless of potential
changes to federal legislation or policies.
– Trade restrictions between the US and China and
other countries targeted by US Federal tariff and
trade policies and stated initiatives are being
monitored for potential impacts to the Company’s
supply chain in order to mitigate the risk of a supply
shortage for key operating components and
cost increases.
MOVEMENT:
Increase
No change
Decrease
RISK AND RISK MANAGEMENT CONTINUED
44
US Solar Fund plc
Annual Report and Financial Statements 2024
c) MACROECONOMIC AND MARKET RISKS
Risk Impact on Company Mitigant Movement
3. Long-term power
price fluctuations
PPA terms are generally shorter than
the expected useful life of solar assets
so price forecasts are used to estimate
the value of cash flows between PPA
expiry and the end of the asset’s useful
life. Lower or higher wholesale electricity
price forecasts can reduce or increase
the revenue that the solar assets are
expected to generate after PPA expiry,
thereby impacting asset valuations.
The Company secures revenue by acquiring assets
that have long-term PPAs in place (with a minimum
PPA term of 10 years for each project or portfolio
acquisition and a target weighted average PPA term
of approximately 15 years for the Company’s entire
portfolio at acquisition).
The Company continues to monitor changes in energy
price forecasts and ensures these are appropriately
factored into asset valuations. The Company averages
forecasted price curves from two reputable providers
over their most recent two periods (i.e., four curves in
total) to mitigate the impact on asset values from any
one forecaster changing views.
As of 31 December 2024, approximately 36%
oftheNAV is attributable to contracted cashflows,
withthe remaining balance attributable to
uncontracted cashflows, demonstrating the
substantial value provided by existing revenue
contracting within the portfolio, that is not exposed
topower price fluctuations.
4. Interest rate risk Corporate Debt Facility
The Company has debt facilities
with both fixed and floating interest
rates. The Company is also exposed
to interest rate risk through holding
variable rate bank deposits. As such,
changes in interest rates may have
a positive or negative impact directly
on the Company's net income and
consequently the profits of
the Company.
Valuation Discount Rate
Changes in interest rates may also
affect the discount rates used in the
valuation of the assets.
Movements in headline Central Bank
interest rates and the resulting effects
on government bond yields may directly
impact the discount rate used to value
the Company’s investments.
– The base interest rate for all amortising debt (namely
the debt facilities at Milford, Euryalus and Heelstone
as described on page 23) are fully hedged for
the term of the relevant loan, providing resilience
in the portfolio’s cash flows against movements in
interest rates
– The $20 million revolving credit facility has a floating
interest rate which is not hedged. The RCF is
available through September 2025 and remained
undrawn during 2024. The RCF is currently undrawn
– The Company does not bear interest rate risk on its
loan to USF Holding Corp. as the loan rate is fixed
for the duration of the loan facility
Future increases in market interest rates could
also lead to increases in discount rates used in the
valuation of the assets, and a resultant reduction
in NAV. Please refer to the interest rate sensitivities
provided on page 28 for further detail on this
exposure.
45
US Solar Fund plc
Annual Report and Financial Statements 2024
OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
c) MACROECONOMIC AND MARKET RISKS CONTINUED
Risk Impact on Company Mitigant Movement
5. Inflation risk Increases in inflation may result in
higher:
– operating and maintenance costs;
– revenues from higher spot and PPA
electricity prices;
– interest rates for servicing debt (refer
above); and
– discount rates for valuing equity in
existing projects.
The net impact of inflation on the
Company’s portfolio is uncertain
given such impact is determined by
multiple factors (including changes to
post-PPA revenue, O&M contractual
arrangements, prevailing O&M costs,
debt service costs and valuation effects
from higher discount rates).
– In the current elevated inflation environment, there
is greater uncertainty around how long high inflation
will last. In the US, there has been a gradual
downward trend since June 2022 which is expected
to continue. Informed by existing inflation, past
inflationary trends and the medium and long-term
inflation targets articulated by the Federal Reserve,
the Company has adopted what it considers to
be prudent assumptions for 2024, 2025 and 2026
onwards. Detailed sensitivity analysis is carried out
to test the impact on NAV of variations to these
assumptions (for further details see page 28)
– The Company has existing O&M contracts in place
which are partially or fully fixed fee contracts subject
to fixed annual escalators, which partially mitigates
the impact of increased O&M costs based on
increases in inflation above current forecasts. While
these contracts typically have two-five year terms,
which is a shorter term than for existing project
PPAs, the recontracting market for O&M services
is robust and is expected to provide the Company
with flexibility to recontract O&M on comparable and
competitive terms
– As presented in Valuation Methodology section the
portfolio valuation (NAV) has a positive correlation
with inflation. While USF’s existing long-term PPAs
provide price stability, these contracts are not
indexed with inflation and as such the Company will
not potentially benefit from increases in power prices
until these contracts come up for re-contracting,
albeit the overall impact on theportfolio remains
positive over the useful life of the portfolio
Please refer to the inflation sensitivities provided on
page 28 for further detail on this exposure.
RISK AND RISK MANAGEMENT CONTINUED
46
US Solar Fund plc
Annual Report and Financial Statements 2024
d) OPERATIONAL RISKS
Risk Impact on Company Mitigant Movement
6. Valuation of assets Valuations of the Company’s assets may
be under or overstated.
– The Company’s assets are valued on a quarterly
basis. The Company appoints an independent
valuation firm to undertake valuations of its solar
assets twice a year (valued as at 30 June and 31
December) and such valuations are rolled forward
by the Investment Manager (as at 31 March and
30 September)
– Valuations presented by the Investment Manager are
supported by comparative analysis of other market
transactions and confirmed by long term discounted
cashflow models. The valuations are reviewed and
challenged by the Board on a quarterly basis
– The Company publishes sensitivities showing
how the performance or valuation portfolio may
be affected by changes in various underlying
assumptions. Please refer to page 28 for further
detail on these sensitivities
7. Operational fraud The Company is potentially exposed to
financial losses from fraudulent activities
related to receipts from counterparties
or wholesale markets, or payments
made to vendors and suppliers.
– The Investment Manager maintains and adheres
topolicies, processes and controls designed to
prevent and detect fraud and other irregularities in
payment processes
– In addition, all of the Company’s assets are
operational and the majority of payments to
service providers are repeat payments flowing from
existing contractual arrangements with known
counterparties, further mitigating the risk of large
one-off payments to unfamiliar parties (such as may
exist during the construction phase of an asset’s life)
47
US Solar Fund plc
Annual Report and Financial Statements 2024
OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
d) OPERATIONAL RISKS CONTINUED
Risk Impact on Company Mitigant Movement
8. Access to capital
from debt providers
and compliance with
existing debt and tax
equity obligations
The Company may not be able to source
funding from suitable debt providers at
competitive terms and costs which will
introduce uncertainty and potentially
higher capital costs for the Company
when refinancing existing
debt arrangements.
The Company may be exposed to risks
from its contractual relationships in
relation to tax equity financing with any
tax equity partner.
– Three of the Company’s five portfolios have
amortising debt facilities – Milford, Heelstone and
Euryalus. While these facilities were all sized on
the basis of the long-term contracted cash flows
of each portfolio, these facilities will need to be
refinanced between 2026 and 2028. Risks relating
to future refinancings are reduced by the good
operational track record of the Company’s portfolio,
and conservative gearing across the overall portfolio
(both Olympos and Granite portfolios are presently
unlevered). The Investment Manager is actively
pursuing a bank debt financing of these facilities,
which will proactively address near and medium-term
refinancing requirements
– While tax equity financings were raised to support the
construction of all five of the Company’s portfolios,
subsequently tax equity partners for both the
Granite and Heelstone portfolios have been fully
bought out as expected. As of 31 December 2024,
active tax equity investments remain in place for
the Olympos, Euryalus and Milford portfolios, with
scheduled tax equity buyout dates between 2025
and 2028 respectively. The Company continues to
carefully monitor compliance for active tax equity
financingprovisions
– The Company’s $20 million USF Avon LLC corporate
revolving credit facility remained undrawn as of
31December 2024
9. Supply chain
procurement risk
The Company may inadvertently acquire
equipment that has been manufactured
with input from forced labour, modern
slavery, or other behaviours contrary to
the Company’s sustainability policy.
Supply chain disruptions can also
delay scheduled maintenance and
extend outages during unscheduled
maintenance events, resulting in
lost revenues.
In response to risks relating to procuring parts or
equipment impacted by forced labour or other factors
contrary to the Company’s sustainability policies, the
Company has adopted heightened due diligence
procedures for new counterparties/suppliers or where
material concerns arise.
In response to procurement delay risks, where feasible,
the Investment Manager works with O&M contractors
to hold adequate inventories of spare parts. In addition,
industry connections are maintained with component
manufacturers, engineering advisors and other industry
participants to enable the early identification
of potential supply chain issues.
RISK AND RISK MANAGEMENT CONTINUED
48
US Solar Fund plc
Annual Report and Financial Statements 2024
d) OPERATIONAL RISKS CONTINUED
Risk Impact on Company Mitigant Movement
10. Counterparty
credit risk
There is the potential for losses to be
incurred due to defaults by material
contract counterparties
The Company and the Investment Manager
diversify credit risk across multiple investment-grade
counterparties. No financial transactions are permitted
with counterparties with a credit rating of less than
BBB- from Standard & Poor’s or Baa3 from Moody’s
unless specifically approved by the Board.
The Investment Manager will continue to monitor credit
market conditions, including as they apply to PPA
counterparties.
There have been no material changes to the
creditworthiness of any of the USF counterparties
since 31 December 2023.
11. Under-performance
of the Solar Assets
The underperformance of solar
assets may lead to reductions in
energy generated and thereby a
reduction in revenue that the asset
would be expected to produce.
Underperformance can be caused
by both factors within the Company’s
control and influence (for example
maintenance plans and procedures),
and those entirely outside of the
Company’s control (for example
weather, and actions taken by
transmission and distribution utilities).
– Production forecasts utilised in the Company’s
budgeting process were prepared by reputable
third-party advisory firms, to provide assurance that
reasonable generation assumptions are utilised.
These production forecasts are subject to review if
prolonged, uncharacterised losses of a sufficiently
material level occurs at any of the Company’s assets
– The Company’s portfolio benefits from diversification
of geography (the assets are located across multiple
regions within the US impacted by different weather
patterns); technology; equipment manufacturers,
revenue streams and offtakers, meaning no
one single issue should itself compromise the
performance resilience of the Company’s portfolio
– The Company has engaged capable O&M
subcontractors to operate and manage the
performance of Company’s portfolio, overseen
bythe Company’s asset management resources.
The effectiveness of the asset management
oversight is further supported by ongoing investment
in data capture and analysis tools to more effectively
and quickly identify and address performance issues
that arise
Please refer to the generation sensitivities provided on
page 28 for further detail on this exposure.
12. Unfavourable
weather conditions
The Company may be exposed to a
lower-than-expected volume of revenue
generation produced by the solar assets
caused directly by unfavourable weather
conditions (such as low solar irradiation)
and indirectly via the risk of damage
to the Company’s assets or power
transmission infrastructure caused by
extreme weather events.
– The Company’s portfolio is diversified across a
variety of geographies, which provides a degree of
protection against location-specific weather systems
and low solar irradiance
– Project-specific generation forecasts are calibrated
to the historical and expected weather conditions at
each specific site
– The sensitivity of the Company’s NAV to deviations
from energy generation expectations is provided on
page 28
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US Solar Fund plc
Annual Report and Financial Statements 2024
OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
d) OPERATIONAL RISKS CONTINUED
Risk Impact on Company Mitigant Movement
13. Climate change
or climate-related
events
The Company may be exposed to lower
than expected revenue generation
caused indirectly via the risk of damage
to the Company’s assets or power
transmission infrastructure caused
by climate change of climate related
events.
– The Company’s portfolio is diversified across a
variety of geographies, which provides a degree of
protection against the occurrence and impact of
climate related events
– The Company’s exposure is mitigated through
appropriate insurance arrangements including
property insurance and business interruption
insurance. The Investment Manager works closely
with the Company’s insurer to ensure coverage is
appropriate to properly manage climate-related
events having regard to the location and other
asset specific factors. Identified climate-related
risks, which are evaluated by the Company’s insurer
annually on a per asset basis, and scored according
to proprietary climate modelling tools, include
flood, earthquake, wildfire, earth movement and
tornado/hail
14. Cyber risk The Company may be exposed
disruption to its operations caused
by a cyber attack (via a hacker or
virus) which may attempt to access
the IT systems of the Company, the
Investment Manager, the Administrator
or one of the project companies and
attempt to destroy or use asset or
Company data for malicious purposes,
as part of a targeted or random act.
The Company relies on those of its service providers,
principally the Investment Manager and Administrator,
which have procedures in place to prevent and detect
cyber attacks and have robust business continuity
plans in place.
15. Physical asset The Company may be exposed to
disruptions in operations, reductions
in generation and/or financial penalties
resulting from physical damage to the
Company’s assets or if the Company’s
assets cause damage or harm to its
users in some way.
– The Company’s exposure is mitigated through
appropriate insurance arrangements including
property insurance and business interruption
insurance. The Investment Manager works
closely with the Company’s insurer to ensure
coverage is appropriate to properly manage
physical risks faced by the Company’s assets,
and compliance with insurance requirements set by
the Company’s offtakers, grid operators and other
key counterparties
– All assets within the Company’s portfolio maintain
documented site security and controlled access
protocols, with O&M scopes including responsibility
for administering site access and maintaining the
integrity of site fencing and access controls
– Asset designs include circuit breakers and safety
switches that will isolate and disconnect a section of
an asset or an entire facility in the event of electrical
and/or system faults
– O&M and asset management subcontractors
maintain training requirements and health and safety
protocols for all on-site staff
RISK AND RISK MANAGEMENT CONTINUED
50
US Solar Fund plc
Annual Report and Financial Statements 2024
LONGER TERM VIABILITY
The Board is responsible for financial
reporting and controls, including the
approval of the Annual Report and
Accounts, the dividend policy, any significant
changes in accounting policies or practices,
and treasury policies including the use of
derivative financial instruments.
The Board of the Company is also required
to assess the long-term prospects of the
Company according to the AIC Code.
The Board has assessed the principal risks
facing the Company set out above over a
five year period, which it considers
appropriate given the long-term nature of the
Company’s investments and its long-term
planning horizon. The Board considers a five
year timeframe to be reasonable on the
basis that the Company is in the initial stage
of operating assets. The key risks facing the
Company have been individually assessed
by the Board. The likelihood and impact of
each risk on the Company prior to and after
specific risk mitigation controls have taken
place have been evaluated.
The Company owns a portfolio of solar
assets in the US that are fully constructed,
operational and generating renewable
electricity. As a result, it benefits from
substantially predictable and reliable
long-term cash flows and is subject to a set
of risks that can be identified and assessed.
Each solar asset is supported by a detailed
financial model at acquisition and
incorporated into the Company’s valuation
model for quarterly valuations, which are
independently reviewed every half year.
The Board believes the geographical
diversification within the Company’s portfolio
of solar assets helps to withstand and
mitigate many of the emerging and principal
climate, regulatory and operational risks the
Company is likely to face. The Company’s
revenues from investments provide
substantial cover to the operating expenses
of the SPVs, USF Holding Corp., and the
Company and any other costs likely to be
faced by any of them over the viability
assessment period. The Investment
Manager also prepares a rolling detailed
monthly two year short term cash flow
forecast to address and specifically consider
the sustainability of the dividends.
After assessing these risks, and reviewing
the Company’s liquidity position, together
with the Company’s commitments, available
but undrawn credit facilities, and forecasts of
future performance under various scenarios,
the Board has a reasonable expectation that
the Company is well positioned to continue
to operate and meet its liabilities over the
short term and the five year outlook period.
While the Board has no reason to believe
that the Company will not be viable beyond
the specified outlook period, it is aware that
it is difficult to foresee the viability of any
business, including the potential impacts of
climate related risks, over a longer period
given the inherent uncertainty involved.
As noted in the going concern statement in
the Directors’ Report the Directors have
considered the upcoming discontinuation
vote expected at the Company’s AGM
on 20 May 2025 in this assessment.
The current uncertain and volatile conditions
following the US election are not conducive
to the Company realising the value of its
assets and the Directors unanimously
recommend that shareholders vote against
it. The Board and Investment Manager will
continue to monitor the market for similar
assets as those held by the Company, with
a view to the realisation of value from the
Company’s assets when the time is right.
That time is not now based on prevailing
market conditions described in the Chair’s
Statement which are not conducive to a sale
for value.
Reflecting this view and initial feedback from
some shareholders (and considering the
75% threshold required) the discontinuation
vote is not expected to be passed. Should
the discontinuation vote be passed the
Directors would be required to put forward
proposals to shareholders at a general
meeting of the Company, to be held within
four months of the Discontinuation
Resolution being passed, to wind up or
otherwise reconstruct the Company, having
regard to the illiquid nature of the Company’s
underlying assets. Any such process given
the past strategic review, and to ensure
appropriate value is returned to
shareholders, would be expected to
ultimately conclude more than 12 months
after the balance sheet date but would
conclude within the viability period.
The assumption used in the Viability
Statement is that the vote will not be passed.
The Company has access through USF
Avon LLC (a wholly owned subsidiary of the
Company) to a $20.0 million RCF. The RCF
provides liquidity for capital expenditures,
working capital and general corporate
purposes until September 2025. The facility
is currently undrawn with no forecast
drawings expected. Whilst an ongoing
refinancing exercise continues across the
portfolio which is expected to replace the
facility (see page 6), as the current facility
expires in September 2025, for prudency
this has not been assumed to be available in
the viability assessment. The proposed
refinancing will proactively address the near
medium term refinancings required between
2026 to 2028 with the first debt expiring for
Euryalus in June 2026. The proposed
refinancing is expected to conclude by
the end of April 2025.
It is important to note that the risks
associated with investments within the solar
infrastructure sector, including elevated
inflation and climate related risks resulting in
unfavourable weather conditions for
extended periods, could result in a material
adverse effect on the Company’s
performance and value of Ordinary Shares.
When required, experts will be employed to
gather information, including tax advisers,
legal advisers, and environmental advisers.
GILL NOTT
CHAIR
9 April 2025
51
US Solar Fund plc
Annual Report and Financial Statements 2024
OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
SECTION 172
Section 172 of the Companies Act 2006
recognises that Directors are responsible for
acting fairly as between members and in a
way that they consider, in good faith, is the
most likely to promote the success of the
Company for the benefit of its shareholders
as a whole. In doing so, they are also
required to consider the broader implications
of their decisions and operations on other
key stakeholders and their impact on the
wider community and the environment.
Keydecisions are those that are either
material to the Company or are significant
toany of the Company’s key stakeholders.
The Company’s engagement with key
stakeholders and the key decisions that
were made or approved by the Directors
during the year are described below:
1. SHAREHOLDERS
The Board is accountable to the
shareholders for running the business of the
Company, making key strategic decisions
and all key service provider appointments.
As covered in the Corporate Governance
Report (pages 58 to 62), the Board
communicates with shareholders and
solicits their views where it considers it is
appropriate to do so including throughout
the strategic review process. The Board is
non-executive and independent and
delegates certain key activities, including the
day-to-day investment management and
asset management to the Investment
Manager, and administration and company
secretarial functions to the Administrator.
The Board works closely with the Investment
Manager, Company Secretary and its
Corporate Brokers, to ensure it is aware of
shareholders’ needs or concerns.
The Investment Manager liaises with
shareholders through specified reporting
of Company performance, strategy and
outlook at set dates in the calendar, as
well as ad hoc reporting of major
announcements, and sessions organised
by the Company’s brokers. In addition,
shareholders have the opportunity to meet
the Board at the AGM. The Board also
endeavours to respond to any written
queries made by shareholders during the
course of the period, or to meet with major
shareholders if so requested. In addition to
the formal business of the AGM,
representatives of the Investment Manager
and the Board are available to answer
specific questions a shareholder may have
from time to time.
2. LENDERS
The Company relies on Lenders in
connection with existing debt facilities.
TheCompany reduced its corporate RCF
during the period. The Company through
itsInvestment Manager works in close
coordination with Lenders and provides
project-level performance reports as well as
ad hoc reporting of major announcements
as required by the relevant financing
arrangements. This maintains a constructive
relationship with Lenders.
3. SERVICE PROVIDERS
The Company works with a number of key
corporate service providers, including the
Investment Manager, Administrator, Registrar
and Independent Auditor, who provide
services to ensure the smooth operation of
the Company, including in the case of the
Independent Auditor, periodic independent
review of financial statements. The Board
meets once a year to discuss and review the
performance of the key service providers.
The Board has regular contact with the two
main service providers: the Investment
Manager and Administrator through quarterly
Board meetings. The Independent Auditor
typically attends a number of the Audit
Committee meetings scheduled throughout
the year, to present their reports on the
interim review and annual audit.
The Company’s underlying project
companies also have project suppliers,
including O&M and external asset managers
While there are currently no projects under
construction, the Investment Manager’s
asset management team maintains
relationships with all project suppliers,
including landowners for leased sites, and
grid operators. The Company has no
employees, however the Board reviews
health and safety metrics from external
O&M service providers at each quarterly
Board meeting.
4. GOVERNANCE
The Board regularly considers how it meets
regulatory and statutory obligations and
follows voluntary and best-practice
guidance, including how any governance
decisions it makes impact its stakeholders
both in the short and long term. The AIC
shapes the influence of the growing listed
investment company segment in the London
market, and the Company seeks to apply
AIC guidelines where relevant to its
operations, including the 2019 AIC Code of
Corporate Governance.
5. PPA OFFTAKERS
The offtakers for the Company’s assets
provide the main source of revenue received
by the Company, and the Company requires
offtake agreements be entered into with
credit-worthy counterparties as part of its
investment mandate. The Company through
its Investment Manager maintains regular
contact with the PPA offtakers, including
through project-level performance and ad
hoc reporting. No offtaker is a related party
of the Board or Investment Manager.
6. LOCAL COMMUNITIES
The local communities within which the
Company’s projects are based provide local
support as well as human resources to work
on the project sites. The Company works
with landholders and city councils through
the Investment Manager, to resolve matters
including egress and access, erosion, and
land management issues.
Complaint handling procedures are in place
at all sites, with one minor complaint
received during the year. This was in relation
to access road re-grading at Chiloquin, part
of the Heelstone portfolio, which is
scheduled to be addressed when the
weather allows in 2025.
52
US Solar Fund plc
Annual Report and Financial Statements 2024
Section 172(1) Statement Area Comments and References
The issues, factors and
stakeholders the Directors
consider relevant in complying with
section 172(1)(a)-(f) and how they
have formed that opinion.
At each quarterly meeting, the Board receives a comprehensive report from the Investment Manager,
serving as the primary information source regarding subsections (a)-(f). Additionally, the Investment
Manager provides updates on specific customer, supplier, and contractor matters, including any
disputes. Corporate brokers also furnish updates at alternating quarterly meetings to ensure
awareness of existing and prospective shareholder concerns and an on ad-hoc basis raise any
material concerns. The Company’s risk register and reporting mechanisms facilitate the identification
of items pertinent to the Board’s Section 172(1) statement, and the Board actively engages the
Investment Manager in dialogue concerning stakeholder concerns and the optimal strategies for
addressing them to maintain positive engagement.
(a) The likely consequences of any
decisions in the long term.
The Board considers the likely long-term impacts of its decisions on key stakeholders given the
long-term nature of its investments. Refer to pages 58 to 62 – Corporate Governance Report.
(b) The interests of the Company’s
employees.
The Company has no employees.
(c) The need to foster the
Company’s business
relationships with suppliers,
customers and others.
Specific risks regarding the Investment Manager, Administrator and Lenders are set out above.
Please also refer to pages 58 to 62 – Corporate Governance Report and pages 44 to 50 – Risk and
Risk Management.
(d) The impact of the Company’s
operations on the community
and environment.
The impact of the Company’s operations on the local communities is set out above (refer to Principal
Risks and Uncertainties). Please also refer to Responsible Investment – pages 31 to 41.
(e) The desirability of the Company
maintaining a reputation for
high standards of business
conduct.
The Board aims to demonstrate excellence in stewardship and governance, and the independent
Non-Executive Directors set the tone for maintaining and enhancing the Company’s reputation.
This includes maintaining ethical behaviour and respecting the environment. The Audit Committee
complements the Board to ensure the highest standards of conduct, integrity, financial reporting,
internal control and risk management systems, and corporate governance. Refer to pages 58 to 62 –
Corporate Governance Report and pages 64 to 66 – Audit Committee’s Report
(f) The need to act fairly as
between members of the
Company.
The Company has a single class of Ordinary Shares and welcomes the views of shareholders.
The Company produces a complete set of results documents twice a year which are available on its
website, and senior members of the Investment Manager make themselves available to meet with
principal shareholders as soon as it is reasonably practicable to do so following a request. The Board
is kept fully informed of all relevant market commentary on the Company by the Company’s public
relations agency, as well as receiving relevant updates from the Investment Manager and Corporate
brokers. The Company reports formally to shareholders twice a year and will hold an AGM in London
on 20 May 2025 which shareholders will be able to attend, and members of the Board will be available
to answer questions from shareholders. The Company Secretary and Company Registrar monitor
voting at the AGM, and the results of voting at the AGM are announced by the Company promptly,
and other notices and information are provided to shareholders on an ongoing basis through RNS
announcements and on the Company’s website.
Shareholders may contact the Board through the Company Secretary, whose contact details are found
on page 101 – Key Contacts. Please also refer to pages 58 to 62 – Corporate Governance Report
53
US Solar Fund plc
Annual Report and Financial Statements 2024
OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
54
US Solar Fund plc
Annual Report and Financial Statements 2024
Rock Garden (Euryalus Portfolio)
14.9MW
DC
(Oregon)
SUMMARY OF INVESTMENT POLICY
OVERVIEW
The Company invests predominantly in utility-scale solar power
plants primarily in the United States, but it may also invest in other
OECD countries in the Americas.
The Company targets development, construction ready, in
construction, or operational solar power assets that are designed
and constructed to have an asset life of at least 30 years and are
expected to generate stable electricity output and revenue over the
lifespan of the asset.
The Company’s Investment Policy was changed by ordinary
resolution of the shareholders in accordance with the UK Listing
Rules on 17 November 2023. The changes were principally
clarificatory in nature, bringing the Company’s Investment Policy
into line with the market and its peer group as well as expressly
including late-stage development investments in scope for the
Company. The Investment Policy is summarised below and
available in full here: https://www.ussolarfund.co.uk/sites/default/
files/267093_us_solar_fund_circular_web.pdf
INVESTMENT PARAMETERS
Maintaining the performance of the existing portfolio is the
Company’s key focus.
Revenue exposure to merchant power prices is managed by
the Company with the appropriate use of PPAs, REC Agreements,
capacity contracts or other similar revenue contracts with
creditworthy (predominantly investment grade) private and public
sector offtakers. PPAs may be structured as physical electricity
contracts, contracts for difference, or other hedge-based
arrangements.
To the extent that a solar power asset generates electricity in
addition to volumes required under a PPA, such excess may be
sold into a wholesale market if available or the Company may
seek to sell such electricity to another offtaker under a short or
long-term contract.
To the extent attractive opportunities to expand the portfolio arise,
the Company may acquire, directly or indirectly, develop and/or
construct and operate solar power assets.
The inclusion of development stage assets will allow for greater
diversification of investments and facilitate opportunities for future
accretive growth of the Company. The Company will only target
late-stage development assets which, at a minimum, have secured
grid connection, planning approvals and appropriate revenue
arrangements, which minimises exposure to development risks
but maximises the Company’s competitive advantage compared
to mature asset acquisitions.
The Company expects that construction-ready or in-construction
solar power assets will be operational within 12 months from
commitment. As some offtakers execute PPAs more than
12 months in advance of the required commencement date, the
Company may commit to acquire assets which will be operational
more than 12 months from the time of commitment but seeks to
limit capital commitments before construction commences.
INVESTMENT RESTRICTIONS
In order to spread its investment risk, the Company has adopted
certain investment restrictions, in each case to be measured at
the time of the relevant investment, including:
– the Company may invest up to 30% of total assets in a
single asset;
– the Company may invest up to 15% of total assets in
development stage assets;
– the aggregate value of the Company’s investment in assets
under contract to any single offtaker will not exceed 40% of
total assets; and
– Solar assets in the US will represent at least 85% of total assets.
As a London Stock Exchange listed company, the Company is also
subject to certain restrictions pursuant to the UKLA Listing Rules.
55
FINANCIAL STATEMENTSOVERVIEW
US Solar Fund plc
Annual Report and Financial Statements 2024
STRATEGIC REPORT CORPORATE GOVERNANCE
BOARD OF DIRECTORS
BACKGROUND AND EXPERIENCE
Jamie is a chartered accountant and has 30 years’ experience in
fund management, banking and corporate recovery with a focus on
the infrastructure and solar sector. Jamie was previously a partner at
Foresight Group having joined in 2000. Between 2007 and 2018 he
had overall responsibility from inception for the group’s infrastructure
and solar business in the UK, Australia, Italy, Spain and the US.
As a member of the investment committee, he oversaw more than
100 solar projects representing the group’s approximately £1.5 billion
solar portfolio at the time and led the IPO of Foresight Solar Fund
Limited. Prior to Foresight, Jamie worked at PwC, Citibank
and Macquarie.
BACKGROUND AND EXPERIENCE
Gill has spent the majority of her career working in the energy sector,
including positions with BP. In 1994 she became CEO of ProShare,
a not-for-profit organisation promoting financial education, savings
and investment, and employee share ownership. She was a Non-
Executive Director of the Financial Services Authority from 1998 until
2004. Subsequently she has held numerous board roles, including
being a Non-Executive Director of Liverpool Victoria Friendly Society,
a leading insurer, and deputy chair of the Association of Investment
Companies. Gill has served as both a Non-Executive Director and
chair of a number of venture capital trusts and investment trusts.
She is currently chair of Premier Miton Global Renewables Trust plc,
PMGR Securities 2025 plc and Gresham House Renewable Energy
VCT 1 plc.
ROLE:
Chair | Member of the Audit Committee, Remuneration and
Nomination Committee and Management Engagement Committee
ROLE:
Chair of the Management Engagement Committee | Member of the
Audit Committee and the Remuneration and Nomination Committee
ROLE:
Member of the Audit Committee, the Remuneration and Nomination
Committee and Management Engagement Committee
ROLE:
Chair of the Audit Committee | Chair of the Remuneration
and Nomination Committee | Member of the Management
Engagement Committee
BACKGROUND AND EXPERIENCE
Mark is based in San Francisco, and is an experienced board director
with over thirty years’ experience in the energy and renewables
sectors. He began his career working with developers, including as
CEO of Kenetech, a large wind and alternative energy developer,
constructor and operator. Mark has held several other senior
renewables roles including Executive Chair at Leaf Clean Energy,
a renewable energy and sustainable technology investment firm
formerly listed on the AIM division of the London StockExchange.
Mark has a number of board/advisory roles including as an adviser to
Adapture Renewables and a board member of BluePathFinance.
BACKGROUND AND EXPERIENCE
Thomas has almost 30 years of experience originating and executing
financings and investments in energy and infrastructure assets.
Currently, Thomas is the Chief Executive Officer of ClearLight Solar
LLC, a residential solar platform backed by Blackstone Credit and
Insurance. Thomas previously served as the chief financial officer
for PosiGen Inc., a New Orleans based residential solar and energy
efficiency company focused on energy efficiency upgrades and
installation of solar on homes in low-income communities. Prior
to that, Thomas was the chief commercial officer at Vivint Solar, a
leading residential solar business in the US and held senior positions
at Santander Global Banking and Markets, First Solar and GE Capital.
Thomas is an elected director on the board of the Solar Energy
Industry Association, a non-profit trade association of the solar-energy
industry in the US.
GILL NOTT
NON-EXECUTIVE CHAIR
MARK LERDAL
NON-EXECUTIVE DIRECTOR
THOMAS PLAGEMANN
NON-EXECUTIVE DIRECTOR
JAMIE RICHARDS
NON-EXECUTIVE DIRECTOR
DATE OF APPOINTMENT:
15 February 2019
DATE OF APPOINTMENT:
1 October 2024
DATE OF APPOINTMENT:
29 June 2020
DATE OF APPOINTMENT:
15 February 2019
The Directors are responsible for the determination of the Company’s investment objective and policy and its investment strategy and have
overall responsibility for the Company’s activities, including the review of investment activity and performance and the supervision and
control of the Investment Manager. The Directors have delegated responsibility for managing the assets comprising the portfolio to the
Investment Manager. Further information on the Board is provided at www.ussolarfund.co.uk.
56
US Solar Fund plc
Annual Report and Financial Statements 2024
DIRECTORS’ REPORT
PRINCIPAL ACTIVITY AND STATUS
US Solar Fund plc was incorporated as a Public Company,
limited by shares, in England and Wales on 10 January 2019 with
registered number 11761009. The registered office of the Company
is The Scalpel, 18th Floor, 52 Lime Street, London EC3M 7AF.
Its share capital is denominated in US dollars (USD or $) and
currently consists of Ordinary Shares. The Company’s principal
activity is to invest in a diversified portfolio of solar power assets
located in North America and other countries forming part of the
OECD in theAmericas.
DIRECTORS
All Directors are Non-Executive Directors.
The Company maintains £20 million of directors’ and officers’
liability insurance coverage which was in place throughout the
period, and which continues in effect at the date of this report.
As at the date of this report, and in so far as each Director is aware,
there is no relevant audit information of which the Company’s
Auditors are unaware; and each Director has taken all the steps
that they ought to have taken as a Director in order to make
themselves aware of any relevant audit information and to establish
that the Company’s Auditors are aware of that information.
This confirmation is given and should be interpreted in accordance
with the provisions of s418 of the Companies Act 2006.
Details of the fees paid to Directors in the period are set out in the
Directors’ Remuneration Report on pages 67 to 68.
In accordance with UKLR 6.6.6(1)R, Directors’ interest in the
shares of the Company (in respect of which transactions are
notifiable to the Company under FCA Disclosure and Transparency
Rule 3.1.2(R)) as at 31 December 2024 are shown below:
Director
Ordinary
Shares
% of issued
share capital
Gill Nott 126,000 0.04%
Jamie Richards 18 5,112 0.06%
Mark Lerdal – –
Thomas Plagemann – –
SIGNIFICANT SHAREHOLDING
As at 31 December 2023, the Company was aware of or had
received notification in accordance with the Financial Conduct
Authority’s Disclosure and Transparency Rule 5 of the following
interests in 3% or more of USF’s shares to which voting rights
are attached:
Shareholder
Ordinary
Shares
% of total
voting rights
Weiss Asset Management LP 29,090,857 21.21%
39
CCLA Investment Management 23,0 87,5 40 7.5 0 %
Baillie Gifford 20,790,604 6.75%
Sarasin & Partners LLP 19,828,810 6.44%
Cantor Fitzgerald Asset
Management Europe 15,519,047 5.04%
Almitas Capital LLC 8,609,579 4.27%
40
Gravis Advisory Ltd 11,931,066 3.88%
Privium Fund Management BV 11,205,386 3.64%
Hargreaves Landsdown Asset
Management 11,173,4 41 3.63%
Metage Capital Ltd 9,710,944 3.15%
Since the year end, the Company has been notified of the following
changes in holding of voting rights in the Company:
Shareholder
Date threshold
crossed or reached
Total % of voting rights
Position of
previous
notification
Resulting
situation on
date threshold
was crossed
or reached
Weiss Asset
Management LP 9 January 2025 21.56% 22.21%
41
There have been no other changes notified to the Company in
respect of the above holdings, and no other new holdings notified,
since year end.
39 This comprises of 9.45% voting rights attached to Ordinary Shares and 12.11% voting rights through financial instruments.
40 This comprises of 2.8% voting rights attached to Ordinary Shares and 1.47% voting rights through financial instruments.
41 This comprises of 9.66% voting rights attached to Ordinary Shares and 12.55% voting rights through financial instruments.
57
FINANCIAL STATEMENTSOVERVIEW
US Solar Fund plc
Annual Report and Financial Statements 2024
STRATEGIC REPORT CORPORATE GOVERNANCE
GOING CONCERN
The Board has reviewed a set of financial projections of the cash
flow and distribution profile of the Company prepared by the
Investment Manager. The Board has assessed the prospects of
the Group by reviewing its short-term cash flow forecast which
covers a two-year period and completed a detailed assessment to
support the going concern conclusion for the 12 months following
the signing of the Annual Report. After assessing these risks, and
reviewing the Company’s liquidity position, together with forecasts
of the Company’s future performance under various scenarios,
the Board has a reasonable expectation that the Company will
continue to meet its obligations as they fall due for at least the next
12 months.
The Company has access through USF Avon LLC (a wholly owned
subsidiary of the Company) to a $20.0 million RCF. The RCF
provides liquidity for capital expenditures, working capital and
general corporate purposes until September 2025. The facility is
currently undrawn with no forecast drawings expected. Whilst an
ongoing refinancing exercise continues across the portfolio which
is expected to replace the facility (see page 6), as the current
facility expires in September 2025, for prudency this has not been
assumed to be available in the going concern assessment.
The proposed refinancing will proactively address the near medium
term refinancings required between 2026 to 2028 with the first
debt expiring for Euryalus in June 2026. The proposed refinancing
is expected to conclude by the end of April 2025.
Because the Company has traded at an average discount to NAV
in excess of 10% over the course of 2024, the Company’s Articles
require that a special resolution be proposed at the Company’s
forthcoming AGM, for shareholders to vote to wind up or otherwise
reconstruct the Company. If a discontinuation resolution is passed
(requiring the approval of at least 75% of the votes cast in respect
of it), the Company’s Articles provide the Board with four months
to put forward a proposal to shareholders. The Directors have
considered the upcoming discontinuation vote expected at
the Company’s AGM in their assessment of going concern.
Given current uncertainties in the US market, the Board believes
it would be very difficult to achieve a realisation of the Company’s
assets currently other than at a distressed price, and does not
recommend a discontinuation.
The Directors’ assessment of going concern included reflection of
this view and feedback from shareholders has been supportive of
realising value from the Company’s assets when market conditions
are conducive to a sale for value. Additionally, the discontinuation
vote proposed at the 2024 AGM was not passed. Should the
discontinuation vote be passed the Directors would be required
to put forward proposals to Shareholders at a general meeting of
the Company, to be held within four months of the Discontinuation
Resolution being passed, to wind up or otherwise reconstruct the
Company, having regard to the illiquid nature of the Company’s
underlying assets, and implementation of any such proposal would
be expected to extend beyond the current going concern period.
As such, and reflecting the Company’s strong liquidity position
noted above, the Board concluded that it is appropriate to adopt
the going concern basis of preparation in preparing these financial
statements. For further details on going concern please see note 2
of the Financial Statements.
2024 ANNUAL GENERAL MEETING
Shareholders are invited to attend the Company’s AGM to be
held at the offices of JTC, The Scalpel, 18th Floor, 52 Lime
Street, London EC3M 7AF on Tuesday, 20 May 2025 at 3:00 p.m.
TheAGM notice and explanatory notes are set out from page 102.
Those shareholders who are unable to attend the AGM in
person are encouraged to raise any questions in advance with
the Company Secretary at USSolarFund-CompanySecretary@
jtcgroup.com (please include ‘USF AGM’ in the subject heading
and include your name and shareholder reference number,
which can be found on your share certificate, proxy form or email
broadcast from the Company). To the extent that it is appropriate
to do so, we will respond to any questions received in a Q&A
which will be posted on the Company’s website, in advance of
the AGM. Please note all questions should be submitted by close
of business on Tuesday, 13 May 2025. If you are unable to locate
your reference number, please contact the Company’s Registrar,
Computershare Investor Services PLC on 0370 703 6253.
You may not use any electronic address provided in this section to
communicate with the Company for any purposes other than those
expressly stated.
Further, the Investment Manager will make available a presentation
to shareholders in advance of the AGM. The presentation is
expected to be available on the Company’s website
(https://www.ussolarfund.co.uk/) on Monday 12 May 2024.
RESOLUTIONS TO BE PROPOSED AT THE AGM
There are 14 resolutions being proposed at the forthcoming AGM,
10 as ordinary resolutions, including approval of the Annual Report
and Audited Financial Statements for the year ended 31December
2024, as well as approving the Directors Remuneration Report
contained within the 2024 Annual Report (Resolution 1 and 2).
Ordinary Resolutions require 50% of the votes cast, whereas
the four Special Resolutions require 75% of the votes cast to be
in favour of the relevant resolution, for that resolution to carry.
Resolution 14 a Special Resolution, is a Discontinuation resolution,
for which the Board unanimously recommends to vote AGAINST.
Further information on these resolutions as well as voting
recommendations is given in the Notice of AGM and explanatory
notes from page 102.
POLITICAL CONTRIBUTIONS
The Company made no political contributions during the period.
Signed by order of the Board
GILL NOTT
CHAIR
9 April 2025
US Solar Fund plc
Annual Report and Financial Statements 2024
58
CORPORATE GOVERNANCE REPORT
The Board reports against the Principles
and Provisions of the AIC Code of
Corporate Governance (AIC Code).
The AIC Code, which has been endorsed
by the Financial Reporting Council,
addresses provisions set out in the UK
Corporate Governance Code (the UK
Code), as well as including additional
provisions that are of specific relevance
to the Company.
The AIC Code is available on the AIC website
(https://www.theaic.co.uk/aic-code-of-
corporate-governance).
The Company has complied with the AIC
Code during the year under review, except as
disclosed below:
Provision 14: Due to the size of the Board a
Senior Independent Director has not been
appointed. The Chair and Investment Manager
maintain appropriate communication with
shareholders. If required, the other Directors
are available to shareholders. As the Board is
small, any issues are discussed and dealt with
by the Board as a whole. In the circumstance
that there would be any issues with the Chair,
the remaining Directors would deal with these.
There is a joint Remuneration and Nomination
Committee, where any evaluation of the
Board Chair’s performance, re-election, or the
recruitment of their successor is discussed.
THE BOARD
The Board currently comprises of Gill Nott
(Chair), Jamie Richards, Thomas Plageman
and Mark Lerdal.
All Directors are deemed independent of the
Investment Manager and biographical details
of all Board members are included on page 55.
The conditions of appointment of Directors are
available to shareholders upon request and are
also available on the Company’s website.
In accordance with the AIC Code, Gill Nott,
Jamie Richards and Thomas Plagemann will
retire at the forthcoming AGM and being eligible
will offer themselves for re-election. Mark Lerdal
will stand for election to the Board.
Full Board meetings take place quarterly and
the Board meets or communicates more
regularly on an ad hoc basis to address specific
issues. The Board has a formal schedule of
matters specifically reserved for its decision,
which includes but is not limited to: considering
recommendations from the Investment Manager,
ensuring the Company is delivering on its
strategy and monitoring performance against the
Company’s strategic objectives.
59
FINANCIAL STATEMENTSOVERVIEW
US Solar Fund plc
Annual Report and Financial Statements 2024
STRATEGIC REPORT CORPORATE GOVERNANCE
The Board has also established procedures whereby Directors
wishing to do so in the furtherance of their duties may take
independent professional advice at the Company’s expense.
All Directors have access to the advice and services of the
Company Secretary. The Company Secretary provides the Board
with full information on the Company’s assets and liabilities and
other relevant information requested by the Chair, in advance of
each Board meeting.
BOARD COMPOSITION DURING THE YEAR
During the year the composition of the Board changed.
At the start of the reporting period the Board comprised of
Gill Nott (Chair), Jamie Richards, Rachael Nutter, and Thomas
Plagemann. However, Rachael Nutter stepped down as a
Non-Executive Director, following the conclusion of the Company’s
AGM on 21May 2024.
As a result of this, a recruitment process was carried out and
Mark Lerdal was appointed as a new Non-Executive Director
on 1 October 2024. Details regarding the recruitment process
can be found in the below Remuneration and Nomination
Committeesection.
BOARD COMMITTEES
The Board has delegated a number of areas of responsibility to
its three committees: the Audit Committee, the Remuneration
and Nomination Committee and the Management Engagement
Committee. Each committee has defined terms of reference and
duties, which are available on the Company’s website.
THE AUDIT COMMITTEE
The Audit Committee consists of the full Board and is chaired by
Jamie Richards. Jamie is a chartered accountant and has recent
and relevant financial experience.
The Audit Committee typically normally meets at least three times
a year.
A full list of matters reserved for the Audit Committee is included
within the Audit Committee Report on pages 64 to 66.
THE REMUNERATION AND NOMINATION COMMITTEE
The Remuneration and Nomination Committee is comprised of the
whole Board and is chaired by Jamie Richards.
In accordance with the Committee’s terms of reference, no Director
is involved in any decisions with respect to their own remuneration.
The Company’s Remuneration policy was approved at the
Company’s AGM held on 24 May 2023 as part of the regulatory
three year approval process. Full details on this policy can be found
in the Remuneration Report on pages 67 to 68.
This Committee meets as required to consider, amongst other
things, the following:
– in conjunction with the Chair, setting the Directors’ remuneration
levels;
– considering the need to appoint external remuneration
consultants;
– the process for appointments;
– ensuring plans are in place for orderly succession to the Board;
and
– the development of a diverse pipeline for succession.
RECRUITMENT OF NEW DIRECTOR
As referenced in the Board Composition section of this report,
Rachael Nutter stepped down as a Director on 21 May 2024.
Upon Rachael Nutter’s resignation, Jamie Richards assumed the
positions of chair of the Remuneration and Nomination Committee
and Management Engagement Committee.
The Remuneration and Nomination Committee engaged in
an extensive recruitment campaign to find and appoint a new
Non-Executive Director. This involved establishing a detailed
specification for the role; various meetings and discussions
with the recruitment consultant appointed for the search, Trust
Associates; review of a long list of potential candidates, reducing it
to a short list of interviewees; and the interviewing of candidates.
Detailed examination was conducted for the specific skills and
experience required for a solar and renewable energy investment
company. The Committee evaluated the balance of skills,
knowledge and experience, considering all candidates on merit,
against objective criteria, and with due regard for the benefits
of diversity on the Board. Following the interview stage, the
Committee unanimously agreed to recommend Mark Lerdal to
the Board as the most qualified candidate.
Mark Lerdal was appointed as an independent Non-Executive
Director on 1 October 2024. He is based in San Francisco, US
and is an experienced board director with over thirty years’
experience in the energy and renewable sectors. Upon his
appointment, Mark assumed the role of chair of the Management
Engagement Committee.
DIVERSITY
The Remuneration and Nomination Committee is aware of the
Hampton Alexander Review on board gender diversity, the Parker
Review on ethnic diversity and the requirements of the FCA’s policy
statement on diversity and inclusion on company boards and
executive management.
The Board is chaired by Gill Nott, the Audit and Remuneration and
Nomination Committees are chaired by Jamie Richards and the
Management Engagement Committee is chaired by Mark Lerdal.
The Company has no employees beyond its Non-Executive Board,
with executive management provided by its Investment Manager.
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CORPORATE GOVERNANCE REPORT CONTINUED
GENDER IDENTITY AND ETHNIC BACKGROUND REPORTING AS OF 31 DECEMBER 2024
Number of
Board members
Percentage of
USF Board
Number of committee
chair positions
Number in executive
management at Amber
Percentage of
executive management
at Amber
Gender identity
Women 1 25% 0 9 45%
Men 3 75% 3 11 55%
Ethnic background
White British or other white
(including minority-white groups) 4 100% 3 18 90%
Mixed/multiple ethnic groups 0 0% 0 1 5%
Asian/Asian British 0 0% 0 1 5%
Black/African/Caribbean/Black British 0 0% 0 0 0%
Other ethnic group, including Arab 0 0% 0 0 0%
The Board currently comprises four members each serving their initial terms. The Company does not currently meet the diversity targets
set out in UKLR 9.8.6(9)R, in relation to the requirements that at least 40% of the individuals on the Board are women and at least one
individual on its Board be from a minority ethnic background. However, the gender diversity target was met during the period from
1 January 2024 to 21 May 2024 as the Board comprised of two female Non-Executive Directors and two male Non-Executive Directors.
The Board is aware of the importance and benefits of diversity including gender and ethnicity, as well as the increased focus on this area.
When recruiting new directors the Remuneration and Nomination Committee will consider a diverse list of candidates, and will continue to
prioritise diversity in future appointments, while ensuring any appointee is also the best candidate for the role and has a strong fit with the
rest of the Board and the Investment Manager. Following the recruitment process, Mark Lerdal was selected as the best candidate for the
role with over thirty years of experience in the energy and renewables sector.
DIVERSITY POLICY
In reviewing Board composition, the Committee considers the
benefits of all aspects of diversity including, but not limited to,
differences in knowledge and understanding of relevant diverse
geographies, peoples and their backgrounds including race
or ethnic origin, sexual orientation, gender, age, disability or
religion and national origin. Diversity also includes differences in
backgrounds, experiences, physical abilities, socio-economic
backgrounds, perspectives, thoughts, interests and ideas, in order
to maintain an appropriate range and balance of skills, experience
and background on the Board.
REVIEW OF BOARD REMUNERATION
During the year, the Remuneration and Nomination Committee
carried out a review of the Directors’ fees. This review was
supported by a peer group fee analysis report prepared by the
Company Secretary. Noting that, the Chair’s remuneration was
increased by 8% and the remaining Directors remuneration
was increased by 5% from 1 December 2023; the Committee
concluded that the current remuneration remained appropriate
and in line with the average remuneration paid by the Company’s
peergroup.
Details of the fees paid to the Directors during 2024 and the fees to
be paid in 2025 are set out in the Directors’ Remuneration Report
on pages 67 to 68.
Director
Annual fee
to be paid
in 2025
(£)
Annual fee
received
during 2024
(£)
Gillian Nott
(Director and Chair)
68,040 68,040
Jamie Richards
(Director and Audit Committee Chair)
55,125 55,125
Rachael Nutter
42
– 17, 25 5
Thomas Plagemann 44,10 0 44,10 0
Mark Lerdal
43
44,10 0 11,025
42 Rachael Nutter resigned following the Company’s 2024 AGM on 21 May 2024.
43 Mark Lerdal was appointed on 1 October 2024.
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STRATEGIC REPORT CORPORATE GOVERNANCE
BOARD EVALUATION
During the year, the Board undertook a formal internal annual
evaluation of its own performance by way of a questionnaire
which was completed by each Director. The assessment was led
by the Chair of the Remuneration and Nomination Committee,
Jamie Richards and along with the Chair of the Board, the results
were then discussed with the remaining Board members. It was
concluded that under the leadership of the Company’s Chair,
the Board performed well and worked effectively together to
achieve objectives in the best interests of the Company and its
shareholders. Each Director made a positive contribution, and the
Board was considered well balanced with no weaknesses in the
Board’s capabilities being identified.
EVALUATION OF THE CHAIR
The evaluation of the Chair was led by the Chair of the
Remuneration and Nomination Committee with contributions from
the other Directors. The Directors’ feedback showed that the Chair
effectively promoted a culture of openness and debate, facilitated
constructive Board relations and ensured all Board members
contributed effectively.
TENURE OF CHAIR AND SUCCESSION POLICY
The Board has adopted a policy on chair tenure and succession
planning. In line with this policy, the Chair should be in place for a
maximum of nine years. As stated in the AIC Code, the chairs of
investment companies differ to chairs of other companies which
means that the maximum tenure of nine years provided in the AIC
Code does not necessarily apply. However, to address the need
for diversity, the Board’s policy adopts a maximum nine year tenure
for the chair position.
The Board’s policy for succession planning is that there should
be forward-looking and detailed succession and refreshment
plans when proposing re-election of long-serving members.
Any member of the Board who has served for nine years will be
subject to a particularly rigorous review and evaluation process
to determine whether they remain independent and should
continue in their position. Each Board member is subject to annual
re-election at each AGM. To date, no Director has been on the
Board for nine years or more. Due consideration will be given to
tenure and succession in respect of Gill Nott and Jamie Richards
who joined the Board at the same time.
THE MANAGEMENT ENGAGEMENT COMMITTEE
The Management Engagement Committee is comprised of the
entire Board and is chaired by Mark Lerdal.
This Committee meets as required to consider, amongst other
things, the appointment and terms of engagement of the
Company’s service providers including the Investment Manager
and AIFM, and the performance of all key service providers.
The Independent Auditor is not included in this review as its
appointment and evaluation falls under the remit of the
Audit Committee.
ACTIVITIES DURING THE YEAR
The Committee met once during the year to review the service
levels and the fees for the key service providers to the Company.
The Committee has recommended retention of the existing service
providers to the Company, having challenged fee and service levels
as appropriate. Key services providers will continue to be reviewed,
at least, annually.
APPOINTMENT OF NEW LEGAL ADVISER
Following a review during the period, the Board appointed Hogan
Lovells International LLP as the Company’s legal advisor, effective
in April 2024, replacing Herbert Smith Freehills.
INVESTMENT MANAGER AND AIFM
A robust evaluation of the performance of the Investment Manager
and Alternative Investment Fund Manager (AIFM) was conducted
by the Committee taking into consideration the activities that
had occurred throughout the year. It was concluded that the
Investment Manager had complied with the terms of their
Investment Management Agreement (IMA) and had met their
obligations to the Company as Investment Manager and AIFM
during the period under review. The fees paid to the Investment
Manager and the AIFM were reviewed by the Committee and it
was concluded that these are reasonable.
BOARD AND COMMITTEE MEETINGS
The following table sets out the Directors’ attendance at the Board
and Committee meetings during the period:
Director Board
Audit
Committee
Remuneration
and Nomination
Committee
Management
Engagement
Committee
Gillian Nott 4/4 4/4 1/1 1/1
Rachael Nutter
44
2/4 1/4 0/1 0/1
Jamie Richards 4/4 4/4 1/1 1/1
Thomas Plagemann 4/4 4/4 0/1 1/1
Mark Lerdal
45
1/4 1/4 1/1 1/1
44 Rachael Nutter resigned following the Company’s 2024 AGM on 21 May 2024.
45 Mark Lerdal was appointed on 1 October 2024.
ADDITIONAL AD HOC MEETINGS
In addition to the above quarterly meetings, there are also
additional ad hoc meetings; these are generally called to approve
trading updates, specific announcements on portfolio activity and
other general corporate matters and frequently involve a quorate
subcommittee of the Board, appointed as necessary. During
the current period, additional meetings were held to discuss the
tender offer and refinancing. The Board undertook an exercise to
explore likely terms for a refinancing of the senior debt facilities.
Following conclusion of the exercise, the Board determined a
bank refinancing to be an attractive option for the Company.
Representatives of JTC (UK) Limited attend all scheduled meetings
as Secretary to the Board. In addition, representatives of the
Investment Manager, the Independent Auditor and other advisers,
are invited to attend as required.
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Annual Report and Financial Statements 2024
CORPORATE GOVERNANCE REPORT CONTINUED
THE BOARD AGENDA
At quarterly meetings, the Board follows a formal agenda which
generally includes:
– the Investment Manager’s Report for the period, including
strategic performance, a review of the performance of the
investments and market conditions;
– financial results against budget and cash flow forecasts,
including dividends declared and forecast;
– reports and updates on shareholder and investor
communications;
– the corporate governance and secretary’s report, with a review
of policies and procedures, a compliance report and an update
on legislative/regulatory obligations as appropriate; and
– recommendations and updates from Board committees
as appropriate.
KEY ACTIVITIES OF THE BOARD DURING 2024
In the first half of the year, the Board prioritised returning
approximately $18 million to participating shareholders via a tender
offer, which concluded in June 2024.
In light of this return of capital, and in order to improve
operational cash dividend coverage during the remainder of
the year, the Board decided it was prudent to reduce the target
dividend. TheBoard will revise the dividend target in light of any
improvement in the coverage as a result of successfully completing
the proposed refinancing.
Succession planning was a key focus in the latter half of the
year. Following Rachael’s departure in May 2024, the Nomination
Committee initiated a formal recruitment process, leading to the
appointment of Mark Lerdal as a Non-Executive Director, effective
1October 2024.
The Company communicates with shareholders and solicits their
views where it considers it is appropriate to do so. Shareholders
are invited to attend the AGM where they have the opportunity
to ask questions of the Directors. The Board also makes itself
available to respond to written queries made by shareholders or to
meet with major shareholders if so requested. During the period,
the Board has communicated and met with shareholders on
several occasions.
In relation to the conduct of the Company’s 2025 AGM, voting on
all resolutions will be conducted by way of poll rather than a show
of hands. This is considered a more transparent method of voting
as member votes are counted according to the number of shares
held. As soon as practicable following the meeting the results of
the voting and number of proxy votes cast for and against and
the number of votes actively withheld in respect of each of the
resolutions will be announced via a regulatory information service
and also placed on the Company’s website.
INTERNAL CONTROL AND RISK MANAGEMENT
Although the Board is ultimately responsible for safeguarding the
assets of the Company, the Board has delegated, through written
agreements, the day-to-day operation of the Company
(including the financial reporting process) to the Investment
Manager (Amber Infrastructure Investment Advisor LLC) and
Administrator (JTC (UK) Limited).
The Audit Committee keeps under review the internal financial
controls and internal control and risk management, ensuring that
the procedures to be followed by the advisers and themselves are
in place.
The Board then reviews the effectiveness of the internal controls
system, based on the report from the Audit Committee, on an
annual basis to ensure that the controls remain relevant and were
in operation throughout the year.
The Board conducted its annual review of the Financial Position
and Prospectus Procedures (FPPP) Board memorandum which
was prepared by the Investment Manager, Company Secretary,
and Administrator. This sets out the procedures operating to
identify the information needed to monitor the business and
manage risk so as to make proper judgements on its financial
position and prospects. In addition, it sets out the procedures to
identify, assess and document the risk factors likely to impact on
the Company’s financial position, prospects and any changes and
on the preparation and communication to the Directors of related
information.
As part of its regular risk assessment procedures, the Board
takes account of the significance of environmental, social and
governance matters to the business of the Company. The Board
has identified and assessed the significant ESG risks to the
Company’s short and long-term value, as well as the opportunities
to enhance value that may arise from an appropriate response.
The Company relies on the ESG policy of the Investment Manager,
which is updated from time to time in line with industry standards.
Further information on the Company’s approach to ESG can be
found on page 31.
ANTI-BRIBERY POLICY
The Company operates an anti-bribery policy to ensure that it
meets its responsibilities arising from the Bribery Act 2010.
GILL NOTT
CHAIR
9 April 2025
Sonne Two (Heelstone) 7.0MW
DC
(North Carolina)
FINANCIAL STATEMENTSOVERVIEW
US Solar Fund plc
Annual Report and Financial Statements 2024
STRATEGIC REPORT CORPORATE GOVERNANCE
63
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US Solar Fund plc
Annual Report and Financial Statements 2024
64
The terms of reference were reviewed during the
year under review and were updated to enhance the
Committee’s scope to consider key risks facing the
Company. The Board is satisfied that the Committee is
properly constituted with one member of the Committee
who is a chartered accountant with recent and relevant
financial experience.
The Committee meets three times a year, and at
such other times as the Committee shall require.
Representatives of the Administrator and the Investment
Manager may be invited to attend meetings as and when
deemed appropriate.
ROLE AND RESPONSIBILITIES OF THE AUDIT
COMMITTEE
The function of the Committee is to ensure that the
Company maintains the highest standards of integrity,
financial reporting, internal and risk management systems
and corporate governance. The main duties of the Audit
Committee are:
– monitoring the integrity of the financial statements of
the Company and any formal announcements relating
to the Company’s financial performance and reviewing
significant financial reporting judgements contained
inthem;
– review and challenge of the critical estimates and key
judgements within the financial statements such as the
assumptions supporting the valuation of the Company’s
investments, including discount rates and forecast
merchant power prices, which are determined by the
Investment Manager and Independent Valuer;
– reporting to the Board on the appropriateness of the
Company’s accounting policies and practices including
critical judgement areas;
– reviewing the valuation of the Company’s investments
prepared by the Investment Manager, and making a
recommendation to the Board on the valuation of the
Company’s investments;
– meeting regularly with the Auditor to review their
proposed audit plan and the subsequent audit report
and assess the effectiveness of the audit process and
the levels of fees paid in respect of both audit and
non-audit work;
– making recommendations to the Board in relation to the
appointment, reappointment or removal of the Auditor
and approving their remuneration and the terms of
their engagement;
– monitoring and reviewing annually the Auditor’s
independence, objectivity, expertise, resources,
qualification and non-audit work;
– reviewing the effectiveness of the accounting
and internal control systems of the Company and
considering annually whether there is a need for the
Company to have its own internal audit function;
– reviewing and considering the UK Code, the AIC Code,
the FRC Guidance on Audit Committees and the
Company’s institutional investors’ commitment to the
UK Stewardship code;
AUDIT COMMITTEE REPORT
The Audit Committee (the Committee)
is chaired by Jamie Richards and
comprises all the independent
Directors set out on page 55.
The Committee operates within
clearly defined terms of reference
and includes all matters indicated
by Rule 7.1 of the UK FCA’s DTRs and
the AIC Code.
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FINANCIAL STATEMENTSOVERVIEW
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Annual Report and Financial Statements 2024
STRATEGIC REPORT CORPORATE GOVERNANCE
– monitoring the progress of the Company’s strategic review
and determining the impact on the Annual Report and financial
statements; and
– reviewing the risks facing the Company and monitoring the
risk matrix.
The Audit Committee is required to report formally to the Board
on its findings after each meeting on all matters within its duties
and responsibilities. The Company’s risk assessment process is
a risk based approach to internal control through a matrix which
identifies key risks undertaken by the Investment Manager and
Administrator, the risks associated with each activity and the
controls employed to minimise risks.
Based on the results the Audit Committee establishes the
Company’s risk appetite against which the Investment Manager
reports three times a year. The Board and the Investment Manager
have clearly defined investment criteria, return targets, risk appetite
and counterparty exposure limits. Reports on these performance
measures, combined with cash projections and quarterly
investment valuations are submitted to the Board for review at
each quarterly meeting.
FINANCIAL REPORTING
The primary role of the Committee in relation to financial reporting
is to review with the Investment Manager, the Administrator and
the Auditor the appropriateness of the half-year report and Annual
Report and financial statements, concentrating on, amongst
other matters:
– the quality and acceptability of accounting policies and
practices;
– the clarity of the disclosures and compliance with financial
reporting standards and relevant financial and governance
reporting requirements;
– amendments to legislation and corporate governance reporting
requirements and accounting treatment of new transactions in
the year;
– the impact of new and amended accounting standards on the
Company’s financial statements;
– whether the Audit Committee believes that proper and
appropriate processes and procedures have been followed in
the preparation of the half year report and Annual Report and
financial statements;
– whether the Annual Report and financial statements, taken as
a whole, is fair, balanced, and understandable and provides
the information necessary for shareholders to assess the
Company’s performance, business model and strategy;
– material areas in which significant judgements and estimates
have been applied or there has been discussion with the
Auditor; and
– any correspondence from regulators in relation to the
Company’s financial reporting.
MEETINGS
During the year covered by this report, the Committee met formally
on four occasions. The Committee considered and discussed the
following matters:
– consideration of the terms of reference of the Audit Committee;
– review of the Company’s risk register;
– review of the internal controls of the Investment Manager and
Administrator;
– review and approval of the audit plan of the Auditor and
timetable for the interim and annual financial statements; and
– detailed review of the interim financial statements and Annual
Report including active consideration of the judgements
associated with the investment held at fair value and
discussions with the Company’s Independent Valuer.
Valuation of investments is discussed in more detail below
given its significance.
VALUATION OF INVESTMENTS
As outlined in note 10 to the financial statements, the total carrying
value of the investments at fair value as at 31 December 2024 was
$193.3 million (2023: $254.7 million). Market quotations are not
available for these financial assets, and as such, their valuation
is undertaken using a discounted cash flow methodology. This
requires a series of material judgements to be made, as further
explained in note 3 to the financial statements.
The valuation process and methodology were discussed by the
Audit Committee with the Investment Manager at the time of the
interim review, prior to the year-end valuation process, and again
in March/April 2025 as part of the year-end sign-off process.
The Independent Valuer, KPMG, carries out a valuation semi-
annually, including a review of the valuation discount rates as at
31 December 2024. In September 2024, the Investment Manager
provided a report to the Audit Committee that supported the
valuation of the portfolio at 30 June 2024. The Independent Valuer
also provided a report to the Audit Committee in March/April 2025
confirming that the discount rates adopted as at 31 December
2024 were reasonable.
KEY FORECAST ASSUMPTIONS
The Audit Committee considered in detail those assumptions
that are subject to judgement that have a material impact on the
valuation. A significant proportion of the solar projects’ income
streams are power income under long-term PPAs; some of which
have fixed price mechanisms. However, over time the proportion of
power income that is fixed reduces and the proportion where the
Company has exposure to wholesale electricity prices increases.
The Investment Manager considers the forecasts provided by two
expert energy advisers and adopts a profile of assumed future
power prices by location of the solar assets.
The Investment Manager’s valuation methodology is set out on
pages 28 to 30 and other key macroeconomic, asset life and cost
assumptions and sensitivities considered by the Audit Committee
are included in note 10 to the Financial Statements.
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Annual Report and Financial Statements 2024
AUDIT COMMITTEE REPORT CONTINUED
AUDITOR INTERACTION
The Independent Auditor explained the results of their review of
the valuation, including their consideration of the Company’s
underlying cash flow projections, the macroeconomic assumptions
and discount rates to the Audit Committee. Based on their audit
work there were no adjustments proposed that were material
in the context of the 31 December 2024 financial statements
aspresented.
INTERNAL AUDIT
The Committee considers at least once a year whether there is a
need for an internal audit function. Currently it does not consider
there to be a need for an internal audit function, given that there
are no employees in the Company and all outsourced functions are
with parties who have their own internal controls and procedures.
EXTERNAL AUDIT
Deloitte LLP has performed the role of Independent Auditor since
the Company’s inception and was retained by the Board during the
year as the Independent Auditor.
EFFECTIVENESS OF THE AUDIT PROCESS
To fulfil its responsibility regarding the independence of the Auditor,
the Committee has considered:
– Discussions with or reports from the Auditor describing its
arrangements to identify, report and manage any conflicts
ofinterest
– The extent of non-audit services provided by the Auditor and
arrangements for ensuring the independence and objectivity
and robustness and perceptiveness of the Auditor and their
handling of key accounting and audit judgements
To assess the effectiveness of the Auditor, the Committee has
reviewed and challenged:
– The Auditor’s fulfilment of the agreed audit plan and variations
from it
– Discussions or reports highlighting the major issues that arose
during the course of the audit
– Feedback from other service providers evaluating the
performance of the audit team
– Arrangements for ensuring independence and objectivity
– Robustness of the Auditor in handling key accounting and
auditjudgements
The Committee is satisfied with Deloitte’s effectiveness and
independence as Auditor, having considered the degree of
diligence and professional scepticism demonstrated by them.
FAIR, BALANCED AND UNDERSTANDABLE
As a result of its review of the Annual Report and accounts,
underpinned by its discussions with operating and finance
management regarding the Strategic Report, and with the finance
team regarding the financial statements, the Committee advised
the Board that, in the Committee’s view, the Annual Report and
accounts, taken as a whole, is fair, balanced and understandable
and provides the information necessary for shareholders to
assess the Company’s position and performance, business model
andstrategy.
NON-AUDIT SERVICES
Details of audit and non-audit fees paid to the Independent Auditor
Deloitte LLP during the year are disclosed in note 7 to the financial
statements. The Committee approved these fees after a review of
the level and nature of work to be performed and are satisfied that
they are appropriate for the scope of the work required.
The objectivity of the Auditor is reviewed by the Committee which
also reviews the terms under which the Independent Auditor
may be appointed to perform non audit services. The Committee
reviews the scope and results of the audit, its cost effectiveness
and the independence and objectivity of the Auditor, with regard
to any non-audit work that the Auditor may undertake. In order to
safeguard Auditor independence and objectivity, the Committee
ensures that any other advisory and/or consulting services
provided by the Independent Auditor do not conflict with its
statutory audit responsibilities. Advisory and/or consulting services
will generally only cover reviews of interim financial statements,
specific and relevant assurance engagements and reporting
accountant related work. Any non-audit services conducted by the
Auditor outside of these areas will require detailed consideration
and the consent of the Committee before being initiated.
INDEPENDENCE
The Committee is required to consider the independence of the
Independent Auditor. In fulfilling this requirement, the Committee
has considered a report from Deloitte describing its arrangements
to identify, report and manage any conflict of interest and the
extent of non-audit services provided by them. The Committee has
concluded that it considers Deloitte to be independent of the
Company and that the provision of the non-audit services
described above is not a threat to the objectivity and
independence of the conduct of the audit.
AUDITOR’S TENURE
The Auditor is required to rotate the audit partner every five years.
A new audit partner was engaged for the 2024 financial year,
following the previous audit partner reaching his fifth year of tenure
having been engaged on an uninterrupted basis since 30 June
2019. There are no contractual obligations restricting the choice of
external auditor and the Company will consider putting the audit
services contract out to tender at least every ten years. In line
with the FRC’s recommendations on audit tendering, this will be
considered further when the audit partner rotates every five years.
Under the Companies Law, the reappointment of the Independent
Auditor is subject to shareholder approval at the AGM.
Having carried out the review described above and having satisfied
itself that the Auditor remains independent and effective, the
Audit Committee has recommended to the Board that Deloitte be
reappointed as Auditor for the year ending 31 December 2025.
AGM
The Chair of the Committee will be present at the Company’s AGM
to answer questions on the Audit Committee’s activity and matters
within the scope of the Audit Committee’s responsibilities.
JAMIE RICHARDS
CHAIR OF THE AUDIT COMMITTEE
9 April 2025
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Annual Report and Financial Statements 2024
STRATEGIC REPORT CORPORATE GOVERNANCE
DIRECTORS’ REMUNERATION REPORT
The Board has prepared this report in line with the AIC Code
as well as the requirements of the Large and Medium-sized
Companies and Groups (Accounts and Reports) Regulations 2008
(SI2008/410) and the Companies Act 2006.
Under the requirements of Section 497 of the Companies
Act 2006, the Company’s Auditor is required to audit certain
disclosures contained within the report. These disclosures have
been highlighted and the audit opinion thereon is contained within
the Auditor’s Report on pages 70 to 77.
CONSIDERATION BY THE DIRECTORS OF MATTERS
RELATING TO DIRECTORS’ REMUNERATION
The Remuneration and Nomination Committee comprises the
entire Board with Jamie Richards as Chair. This is considered
appropriate as all the Board members are independent Non-
Executive Directors. The Committee has responsibility for reviewing
the remuneration of the Directors, specifically reflecting the time
commitment and responsibilities of the role and meets at least
annually. The Committee also undertakes external comparisons
and reviews to ensure that the levels of remuneration paid are
broadly in line with industry standards and members have access
to independent advice where they consider it appropriate.
During the year neither the Board nor the Committee has been
provided with external advice or services by any person, but has
received industry comparison information from the Company
Secretary in respect of the Directors’ remuneration.
The remuneration policy set by the Board is described below.
Individual remuneration packages are determined by the
Remuneration and Nomination Committee within the framework
of this policy.
The Directors are not involved in deciding their own individual
remuneration with each Director abstaining from voting on their
own remuneration.
REMUNERATION POLICY
The Company’s remuneration policy is detailed below.
This was initially adopted on 19 November 2019 and approved
by shareholders at the 2020 AGM. The policy was subsequently
approved at the AGM held on 24 May 2023 as part of the
regulatory three yearly approval process. The Company has
followed the Remuneration Policy during 2024 and, having
reviewed it at the Remuneration and Nomination Committee 2024
meeting, concluded that it remains appropriate.
POLICY
The Company’s policy is that the remuneration of Non-Executive
Directors should be determined with due regard to the experience
of the Board as a whole, the time commitment required and to be
fair and comparable to that of other Non-Executive Directors of
similar companies. The Company may also periodically choose to
benchmark Directors’ fees with an independent review, to ensure
they remain competitive, fair and reasonable.
The fees for the Directors are determined within the limits set out
in the Company’s Articles of Association which states that the
Directors’ remuneration for their services in the office of director
shall, in the aggregate, not exceed £500,000 per annum or such
higher figure as the Company, by ordinary resolution, determines.
The Directors may elect to apply the cash amount equal to their
annual fee to subscribe for or to purchase Ordinary Shares.
Directors’ fees will be reviewed at least annually.
The Directors are entitled only to their annual fee and to be
reimbursed for any expenses properly and reasonably incurred by
them respectively in and about the business of the Company or in
the discharge of his or her duties as a Director.
Any Director who performs services which in the opinion of the
Directors are outside the scope of the ordinary duties of a director,
may be paid such reasonable additional remuneration to be
determined by the Directors or any committee appointed by the
Directors and such additional remuneration shall be in addition to
any remuneration provided for by way of their annual fee and their
reasonable expenses.
No element of the Directors’ remuneration is performance related,
nor does any Director have any entitlement to pensions, share
options or any long-term incentive plans from the Company.
The Directors hold their office in accordance with the Articles and
their appointment letters. No Director has a service contract with
the Company, nor is any such contract proposed. The Directors’
appointments can be terminated in accordance with the Articles
and without compensation.
RETIREMENT BY ROTATION
In accordance with the Articles of Association, the requirements
of the AIC Code and the Board’s policy, all the Directors will retire
annually and, being eligible, will offer themselves for re-election.
Gill Nott, Jamie Richards and Thomas Plagemann will offer
themselves up for re-election whilst Mark Lerdal will stand for
election. Biographical notes on the Directors are given on
page 55. The Board believes that each Director’s skills, experience
and knowledge continue to complement each other and add value
to the Company and recommends the election and re-election
of all the Directors who will stand for election and re-election to
theBoard.
DETAILS OF DIRECTORS’ REMUNERATION (AUDITED)
The emoluments in respect of qualifying services of each person
who served as a Director during the period are shown below.
For the period from 1 January 2024 to 31 December 2024 the
Directors were paid a base annual fee of £44,100. In addition to
this fee, Gill Nott was paid an additional £23,490 per annum for her
role as Chair of the Board. Jamie Richards was paid an additional
£11,025 per annum for serving as Chair of the Audit committee.
No Director has waived or agreed to waive any emoluments from
the Company in the current year. No other remuneration was paid
or payable by the Company during the current period nor were
any expenses claimed by or paid to them other than for expenses
incurred wholly, necessarily and exclusively in furtherance of their
duties as Directors of the Company.
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US Solar Fund plc
Annual Report and Financial Statements 2024
DIRECTORS’ REMUNERATION REPORT CONTINUED
DIRECTORS’ REMUNERATION
46
Director
Current
annual fee
(£)
Fees paid
from 1 Jan
– 31 Dec
2024
(£)
Fees paid
from 1 Jan
– 31 Dec
2023
(£)
Fees paid
from 1 Jan
– 31 Dec
2022
(£)
Gillian Nott 68,040 *68,040 63,420 63,000
Jamie Richards 55,125 * *55,125 52,719 52,500
Rachael Nutter
47
– 17, 24 4 42,175 42,000
Thomas Plagemann 4 4,10 0 44,10 0 42,175 42,000
Mark Lerdal
48
44,10 0 11,025
Total 211,365 195,534 200,489 199,500
* This includes £23,940 per annum in respect of serving as Chair of the Board during the
period 1 January – 31 December 2024.
** This includes £11,025 per annum in respect of serving as Chair of the Audit Committee
during the period 1 January – 31 December 2024.
DIRECTORS’ SHAREHOLDINGS
The Directors who held office during the year and their interests in
the issued shares of 1c each of the Company were as follows:
Director Ordinary Shares
Gill Nott 126,000
Jamie Richards 18 5,112
Thomas Plagemann –
Mark Lerdal –
Total 311,112
All of the Directors’ share interests shown above were held
beneficially.
RELATIVE IMPORTANCE OF SPEND ON PAY
The difference in actual spend between 31 December 2024 and
31 December 2023 on Directors’ remuneration in comparison to
distributions (dividends and share buybacks) are set out in the
chart below.
Payments made
from 1 Jan
– 31 Dec 2024
($)
Payments made
from 1 Jan
– 31 Dec 2023
($) % Change
Directors’ total
remuneration
46
*
300,777 236,724 27
Dividends declared 10,287,263 18,735,649 (45%)
Buyback of
Ordinary Shares
via tender offer
18,960,256 0 N/A
* Directors’ remuneration is paid in Great Britain Pounds (GBP), however for comparison
purposes the Directors’ total remuneration in this table is shown in US dollars, converted
atthe exchange rate applicable at the date of payment.
2025 REMUNERATION
The remuneration levels for the forthcoming year for the Directors
of US Solar Fund plc are shown in the Current Annual Fee column
in the above table.
In setting the Directors’ remuneration, consideration is given to
the performance of the Company. The Company’s performance
over the reporting periods since the Company’s Ordinary Shares
were first listed on the London Stock Exchange, and shows share
price total return and net asset value total return performance on a
dividends reinvested basis can be found in the performance graph
contained in the Operating Review on page 30.
STATEMENT OF VOTING AT AGM
Shareholders considered and approved the Company’s
remuneration policy at the AGM on 24 May 2024. At the AGM
on 24 May 2024, the resolution to approve the Director’s
Remuneration Report received 95.78% of votes in favour
respectively. At the 2023 AGM, when the Remuneration Policy was
last put to a shareholder vote, 99.93% voted for the resolution,
showing significant shareholder support.
APPROVAL OF THE REMUNERATION REPORT
An ordinary resolution for the approval of this Directors’
Remuneration Report will be put to shareholders at the
forthcoming Annual General Meeting.
COMPANY-WIDE CONSIDERATIONS
There are no executive directors, nor are there any employees
of the Company, so there are no statements to make on any
consultations, comparisons or pay and employment conditions
within the Company.
STATEMENT OF CONSIDERATION OF
SHAREHOLDER VIEWS
No comments were received in meetings held with shareholders
in 2024 in relation to Directors’ fees. Following publication of the
2024 Annual Report and prior to the AGM, the Company will offer
to meet virtually with shareholders to discuss the Company’s
performance and prospects and give shareholders the opportunity
to ask questions about the Remuneration Policy and levels
ofremuneration.
This Directors’ Remuneration Report was approved by the
Board on 9 April 2025 and is signed on its behalf by Jamie
Richard (Director and Chair of the Remuneration and Nomination
Committee).
JAMIE RICHARDS
CHAIR OF THE REMUNERATION & NOMINATION COMMITTEE
9 April 2025
46 Payments including to HMRC were made in January 2024 relating to fees for the prior year. These are included in the Directors’ Remuneration.
47 Rachael Nutter resigned following the Company’s 2024 AGM on 21 May 2024.
48 Mark Lerdal was appointed on 1 October 2024.
69
FINANCIAL STATEMENTSOVERVIEW
US Solar Fund plc
Annual Report and Financial Statements 2024
STRATEGIC REPORT CORPORATE GOVERNANCE
DIRECTOR’S RESPONSIBILITY STATEMENT
The Directors are responsible for preparing the Annual Report
and financial statements in accordance with applicable law and
regulations.
As a Company listed on the London Stock Exchange, US Solar
Fund plc is subject to the UK Listing Rules and Disclosure
and Transparency Rules, as well as to all applicable laws and
regulations in England and Wales where it is registered.
The financial statements have been prepared in accordance
with UK-adopted international accounting standards. Under the
UK Companies Act 2006, the Directors must not approve the
financial statements unless they are satisfied they give a true and
fair view of the state of affairs of the Company and of the profit or
loss for the period. In preparing these financial statements, the
Directorsshould:
– select suitable accounting policies and then apply them
consistently;
– make judgements and estimates that are reasonable;
– specify which generally accepted accounting principles have
been adopted in their preparation; and
– prepare the financial statements on the going concern basis,
unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping proper accounting
records which are sufficient to show and explain the Company’s
transactions and are to disclose with reasonable accuracy at any
time the financial position of the Company and enable them to
ensure that the financial statements comply with the requirements
of the Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and hence for taking
reasonable steps for the prevention and detection of fraud and
other irregularities.
The Directors are also responsible for preparing the Annual Report
and financial statements and the Directors confirm that they
consider that, taken as a whole, the Annual Report and financial
statements are fair, balanced and understandable and provide the
information necessary for shareholders to assess the Company’s
performance, business model and strategy. In accordance with the
FCA’s Disclosure and Transparency Rules, the Directors confirm to
the best of their knowledge that:
– the financial statements, prepared in accordance with
applicable accounting standards, give a true and fair view of
the assets, liabilities, financial position and profit or loss of the
Company taken as a whole;
– the Annual Report and accounts include a fair view of important
events that have occurred during the financial period; and
– the Annual Report and accounts include the related parties’
transactions that have taken place in the financial period
and that have materially affected the financial position or the
performance of the enterprise during that period.
The Directors have acknowledged their responsibilities in relation
to the financial statements for the period to 31 December 2024.
Signed by order of the Board,
GILL NOTT
CHAIR
9 April 2025
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US Solar Fund plc
Annual Report and Financial Statements 2024
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS
OF US SOLAR FUND PLC
Report on the audit of the financial statements
1. OPINION
In our opinion the financial statements of US Solar Fund plc (the ‘Company’):
– give a true and fair view of the state of the Company's affairs as at 31 December 2024 and of its loss for the year then ended;
– have been properly prepared in accordance with United Kingdom adopted international accounting standards; and
– have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements which comprise:
– the statement of profit and loss and other comprehensive income;
– the statement of financial position;
– the statement of changes in equity;
– the statement of cash flows; and
– the related notes 1 to 18.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom adopted international
accounting standards.
2. BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities
under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our report.
We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements
in the UK, including the Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard as applied to listed public interest entities, and we
have fulfilled our other ethical responsibilities in accordance with these requirements. The non-audit services provided to the company for
the year are disclosed in note 7 to the financial statements. We confirm that we have not provided any non-audit services prohibited by the
FRC’s Ethical Standard to the company.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
3. SUMMARY OF OUR AUDIT APPROACH
Key audit matters The key audit matters that we identified in the current year was:
– Fair value of investments
– Judgements associated with going concern
Within this report, key audit matters are identified as follows:
Newly identified
Similar level of risk
Materiality The materiality that we used in the current year was $2.9m which was determined on the basis of 1.5% of total
shareholders’ equity.
Scoping As the Company is required to measure its subsidiaries at fair value rather than consolidate on a line-by-line
basis, the Company has been treated as having only one component.
Significant changes
in our approach
There have been no significant changes to our audit approach in the current year. However, we have identified
judgements associated with going concern as a new key audit matter in the current year due to increased
audit effort as a result of the requirement for a discontinuation vote combined with the ongoing debt
refinancing exercise.
4. CONCLUSIONS RELATING TO GOING CONCERN
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation
of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the Company’s ability to continue to adopt the going concern basis of accounting is
discussed in section 5.2.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually
or collectively, may cast significant doubt on the company’s ability to continue as a going concern for a period of at least twelve months
from when the financial statements are authorised for issue.
In relation to the reporting on how the company has applied the Association of Investment Companies Code of Corporate Governance
(the “AIC code”), we have nothing material to add or draw attention to in relation to the directors’ statement in the financial statements
about whether the directors considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
71
OVERVIEW STRATEGIC REPORT
US Solar Fund plc
Annual Report and Financial Statements 2024
FINANCIAL STATEMENTSCORPORATE GOVERNANCE
5. KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements
of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we
identified. These matters included those which had the greatest effect on: the overall audit strategy; the allocation of resources in the
audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon,
andwe do not provide a separate opinion on these matters.
5.1. FAIR VALUE OF INVESTMENTS
Key audit matter
description
The Company’s investments, held at fair value as required by IFRS 10, comprise of investments in an
intermediate holding company, USF Holding Corp., and its associated debt interest. The subsidiary entity
holds investments in solar power assets.
The Company holds five investments via this subsidiary entity as at 31 December 2024 (2023: five). The total
value of investments, including loan receivables, recognised at fair value as at the reporting date is $193.3m
(2023: $254.7m).
The valuation of investments in line with the requirements of IFRS 13 requires significant judgements given
there is no liquid or quoted price information available for the investments made, in particular in relation to
merchant price forecasts and discount rates used to derive fair value. Other key assumptions include inflation
rates, forecast electricity production, and economic life of operational assets applied to future cashflows, as
well as the potential impact of climate change.
Due to the inherent risks described above we have identified a risk of error and a potential fraud risk relating
to the possibility that investments may be valued inappropriately. Additional consideration has been given
to the operational performance of the underlying assets, evidence arising as a result of the current market
capitalisation of the Company continuing to be at a substantial discount to the net asset value in the financial
statements including consideration of other market evidence, and the continued impact of changes in macro-
economic factors including interest rates and energy prices.
The Audit Committee have set out their consideration of the risk on page 65 and it is disclosed as a key
source of estimation uncertainty in note 3 of the financial statements. A breakdown of the investments
and the assumptions applied to the valuation are described in note 10 of the financial statements. Detail of
the accounting policy applied by the Company is set out in note 5 with details in respect of the valuation
approach and methodology set out in note 10.
How the scope of our
audit responded
to the key audit matter
We challenged the assumptions made by the Directors and the valuation recognised through the following
procedures:
– obtaining an understanding of and tested the relevant controls related to the valuation process at
31December 2024;
– assessing the methodology applied in determining fair value and challenge of key assumptions through
the use of benchmarking against third party sources or evidence of market practice;
– involving valuation specialists and utilising other sources of evidence to assess and evaluate the valuation
methodology applied, the financial models prepared by the Directors, and key assumptions adopted
including discount rates, merchant price assumptions, electricity production assumptions, inflation rates,
and useful economic life assumptions;
– in conjunction with our valuation specialists, reviewing and challenging management’s benchmarking of
the net asset value of the Fund against market capitalisation with other market evidence and benchmarks,
including analysis of the share price discount to net asset value of peer companies, and relevant market
transactional data;
– using macroeconomic data and observable market data to challenge key assumptions including interest
rates and energy prices, and the consideration of the impact of climate change on the future demand for
renewable energy;
– assessing the arithmetic accuracy of the models prepared by management;
– assessing the incorporation of the assumptions into the valuation and the correct application of the
selected discount rates;
– assessing the sensitivity analysis over key assumptions performed by management to assess the impact
of a reasonably possible change on the fair value of investments recognised; and
– evaluating the adequacy of the disclosures made in the financial statements.
Key observations Based on the audit procedures performed we have concluded that the valuation of investments and relevant
disclosures are appropriate.
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US Solar Fund plc
Annual Report and Financial Statements 2024
5.2. JUDGEMENTS ASSOCIATED WITH GOING CONCERN
Key audit matter
description
The Directors have performed an assessment of going concern for the Company are set out in the directors’
report on page 57 and note 2 to the financial statements respectively, and concluded that the continued
adoption of the going concern assumption is appropriate. In performing this assessment, the key areas of
judgement include the ongoing debt refinancing and related impact on available liquidity, and the requirement
for a discontinuation vote.
As required by the Company’s Articles, due to the Company’s market capitalisation trading at an average
discount to net asset value (NAV) in excess of 10% over the course of 2024, a special resolution will be
proposed at the AGM on 20 May 2025 for the shareholders to vote for discontinuation, which would result
in the need to wind up or otherwise reconstruct the Company. To pass, 75% of shareholders would need
to vote for the resolution, therefore if more than 25% of shareholders vote against discontinuation, the vote
would not pass.
The Board also announced in April 2024 its intention to carry out a potential refinancing of existing debt
facilities through bank debt financing. The proposed refinancing will proactively address the medium term
project company refinancings required between 2026 to 2028 with the first debt expiring for Euryalus in
June 2026. The proposed refinancing is expected to conclude by the end of April 2025.
We have identified a risk in relation to going concern, with a particular focus on the assumption that the debt
refinancing will be successful and the discontinuation vote will not pass. As such, this required increased
audit effort and senior involvement and has led to the audit of the going concern assumption being identified
as a key audit matter.
How the scope of our
audit responded
to the key audit matter
We challenged the assumptions made by the Directors and the adoption of the going concern assumption,
in particular the likelihood of debt refinancing and the judgement as to whether the discontinuation vote may
pass, through the following procedures:
– obtaining and reviewing the Company’s facility agreements to understand terms associated with those
agreements, and comparing to facilities assumed in the forecasts;
– evaluating the Company’s liquidity requirements, and forecast cash flows over the assessment period,
including assessment of financing requirements of underlying project companies and the refinancing
requirements;
– assessing the assumptions used in the forecast cash flows, including performing sensitivity analysis in
relation to key assumptions and assessing headroom in the forecasts;
– evaluating the directors’ judgement with respect to the renewal of debt facilities including the quality of the
assets held, status of current negotiations and covenant compliance over the forecast period;
– assessing the likely outcome of the discontinuance vote on the ongoing viability of the Company by
reviewing shareholder analysis and holding discussions with the Board, the Company’s investment
manager and the Company’s broker; and
– assessing the appropriateness of the disclosures in the financial statements relating to going concern.
Key observations Based on the procedures performed we are satisfied the Company’s assumptions and disclosures regarding
the preparation of the financial statements on a going concern are appropriate.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS
OF US SOLAR FUND PLC
CONTINUED
Report on the audit of the financial statements
73
OVERVIEW STRATEGIC REPORT
US Solar Fund plc
Annual Report and Financial Statements 2024
FINANCIAL STATEMENTSCORPORATE GOVERNANCE
6. OUR APPLICATION OF MATERIALITY
6.1. MATERIALITY
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions of
a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope of our audit work and
in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Materiality $2.9m (2023: $3.8m)
Basis for determining materiality 1.5% of total shareholders’ equity (2023: 1.5% of total shareholders’ equity)
Rationale for the benchmark applied We consider total shareholders’ equity to be the key benchmark used by members
of the Company in assessing financial performance. Net asset value is a key metric
communicated to shareholders and investors and, due to the nature of the Company
as an investment entity, reflects both the performance and position of the Company.
A lower materiality threshold of $0.19m based upon 5% of expenses (2023: $0.35m based on 5% of expenses) has also been applied
to all administrative expenses and trade and other payables recognised within the statement of financial position at the reporting date.
The use of a lower materiality threshold reflects the nature of these transactions being primarily from related parties.
6.2. PERFORMANCE MATERIALITY
We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and undetected
misstatements exceed the materiality for the financial statements as a whole. Performance materiality was set at 70% of materiality for the
2024 audit (2023: 70%). In determining performance materiality, we considered the following factors:
– our understanding of the control environment relevant to the financial reporting process;
– no significant changes in the business during the year against the expected business plan and strategy;
– historically low level of identified uncorrected misstatements; and
– relative complexity of operations and stage of investment lifecycle in the current year.
6.3. ERROR REPORTING THRESHOLD
We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of $0.15m (2023: $0.19m),
as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also report to the Audit
Committee on disclosure matters that we identified when assessing the overall presentation of the financial statements.
Total Shareholders
1
Equity
Materiality
Total
Shareholders
1
Equity $194.2m
Materiality $2.9m
Audit Committee reporting
threshold $0.15m
74
US Solar Fund plc
Annual Report and Financial Statements 2024
7. AN OVERVIEW OF THE SCOPE OF OUR AUDIT
7.1. SCOPING
Our audit was scoped by obtaining an understanding of the entity and its environment, including internal control, and assessing
the risks of material misstatement. Audit work to respond to the risks of material misstatement was performed directly by the audit
engagementteam.
As the Company is required to measure its subsidiaries at fair value rather than consolidate on a line-by-line basis, the Company has been
treated as having only one component and thus all of the work was carried out by one audit team.
7.2. OUR CONSIDERATION OF THE CONTROL ENVIRONMENT
Reflecting the limited segregation of duties and timing of control activities, the audit plan was developed and executed on the basis of a
non-controls reliance strategy. However, we obtained an understanding of relevant controls over the fair value of investments business
cycle and the financial reporting process as part of our audit procedures in these areas.
7.3. OUR CONSIDERATION OF CLIMATE-RELATED RISKS
Management has considered transition and physical risks when factoring in climate change as part of their risk assessment process
when considering the principal risks and uncertainties facing the Company. This is set out in the strategic report on pages 1 to 53 and
the principal risks set out on pages 42 to 50. From the financial statements’ perspective, these risks have been focused on the valuation
of investments. This is consistent with our evaluation of the climate-related risks facing the Company and is linked to the key audit matter
as highlighted in section 5.1 above. In planning our audit, we have considered the potential impact of climate change on the Company’s
business and its financial statements. In addition, we have:
– assessed the key financial statement line items and estimates which are more likely to be materially impacted by climate change risks
given the more notable impacts of climate change on the business are expected to arise in the medium to long term;
– challenged how the Directors considered climate change in their assessment of going concern based on our understanding of the
business environment and by benchmarking relevant assumptions with market data;
– with the involvement of our Environmental Social and Governance (ESG) specialist we have assessed the Task Force for Climate related
Financial Disclosures (TCFD) on pages 36 to 41 against the recommendations of the TCFD framework; and
– read the climate risk disclosures included throughout the strategic report section of the annual report to consider whether they are
materially consistent with the financial statements and our knowledge obtained in the audit.
8. OTHER INFORMATION
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report
thereon. The directors are responsible for the other information contained within the annual report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to
a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a
material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
9. RESPONSIBILITIES OF DIRECTORS
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary
to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern,
disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either
intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS
OF US SOLAR FUND PLC
CONTINUED
Report on the audit of the financial statements
75
OVERVIEW STRATEGIC REPORT
US Solar Fund plc
Annual Report and Financial Statements 2024
FINANCIAL STATEMENTSCORPORATE GOVERNANCE
10. AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when
it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
11. EXTENT TO WHICH THE AUDIT WAS CONSIDERED CAPABLE OF DETECTING IRREGULARITIES, INCLUDING FRAUD
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud is detailed below.
11.1. IDENTIFYING AND ASSESSING POTENTIAL RISKS RELATED TO IRREGULARITIES
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and
regulations, we considered the following:
– the nature of the industry and sector, control environment and business performance including the design of the company’s
remuneration policies, key drivers for directors’ remuneration, bonus levels and performance targets;
– results of our enquiries of management, the directors and the Audit Committee about their own identification and assessment of the
risks of irregularities, including those that are specific to the company’s sector;
– any matters we identified having obtained and reviewed the company’s documentation of their policies and procedures relating to:
– identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;
– detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;
– the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;
– the matters discussed among the audit engagement team and relevant internal specialists, including valuations and ESG specialists
regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and
identified the greatest potential for fraud in the fair value of investments. In common with all audits under ISAs (UK), we are also required
to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory framework that the company operates in, focusing on provisions of those
laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key
laws and regulations we considered in this context included the UK Companies Act, Listing Rules, and tax legislation.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but
compliance with which may be fundamental to the company’s ability to operate or to avoid a material penalty. This includes the Alternative
Investment Fund Managers (AIFM) Directive and Non-Mainstream Pooled Investments regulations.
11.2. AUDIT RESPONSE TO RISKS IDENTIFIED
As a result of performing the above, we identified the fair value of investments as a key audit matter related to the potential risk of fraud.
The key audit matters section of our report explains the matter in more detail and also describes the specific procedures we performed in
response to that key audit matter.
In addition to the above, our procedures to respond to risks identified included the following:
– reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant
laws and regulations described as having a direct effect on the financial statements;
– enquiring of management and the Audit Committee concerning actual and potential litigation and claims;
– performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement
due to fraud;
– reading minutes of meetings of those charged with governance; and
– in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other
adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating
the business rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members including
internal specialists, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
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Annual Report and Financial Statements 2024
12. OPINIONS ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
– the information given in the strategic report and the directors’ report for the financial year for which the financial statements are
prepared is consistent with the financial statements; and
– the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have
not identified any material misstatements in the strategic report or the directors’ report.
13. CORPORATE GOVERNANCE STATEMENT
The UK Listing Rules require us to review the directors' statement in relation to going concern, longer-term viability and that part of the
Corporate Governance Statement relating to the company’s compliance with the provisions of the AIC Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial statements and our knowledge obtained during the audit:
– the directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material
uncertainties identified set out on page 57;
– the directors’ explanation as to its assessment of the company’s prospects, the period this assessment covers and why the
period is appropriate set out on page 51;
– the directors’ statement on fair, balanced and understandable set out on page 69;
– the board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 51;
– the section of the annual report that describes the review of effectiveness of risk management and internal control systems set
out on page 42; and
– the section describing the work of the audit committee set out on page 64 to 66.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS
OF US SOLAR FUND PLC
CONTINUED
Report on other legal and regulatory requirements
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US Solar Fund plc
Annual Report and Financial Statements 2024
FINANCIAL STATEMENTSCORPORATE GOVERNANCE
14. MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
14.1. ADEQUACY OF EXPLANATIONS RECEIVED AND ACCOUNTING RECORDS
Under the Companies Act 2006 we are required to report to you if, in our opinion:
– we have not received all the information and explanations we require for our audit; or
– adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited
by us; or
– the financial statements are not in agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
14.2. DIRECTORS’ REMUNERATION
Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of directors’ remuneration have not
been made or the part of the directors’ remuneration report to be audited is not in agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
15. OTHER MATTERS WHICH WE ARE REQUIRED TO ADDRESS
15.1. AUDITOR TENURE
Following the recommendation of the Audit Committee, we were appointed by Directors on 30 June 2019 to audit the financial statements
for the year ending 31 December 2019 and subsequent financial periods. The period of total uninterrupted engagement including previous
renewals and reappointments of the firm is six years, covering the years ending 31 December 2019 to 31 December 2024.
15.2. CONSISTENCY OF THE AUDIT REPORT WITH THE ADDITIONAL REPORT TO THE AUDIT COMMITTEE
Our audit opinion is consistent with the additional report to the audit committee we are required to provide in accordance with ISAs (UK).
16. USE OF OUR REPORT
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in
an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone
other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
WILLIAM BROOKS FCA
SENIOR STATUTORY AUDITOR
For and on behalf of Deloitte LLP
Statutory Auditor
London, United Kingdom
9 April 2025
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Annual Report and Financial Statements 2024
STATEMENT OF PROFIT AND LOSS AND
OTHER COMPREHENSIVE INCOME
For the year ended 31 December 2024
For the year ended 31 December 2024 For the year ended 31 December 2023
Notes
Revenue
USD
‘000
Capital
USD
‘000
Total
USD
‘000
Revenue
USD
’000
Capital
USD
’000
Total
USD
‘000
Net loss on investments at fair value
throughprofit and loss – (42,472) (42,472) – (62,911) (62,911)
MSA fee income 3,655 – 3,655 6,421 – 6,421
Dividends received 5,714 – 5,714 18,325 – 18,325
Intercompany interest income 1,994 – 1,994 1,989 – 1,989
Interest income 6 – – – 217 – 217
Total income 11,363 (42,472) (31,109) 26,952 (62,911) (35,959)
Expenditure
Administrative and other expenses 7 (3,761) – (3,761) ( 7,0 6 4) – ( 7,0 6 4)
Operating (loss)/profit for the year 7,602 (42,472) (34,870) 19,888 (62 ,911) (43,023)
Loss on foreign exchange – (12) (12) – (33) (33)
(Loss)/profit before taxation 7,602 (42,484) (34,882) 19,888 (62,944) (43,056)
Taxation 8 – – –
(Loss)/profit and total comprehensive
income fortheyear 7,602 (42,484) (34,882) 19,888 (62,944) (43,056)
Earnings per share (basic and diluted)
– cents/share 9 2.39 (13.33) (10.94) 5.99 (18.95) (12.96)
All items dealt with in arriving at the result for the year relate to continuing operations.
The total column of this statement represents the Company’s profit and loss account. The financial statements have been prepared in
accordance with UK-adopted international accounting standards. The supplementary revenue and capital columns are presented for
information purposes, in accordance with the Statement of Recommended Practice issued by the Association of Investment Companies,
as further explained in note 2.
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US Solar Fund plc
Annual Report and Financial Statements 2024
FINANCIAL STATEMENTSCORPORATE GOVERNANCE
STATEMENT OF FINANCIAL POSITION
As at 31 December 2024
Notes
31 December 2024
USD
’000
31 December 2023
USD
’000
Non-current assets
Investment held at fair value 10 193,251 254,723
193,251 254,723
Current assets
Trade and other receivables 11 846 3,088
Cash and cash equivalents 10 890 1,554
1,736 4,642
Total assets 194,987 259,365
Current liabilities
Trade and other payables 12 835 1,135
835 1,135
Net current assets 902 3,507
Total net assets 194,152 258,230
Shareholders equity
Share capital 13 3,322 3,322
Share premium 14 128,036 128,036
Capital reduction reserve 14 156,099 175,0 08
Capital reserve 14 (96,957) (54,473)
Retained earnings 14 3,652 6,337
Total shareholders equity 194,152 258,230
Net asset value per share 15 0.63 0.78
The financial statements of US Solar Fund plc (registered number 11761009) were approved by the Board of Directors and authorised for
issue on 9 April 2025. They were signed on its behalf by:
GILL NOTT
DIRECTOR
9 April 2025
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Annual Report and Financial Statements 2024
Notes
Share
capital
USD
’000
Share
premium
USD
‘000
Capital
reduction
reserve
USD
‘000
Capital
reserve
USD
‘000
Retained
earnings
USD
‘000
Total
equity
USD
‘000
Balance at 1 January 2024 3,322 128,036 175,008 (54,473) 6,337 258,230
Dividends 14 – – – – (10,287) (10,287)
Return of capital 14 – – (18,578) – (18,578)
Share transaction costs – – (331) – (331)
(Loss)/profit & total comprehensive income
for the year – – – (42,484) 7,602 (34,882)
Balance at 31 December 2024 3,322 128,036 156,099 (96,957) 3,652 194,152
For the year ended 31 December 2023
Notes
Share
capital
USD
’000
Share
premium
USD
‘000
Capital
reduction
reserve
USD
‘000
Capital
reserve
USD
‘000
Retained
earnings
USD
‘000
Total
equity
USD
‘000
Balance at 1 January 2023 3,322 128,036 175,008 8,471 5,185 320,022
Dividends 14 – – – – (18,736) (18,736)
(Loss)/profit & total comprehensive income
fortheyear – – – (62,944) 19,888 (43,056)
Balance at 31 December 2023 3,322 128,036 175,008 (54,473) 6,337 258,230
The notes on pages 82 to 96 form an integral part of these financial statements.
STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2024
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Annual Report and Financial Statements 2024
FINANCIAL STATEMENTSCORPORATE GOVERNANCE
Notes
Year ended
31 December 2024
USD
‘000
Year ended
31 December 2023
USD
‘000
Cash flows from operating activities
Profit for the year (34,882) (43,056)
Adjustments for:
Net (gain)/loss on investments at fair value through profit and loss 10 42,472 62,911
Loss on foreign exchange 12 33
Operating cash flows before movements in working capital 7,602 19,888
Increase in trade and other receivables 2,242 (1,873)
(Decrease)/increase in trade and other payables (300) 31
Net cash generated from operating activities 9,544 18,046
Cash flows used in investing activities
Return of capital from investments 10 19,000 –
Net cash inflow from investing activities 19,000 –
Cash flows generated from/(used in) financing activities
Cash paid on the repurchase of shares 14 (18,909)
Dividends paid (10,287) (23,785)
49
Net cash outflow from financing activities (29,19 6) (23,785)
Net decrease in cash and cash equivalents for the year (652) (5,739)
Effect of foreign exchange rate movements (12) (33)
Cash and cash equivalents at the beginning of the year 1,554 7,3 2 6
Cash and cash equivalents at the end of the year 890 1,554
The notes on pages 82 to 96 form an integral part of these financial statements.
IAS 7 Statement of Cash Flows requires additional disclosures about changes in an entity’s financing liabilities, arising from both cash flow
and non-cash flow items. As at 31 December 2024 the Company has no financing liabilities and therefore no further disclosure is required.
STATEMENT OF CASH FLOWS
For the year ended 31 December 2024
49 This includes the Q3 2023 dividend paid to shareholders of $5.1 million, which was transferred in advance of the year end to the registrar to facilitate payment to shareholders.
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Annual Report and Financial Statements 2024
1. GENERAL INFORMATION
US Solar Fund plc (the Company) was incorporated as a Public Company, limited by shares, in England and Wales on 10 January 2019
with registered number 11761009. The registered office of the Company is The Scalpel, 18th Floor, 52 Lime Street, London EC3M 7AF. Its
share capital is denominated in US Dollars and currently consists of Ordinary Shares. The Company’s principal activity is to invest in
a diversified portfolio of solar power assets located in North America and other countries forming part of the OECD in the Americas.
2. BASIS OF PREPARATION
The financial statements have been prepared using accounting policies consistent with UK-adopted international accounting standards
in conformity with the requirements of the Companies Act 2006 and the Statement of Recommended Practice ‘Financial Statements of
Investment Trust Companies and Venture Capital Trusts”, issued by the Association of Investment Companies, (the AIC SORP) in July
2022. The financial statements have been prepared on a historical cost basis, except for the investment portfolio at fair value through the
profit and loss. The principal accounting policies are set out in note 5.
In terms of the AIC SORP, the Company presents a Statement of Profit and Loss and Other Comprehensive Income, which shows
amounts split between those which are revenue and capital in nature. The determination of the revenue or capital nature of a
transaction is determined by giving consideration to the underlying elements of the transaction and is carried out in accordance with
the recommendations and principles as set out in the AIC SORP. Capital transactions are considered to be those arising as a result of
the appreciation or depreciation in the value of assets, whether due to the retranslation of assets held in foreign currency or fair value
movements on investments held at fair value through profit and loss. Revenue transactions are all transactions, other than those which
have been identified as capital in nature.
FUNCTIONAL AND PRESENTATION CURRENCY
The currency of the primary economic environment in which the Company operates (the functional currency) is US Dollar ($ or USD),
which is also the presentation currency.
GOING CONCERN
In assessing the going concern basis of accounting the Directors have had regard to the latest guidance issued by the Financial Reporting
Council in February 2025. In addition, note 10 to the financial statements includes the policies and processes for managing its capital, its
financial risk management, details of its financial instruments and its exposure to credit risk and liquidity risk.
The Directors have reviewed cash flow forecasts prepared by management. Based on those forecasts, consideration of the operating
costs and obligations as well as capital commitments, it has been considered appropriate to prepare these financial statements on a
going concern basis. The Company generated a loss after tax of $34.9 million and operating cash flows of $9.6 million for the year.
As at 31 December 2024, the Company is in a net current asset position of $1.0 million and has available cash of $0.9 million. As of the
same date, the Company’s subsidiary, USF Holding Corp., has available cash of $1.6 million, which is available to meet the obligations
of the Company. The Company has access through USF Avon LLC (a wholly owned subsidiary of the Company) to a $20.0 million RCF.
The RCF provides liquidity for capital expenditures, working capital and general corporate purposes until September 2025. The facility
is currently undrawn with no forecast drawings expected. Whilst an ongoing refinancing exercise continues across the portfolio which is
expected to replace the facility (see page 6), as the current facility expires in September 2025, for prudency this has not been assumed
to be available in the going concern assessment. The proposed refinancing will proactively address the near medium term refinancings
required between 2026 to 2028 with the first debt expiring for Euryalus in June 2026. The proposed refinancing is expected to conclude
by the end of April 2025.
The Board has reviewed a set of financial projections of the cash flow and distribution profile of the Company prepared by the Investment
Manager. The Board has assessed the prospects of the Group by reviewing its short-term cash flow forecast which covers a two-year
period and completed a detailed assessment to support the going concern conclusion for the 12 months following the signing of the
Annual Report. After assessing these risks, and reviewing the Company’s liquidity position, together with forecasts of the Company’s
future performance under various scenarios, the Company is forecast to have sufficient cash resources to continue its operations for a
period of at least 12 months from the date of approval of the accounts and the Board has a reasonable expectation that the Company will
continue to meet its obligations as they fall due for at least the next 12 months.
Because the Company has traded at an average discount to NAV in excess of 10% over the course of 2024, the Company’s Articles
require that a special resolution be proposed at the Company’s forthcoming AGM, for shareholders to vote to wind up or otherwise
reconstruct the Company. If a discontinuation resolution is passed (requiring the approval of at least 75% of the votes cast in respect of
it), the Company’s Articles provide the Board with four months to put forward a proposal to shareholders. The Directors have considered
the upcoming discontinuation vote expected at the Company’s AGM in their assessment of going concern. Given current uncertainties
in the US market, the Board believes it would be very difficult to achieve a realisation of the Company’s assets currently other than at a
distressed price, and does not recommend a discontinuation.
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2024
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Annual Report and Financial Statements 2024
FINANCIAL STATEMENTSCORPORATE GOVERNANCE FINANCIAL STATEMENTSCORPORATE GOVERNANCE
The Directors’ assessment of going concern included reflection of this view and feedback from shareholders has been supportive of
realising value from the Company’s assets when market conditions are conducive to a sale for value. Additionally, the discontinuation vote
proposed at the 2024 AGM was not passed. Should the discontinuation vote be passed the Directors would be required to put forward
proposals to Shareholders at a general meeting of the Company, to be held within four months of the Discontinuation Resolution being
passed, to wind up or otherwise reconstruct the Company, having regard to the illiquid nature of the Company’s underlying assets, and
implementation of any such proposal would be expected to extend beyond the current going concern period.
The Directors believe that the Company will continue into the foreseeable future and have adopted the going concern basis of preparation
in preparing these financial statements.
3. CRITICAL JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amount of assets, liabilities, income and expenses. Estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to the accounting estimates are recognised in the period in which the estimates
are revised and in any future periods affected.
During the year, the Directors considered the following significant judgements, estimates and assumptions:
JUDGEMENTS
Assessment as an investment entity
Entities that meet the definition of an investment entity within IFRS 10 are required to measure their subsidiaries at fair value through profit
or loss rather than consolidate them unless they provided investment related services to the Company. To determine that the Company
continues to meet the definition of an investment entity, the Company is required to satisfy the following three criteria:
1. the Company obtains funds from one or more investors for the purpose of providing those investors with investment management
services;
2. the Company commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation,
investment income, or both; and
3. the Company measures and evaluates the performance of substantially all of its investments on a fair value basis.
The Company meets the criteria as follows:
– the Company provides investment management services and has several investors who pool their funds to gain access to
infrastructure related investment opportunities that they might not have had access to individually;
– the stated strategy of the Company is to deliver stable returns to shareholders through investing in a diversified portfolio of utility-scale
solar power plants and associated infrastructure, which may include transmission and storage (e.g. batteries) assets which will typically
be co-located with the solar power plant (together, solar power assets) located in North America and other OECD countries in the
Americas; and
– the Company measures and evaluates the performance of all of its investments on a fair value basis. The fair value method is used to
represent the Company’s performance in its communication to the market, including investor presentations. In addition, the Company
reports fair value information internally to Directors, who use fair value as the primary measurement attribute to evaluate performance.
The Directors are of the opinion that the Company has all the typical characteristics of an investment entity and continues to meet the
definition in the standard. This conclusion will be reassessed on an annual basis.
In respect of the second criterion the Company’s purpose is to invest funds for returns from capital appreciation and investment income.
In respect of the requirement that investments should not be held indefinitely but should have an exit strategy for their realisation the
Company may hold these assets until the end of their expected useful lives, unless there is an opportunity in the market to dispose of the
investments at a price that is considered appropriate. There continues to be an active secondary market for renewables projects in the
countries in which we operate.
As at 31 December 2024, the Company only had one direct subsidiary, USF Holding Corp. Being an investment entity, it is measured at
fair value as opposed to being consolidated on a line-by-line basis, meaning its cash, debt and working capital balances are included in
the fair value of investments rather than the Group’s current assets.
ESTIMATES
Valuation of investment in subsidiary
The fair valuation of investments is the most significant estimate in the Company’s financial statements. This estimate is determined by
discounting expected cash flows at a discount rate appropriate to the risk profile of each investment. Refer to note 10 for further detail
on the fair value measurement as at 31 December 2024 and detail on the sensitivity analysis on inputs including discount rate, electricity
production, electricity prices and operational expenses.
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Annual Report and Financial Statements 2024
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2024
4. NEW AND REVISED STANDARDS AND INTERPRETATIONS
APPLICATION OF NEW AND REVISED STANDARDS
The accounting policies adopted in the preparation of the Annual Report and Audited Financial Statements for the year ended
31December 2024 are consistent with those of the previous financial year. The adoption of new standards, interpretations and
amendments in the current year has not had a material impact. The Company has not early adopted any standard, interpretation
oramendment that has been issued but is not yet effective at 31 December 2024.
NEW AND REVISED STANDARDS IN ISSUE BUT NOT YET EFFECTIVE
The following standards have been issued but are not effective for this accounting period and have not been adopted early:
– IFRS 18: Presentation and Disclosure in Financial Statements – effective from 1 January 2027
– Amendment to IFRS 9 and IFRS 7: Classification and Measurement of Financial Instruments – effective from 1 January 2026
– IFRS 7: Financial Instruments: Disclosures – effective from 1 January 2026
Adoption of the new or amended standards and relevant interpretations in future periods is not expected to have a material impact
onthefinancial statements of the Company.
5. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies used in the preparation of the financial statements have been consistently applied during the year ended
31December 2024 as well as the prior year.
The principal accounting policies applied in the preparation of the financial statements are set out below:
SEGMENTAL INFORMATION
The Board is of the opinion that the Group is engaged in a single segment business, being the investment in solar power assets located
inNorth America and other countries forming part of the OECD in the Americas.
INCOME
Income comprises interest income (bank interest and loan interest), Management Services Agreement (MSA) fee and dividend income.
Interest income is recognised when it is probable that the economic benefits will flow to the Company and the amount of revenue can be
measured reliably. Loan interest income is accrued by reference to the principal outstanding and at the effective interest rate applicable,
which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net
carrying amount on initial recognition. Dividend income is recognised in profit or loss on the date on which the Group’s right to receive
payment is established.
No income is earned from contracts with customers and as such IFRS 15 has not been applied.
EXPENSES
Operating expenses are the Company’s costs incurred in connection with the on-going management of the Company’s investments and
administrative costs. Operating expenses are accounted for on an accruals basis.
The Company’s management and administration fees, finance costs and all other expenses are charged through the Statement of Profit
and Loss and Other Comprehensive Income.
Directly attributable acquisition costs of assets are capitalised on purchase of assets. Costs directly relating to the issue of Ordinary
Shares are charged to share premium.
NET GAIN OR LOSS ON INVESTMENTS AT FAIR VALUE THROUGH PROFIT AND LOSS
The Company recognises movements in the fair value of investments in subsidiaries through profit and loss.
TAXATION
The Company is approved as an Investment Trust Company under sections 1158 and 1159 of the Corporation Tax Act 2010 and Part
2 Chapter 1 Statutory Instrument 2011/2999 for accounting periods commencing on or after 25 May 2018. The approval is subject to
the Company continuing to meet the eligibility conditions of the Corporation Tax Act 2010 and the Statutory Instrument 2011/2999.
TheCompany intends to ensure that it complies with the Investment Trust Company regulations on an ongoing basis and regularly
monitors the conditions required to maintain Investment Trust Company status.
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Annual Report and Financial Statements 2024
FINANCIAL STATEMENTSCORPORATE GOVERNANCE FINANCIAL STATEMENTSCORPORATE GOVERNANCE
The main rate of corporation tax rate is 25%. Tax is recognised in the Statement of Profit and Loss and Other Comprehensive Income
except to the extent that it relates to the items recognised as direct movements in equity, in which case it is similarly recognised as a direct
movement in equity. Current tax is the expected tax payable on any taxable income for the period, using tax rates enacted or substantively
enacted at the end of the relevant period.
INVESTMENT IN SUBSIDIARIES
Subsidiaries are entities controlled by the Company. Control exists when the Company is exposed, or has rights, to variable returns from
its involvement with the subsidiary entity and has the ability to affect those returns through its power over the subsidiary entity.
In accordance with the exception under IFRS 10 Consolidated financial statements, an investment entity is not required to consolidate
its subsidiaries where certain conditions are met. The Company does not have any subsidiaries that provide investment management
services and are not themselves investment entities. As a result, the Company, being an investment entity, does not consolidate any of its
subsidiaries.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash at bank and deposits held with the bank.
TRADE AND OTHER RECEIVABLES
Trade and other receivables are recognised initially at fair value and subsequently stated at amortised cost less loss allowance which is
calculated using the provision matrix of the expected credit loss model, the effect of which is considered immaterial.
TRADE AND OTHER PAYABLES
Trade and other payables are recognised initially at fair value and subsequently stated at amortised cost.
EQUITY
Equity instruments issued by the Company are recorded at the amount of the proceeds received, net of directly attributable issue costs.
Costs not directly attributable to the issue are immediately expensed in the Statement of Profit and Loss and Other Comprehensive
Income. The Company’s capital is represented by the Ordinary Shares, Share Premium (until cancellation), Accumulated losses and
Capital Reduction Reserve.
Treasury shares
The Company recognises the purchase of its own equity instruments in treasury shares, which are deducted from the capital reduction
reserve. No gain or loss is recognised in the Statement of Comprehensive Income on the purchase, sale, issue or cancellation of the
Company’s own equity instruments.
FINANCIAL INSTRUMENTS
In accordance with IFRS 9, the Company classifies its financial assets and financial liabilities at initial recognition into the categories
of amortised cost or fair value through profit or loss. None of the financial instruments are classified as fair value through other
comprehensive income.
FINANCIAL ASSETS
The Company classifies its financial assets at amortised cost or fair value through profit or loss on the basis of both:
– The entity’s business model for managing the financial assets
– The contractual cash flow characteristics of the financial asset
FINANCIAL ASSETS MEASURED AT AMORTISED COST
A debt instrument is measured at amortised cost if it is held within a business model whose objective is to hold financial assets in order to
collect contractual cash flows and its contractual terms give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding. The Company includes in this category short-term non-financing receivables including cash
and financial instruments classified as trade and other receivables.
FINANCIAL ASSETS MEASURED AT FAIR VALUE THROUGH PROFIT LOSS
A financial asset is measured at fair value through profit or loss if:
a) its contractual terms do not give rise to cash flows on specified dates that are solely payments of principal and interest (SPPI) on the
principal amount outstanding; or
b) it is not held within a business model whose objective is either to collect contractual cash flows, or to both collect contractual cash
flows and sell; or
c) it is classified as held for trading (derivative contracts in an asset position).
5 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
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Annual Report and Financial Statements 2024
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2024
The Company’s investment in subsidiaries (which comprises both debt and equity) is held at fair value through profit or loss under IFRS
9 as the equity portion of the investment does not meet the SPPI test nor will the Company elect to designate the investments at fair
value through other comprehensive income. The debt investment forms part of a group of assets that are managed and the performance
evaluated on a fair value basis.
The Company includes in this category equity instruments including investments in subsidiaries (which comprises both debt and equity).
There are no consolidated subsidiaries.
FINANCIAL LIABILITIES MEASURED AT AMORTISED COST
This category includes all financial liabilities, other than those measured at fair value through profit or loss, including short-term payables.
RECOGNITION AND DERECOGNITION
Financial assets are recognised on trade date, the date on which the Company commits to purchase or sell an asset. A financial asset is
derecognised where the rights to receive cash flows from the asset have expired, or the Company has transferred its rights to receive
cash flows from the asset. The Company derecognises a financial liability when the obligation under the liability is discharged, cancelled
or expired.
IMPAIRMENT OF FINANCIAL ASSETS
While cash and cash equivalents are also subject to the impairment requirements of IFRS 9, there has been no impairment loss identified.
Investment held at fair value through profit or loss is not subject to IFRS 9 impairment requirements.
The Company holds trade receivables with no financing component and which have maturities of less than 12 months at amortised cost
and, as such has chosen to apply an approach similar to the simplified approach for expected credit losses (ECL) under IFRS 9 to all of its
trade receivables.
Interest receivable on cash balances, fall within the scope of IFRS 9. The Company has completed some high-level analysis and forward
looking qualitative and quantitative information, the Directors consider the interest receivable to be low credit risk as the deposits are held
with reputable financial institutions.
For interest receivable that is low credit risk, IFRS 9 allows a 12-month expected credit loss to be recognised. The Directors have
concluded that any ECL on the interest receivable would be immaterial to the Annual Financial Statements and therefore no impairment
adjustments were accounted for.
FAIR VALUE MEASUREMENT AND HIERARCHY
Fair value is the price that would be received on the sale of an asset, or paid to transfer a liability, in an orderly transaction between market
participants at the measurement date. The fair value measurement is based on the presumption that the transaction takes place either in
the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market. It is based on the
assumptions that market participants would use when pricing the asset or liability, assuming they act in their economic best interest.
A fair value measurement of a non-financial asset takes into account the best and highest value use for that asset.
The level in the fair value hierarchy within which the fair value measurement is categorised is determined on the basis of the lowest level
input that is significant to the fair value measurement in its entirety. For this purpose significance of the inputs is assessed against the
fair value measurement in its entirety. Assessing the significance of a particular input to the fair value measurement in its entirety requires
judgement, considering factors specific to the asset or liability. If a fair value measurement uses observable inputs that require significant
adjustment based on unobservable inputs or any other significant unobservable inputs, that measurement is a Level 3 measurement.
The fair value hierarchy to be applied under IFRS 13 is as follows:
1. Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
2. Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly
observable.
3. Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For assets and liabilities that are carried at fair value and which will be recorded in the financial information on a recurring basis, the
Company will determine whether transfers have occurred between levels in the hierarchy by reassessing categorisation at the end of
each reporting period.
5 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
87
OVERVIEW STRATEGIC REPORT
US Solar Fund plc
Annual Report and Financial Statements 2024
FINANCIAL STATEMENTSCORPORATE GOVERNANCE FINANCIAL STATEMENTSCORPORATE GOVERNANCE
6. INTEREST INCOME
31 December 2024
USD
‘000
31 December 2023
USD
‘000
Bank interest – 217
– 217
7. ADMINISTRATIVE AND OTHER EXPENSES
31 December 2024
USD
‘000
31 December 2023
USD
‘000
Administrative fees 187 195
Director & officer insurance 85 90
Directors’ fees 301 259
Fees payable to the Company’s Auditor for the audit of the Company’s financial statements 244 199
Fees payable to the Company’s Auditor for non-audit services
50
23 22
Investment management expenses – 1,290
Investment management fees 2,276 2,920
Legal and professional fees 217 1,626
Regulatory fees 19 40
Sundry expenses 409 423
3,761 7,064
The Company has no employees and therefore no employee related costs have been incurred
50 The non-audit services provided relate to the review of the interim financial statements.
88
US Solar Fund plc
Annual Report and Financial Statements 2024
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2024
8. TAXATION
The Company is approved as an Investment Trust Company with effect as of 16 April 2019 and is subject to tax at the UK corporation tax
rate of 25%. An Investment Trust Company can claim a corporation tax deduction for dividends designated as interest distributions that
are derived from net interest income. Therefore, no UK corporation tax charge has been recognised by the Company for the period ended
31 December 2024.
31 December 2024
USD
‘000
31 December 2023
USD
‘000
a. Tax charge in profit or loss:
– UK corporation tax – –
31 December 2024
USD
‘000
31 December 2023
USD
‘000
b. Reconciliation of the tax charge for the year
Loss before tax (34,882) (43,056)
Tax at UK main rate of 25% (2023: 25%) (8,720) (10,127 )
Tax effect of:
Fair value losses on investments not taxable 10,618 14,797
Foreign exchange gain and loss not taxable 3 8
Non-deductible expenditure 3 70
Deferred tax not recognised on expenses not utilised 22 80
Non-taxable dividend income (1,428) 4,310)
Dividends designated as interest distributions (498) (518)
Tax charge for the year – –
The tax credit of $498,000 (2023: $518,000) arose as a result of dividends payable in respect of the year being designated as interest
distributions in accordance with UK tax legislation specific to Investment Trust Companies. Investment trust companies which have
been approved by HM Revenue & Customs are exempt from UK corporation tax on their capital gains. Due to the Company’s status
as an approved investment trust company, and the intention to continue meeting the conditions required to maintain that approval for
the foreseeable future, the Company has not provided for deferred tax in respect of any gains or losses arising on the revaluation of
its investments. The Company has an unrecognised deferred tax asset of $99,721 (2023: $107,000) in respect of tax losses which are
available to be carried forward and offset against future taxable profits. A deferred tax asset has not been recognised as it is considered
unlikely that the Company will generate taxable profits in excess of deductible expenses in future periods. The unrecognised deferred tax
asset has been calculated using a corporation tax rate of 25% (2023: 25%).
9. EARNINGS PER SHARE
Earnings per share amounts are calculated by dividing the profit or loss for the year attributable to ordinary equity holders of the Company
by the weighted average number of Ordinary Shares in issue during the year. As there are no dilutive instruments outstanding, basic and
diluted earnings per share are identical.
31 December 2024
USD
‘000
31 December 2023
USD
‘000
Net loss attributable to ordinary shareholders (34,882) (43,056)
Weighted average number of Ordinary Shares for the year 318,682 332,192
Earnings per share – Basic and diluted (cents per share) (10.94) (12.96)
89
OVERVIEW STRATEGIC REPORT
US Solar Fund plc
Annual Report and Financial Statements 2024
FINANCIAL STATEMENTSCORPORATE GOVERNANCE FINANCIAL STATEMENTSCORPORATE GOVERNANCE
10. FINANCIAL INSTRUMENTS
10.1 FINANCIAL ASSETS
31 December 2024
USD
‘000
31 December 2023
USD
‘000
Financial asset
Financial assets at fair value through profit and loss:
Investment in subsidiary 193,251 254,723
Financial assets at amortised cost:
Trade and other receivables 846 3,088
Cash at bank 890 1,554
Total financial assets 194,141 256,277
10.2 FINANCIAL LIABILITIES
31 December 2024
USD
‘000
31 December 2023
USD
‘000
Financial liabilities
Financial liabilities at amortised cost:
Trade and other payables 835 1,135
Total financial liabilities 835 1,135
At the balance sheet date, all financial assets and liabilities were measured at amortised cost except for the investment in subsidiary which
is measured at fair value.
10.3 FINANCIAL RISK MANAGEMENT
The Company is exposed to certain risks through the ordinary course of business and the Company’s financial risk management objective
is to minimise the effect of these risks. The management of risks is performed by the Directors of the Company and the exposure to each
financial risk considered potentially material to the Company, how it arises and the policy for managing it is summarised below.
Credit risk
The Company is exposed to third-party credit risk in several instances and the possibility that counterparties with which the Company and
its subsidiaries, together the Group, contracts may fail to perform their obligations in the manner anticipated by the Group.
Counterparty credit risk exposure limits are determined based on the credit rating of the counterparty. Counterparties are assessed and
monitored on the basis of their ratings from Standard & Poor’s and/or Moody’s. No financial transactions are permitted with counterparties
with a credit rating of less than BBB- from Standard & Poor’s or Baa3 from Moody’s unless specifically approved by the Board.
Cash and other assets that are required to be held in custody will be held at bank. Cash and other assets may not be treated as
segregated assets and will therefore not be segregated from the bank’s own assets in the event of the insolvency of a custodian. Cash
held with the bank will not be treated as client money subject to the rules of the FCA and may be used by the bank in the ordinary course
of its own business. The Company will therefore be subject to the creditworthiness of the bank. In the event of the insolvency of the bank,
the Company will rank as a general creditor in relation thereto and may not be able to recover such cash in full, or at all.
Credit risk is mainly at subsidiary level where the capital commitments are being made and is managed by diversifying exposures among
a portfolio of counterparties and through applying credit limits to those counterparties with lower credit standing.
Credit exposures may also be managed using credit derivatives. No credit derivatives were in place as at 31 December 2024.
Cash and bank deposits are held with major international financial institutions who each hold a Moody’s credit rating of A2 or higher.
Liquidity risk
The objective of liquidity management is to ensure that all commitments which are required to be funded can be met out of readily
available and secure sources of funding. The Company’s only financial liabilities are trade and other payables. The Company intends to
hold sufficient cash across the Company and Subsidiary’s operating accounts to meet the working capital needs over a horizon of at
least the next six months. Cash held at subsidiary level is available to meet the obligations of the Company. As at 31 December 2024 USF
Holding Corp. held free cash at bank of $1.647 million. Cash flow forecasts are prepared on a monthly basis for a rolling two-year period to
assist in the ongoing analysis of short term cash flow.
90
US Solar Fund plc
Annual Report and Financial Statements 2024
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2024
The following table reflects the maturity analysis of financial liabilities.
As at 31 December 2024
<1 year
USD
‘000
1 to 2 years
USD
‘000
2 to 5 years
USD
‘000
>5 years
USD
‘000
Total
USD
‘000
Financial liabilities
Financial liabilities at amortised cost:
Trade and other payables 835 – – – 835
Total financial liabilities 835 – – – 835
As at 31 December 2023
<1 year
USD
‘000
1 to 2 years
USD
‘000
2 to 5 years
USD
‘000
>5 years
USD
‘000
Total
USD
‘000
Financial liabilities
Financial liabilities at amortised cost:
Trade and other payables 1,135 – – – 1,135
Total financial liabilities 1,135 – – – 1,135
Market risk
Market risk is the risk that the fair value or future cash flows of financial instruments will fluctuate due to changes in market variables such
as changes in inflation, merchant power price curves, foreign exchange rates and interest rates.
Inflation risk
The Group cash flows are positively correlated to inflation over the useful life of the investment portfolio. However, as the Group’s revenue
is fixed in the short to medium term through PPAs executed with credit worthy counterparties, the cash flows are negatively correlated to
inflation over the short to medium terms. The Group manages exposure to this risk by carrying out detailed cash forecasting and holding
sufficient cash reserves, thereby mitigating the cash flow impacts.
Interest rate risk
Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows from underlying investments therefore
impacting the value of investments at fair value through profit or loss. The Group has limited exposure to interest rate risk as the underlying
borrowings within the unconsolidated investee entities are largely hedged through interest rate swap arrangements. The Group’s
corporate debt facility is unhedged on the basis it is utilised as an investment bridging facility and therefore drawn for a relatively short
period of time. The facility was undrawn at 31 December 2024.
Foreign currency risk
The Group has limited exposure to non USD transactions therefore the foreign currency risk is minimal.
Capital risk management
The capital structure of the Company at year-end consists of equity attributable to equity holders of the Company, comprising issued
capital, reserves and accumulated loss. The Company has no return on capital benchmark, but the Board continues to monitor the
balance of the overall capital structure so as to maintain investor and market confidence. The Company is not subject to any external
capital requirements.
10. FINANCIAL INSTRUMENTS CONTINUED
91
OVERVIEW STRATEGIC REPORT
US Solar Fund plc
Annual Report and Financial Statements 2024
FINANCIAL STATEMENTSCORPORATE GOVERNANCE FINANCIAL STATEMENTSCORPORATE GOVERNANCE
10.4 FAIR VALUE MEASUREMENT
The following table analyses within the fair value hierarchy the Company’s assets and liabilities measured at fair value at 31 December
2024:
Level 1
USD
‘000
Level 2
USD
‘000
Level 3
USD
‘000
Investment in subsidiary – – 193,251
The following table analyses within the fair value hierarchy the Company’s assets and liabilities measured at fair value at 31 December
2023:
Level 1
USD
‘000
Level 2
USD
‘000
Level 3
USD
‘000
Investment in subsidiary – – 254,723
The investments recognised at fair value through profit and loss are classified as Level 3 in the fair value hierarchy and the reconciliation in
the movement of this Level 3 investment is presented below. No transfers between levels took place during the year.
31 December 2024
USD
‘000
31 December 2023
USD
‘000
Opening balance 254,723 317,6 34
Less: Return of capital (19,000) –
Total fair value movement through the profit or loss (capital) (42,472) (62,911)
Closing balance 193,251 254,723
The Company’s policy is to recognise transfers into and transfers out of fair value hierarchy levels as of the date of the event or change in
circumstances that caused the transfer.
In accordance with the guidelines of the Company’s valuation policy, all assets held as at 31 December 2024 have been valued by an
external valuation expert.
Subsidiary information Place of Business Percentage Ownership
USF Holding Corp Delaware, USA 100%
Opening balance
USD
‘000
Equity acquisitions
during the year
USD
‘000
Loans: principal
advanced during the year
USD
‘000
Net fair value movement
during the year
USD
‘000
Closing balance:
equity and loans
USD
‘000
USF Holding Corp. 254,723 (19,000) – (42,472) 193,251
From establishment to 31 December 2024, the Company has funded USF Holding Corp. with equity and debt, with the total amount
of debt funding based on several criteria, including an arm’s length gearing test satisfying thin capitalisation rules. Note 10 of these
financial statements contains the components of the 31 December 2024 equity and loans balance. Fair value relates to USF's share of the
underlying solar asset investment and cash flows only (i.e. balances exclude tax equity investment amounts) and expected returns and fair
values are modelled after allowing for distributions to tax equity investors. Included in the total fair value movement of ($42.5 million) are
dividends paid to USF from underlying US entities of $5.7 million. In the current period there was also a return of capital from underlying
US entities of $19 million in order to facilitate the tender offer made by the Company in the year.
10. FINANCIAL INSTRUMENTS CONTINUED
92
US Solar Fund plc
Annual Report and Financial Statements 2024
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2024
On 28 June 2019, the Company entered into a MSA with its subsidiary USF Holding Corp. The Board of the Company, with further
assistance by delegation of its duties to the Investment Manager, provides strategic management services to USF Holding Corp relating
toits current portfolio of US solar assets and potential acquisitions.
A list of the significant investments in unconsolidated subsidiaries, including the name, country of incorporation and proportion of
ownership is shown below:
Subsidiary information Place of Business Percentage Ownership
USF Avon LLC USA 100%
USF Bristol LLC USA 100%
USF Surry LLC USA 100%
USF Essex LLC USA 100%
USF Cheshire LLC USA 100%
USF Dorset Holding LLC USA 100%
VALUATION METHODOLOGY
VALUATION PROCESS
The NAV approved by the USF Board takes into account the overall valuations of portfolio assets assessed by the Independent Valuer on
a semi-annual basis as at 30 June and 31 December 2024. These valuations form part of the NAV calculation of the Company, which is
subject to review/audit.
The Company engaged KPMG as the Independent Valuer to calculate the fair value of its assets. KPMG is one of the largest valuation
firms in the US with significant experience in estimating the fair value of solar and other renewable energy assets. In line with USF policy,
allof its operating assets were externally valued at 31 December 2024.
Based on the valuation range provided by the Independent Valuer, the Administrator, in conjunction with the Investment Manager,
calculates the NAV and the NAV per Ordinary Share, and submits the same to the Board for its approval. The valuation has been
calculated in accordance with USPAP as applied to PV electricity generation systems in the US.
Fair value for operational solar assets is derived from a DCF methodology using pre-tax cash flows and a pre-tax discount rate. In a
DCF analysis, the fair value of the Solar Power Asset is the present value of the asset’s expected future cash flows, based on a range of
operating assumptions for revenues and costs and an appropriate discount rate range.
The Independent Valuer has reviewed a range of sources in determining the fair market valuation of the solar assets, including but not
limited to:
– discount rates publicly disclosed by the Company’s global peers;
– discount rates applicable to comparable infrastructure asset classes;
– quality of cash flow forecasts in terms of operations;
– the level of gearing at each investment level; and
– capital asset price model outputs and implied risk premium over relevant risk-free rates
A broad range of assumptions are used in valuation models. Where possible, assumptions are based on observable long-term historical
market or market observations. The budgeted operational costs are based on technical data and the implicit financing costs for leveraged
investments are based on market data. The Company also engages technical experts to provide long-term electricity price forecast which
is a critical datapoint used to forecast revenues.
10. FINANCIAL INSTRUMENTS CONTINUED
93
OVERVIEW STRATEGIC REPORT
US Solar Fund plc
Annual Report and Financial Statements 2024
FINANCIAL STATEMENTSCORPORATE GOVERNANCE FINANCIAL STATEMENTSCORPORATE GOVERNANCE
DISCOUNT RATES
Discount rates used in the valuation of the portfolio are derived from long term government bond yields, plus an investment specific risk
premium, reflecting the risk of investing in that particular investment. The discount rate also reflects the Independent Valuer’s view of the
transactional activity in the relevant market along with implied execution discount rates.
As at 31 December 2024, the weighted average discount rate was 10.8% (December 2023: 8.8%). The discount rates are presented on
a pre-tax basis.
10.5 SENSITIVITY ANALYSIS
Set out below are the initial indications of the key assumptions the Directors believe would have a material impact upon the fair value of
the investments should they change. In the absence of an operating business model for each underlying renewable energy asset, the
sensitivities have been conducted on the acquisition models of these assets. The following sensitivities assume the relevant input
is changed over the entire useful life of each of the underlying renewable energy assets, while all other variables remain constant.
All sensitivities have been calculated independently of each other.
The Directors consider the changes in inputs to be within a reasonable expected range based on their understanding of market
transactions. This is not intended to imply that the likelihood of change or that possible changes in value would be restricted to this range.
Change in input Change in NAV
USD (m)
Change in NAV
per share
USD (c)
Discount rate +1% -19.74 -6.41
-1% +23.61 +7. 6 7
Electricity production (change from P50) P90 -31.59 -10.26
P10 +28.61 +9.29
Merchant period electricity prices -10% -19.76 -6.42
+10% +18.23 +5.92
Operations and maintenance expenses +10% -15.52 -5.04
-10% +17.0 9 +5.55
Operating life -3 years -6.60 -2.14
+3 years +5.83 +1.8 9
Tax rate +5% -4.05 -1.32
-5% +4.03 +1.31
Inflation rate +1% +19.6 3 +6.38
-1% -15.21 -4.94
Operating expenses inflation rate +1% -13.33 -4.33
-1% +12.24 +3.98
10. FINANCIAL INSTRUMENTS CONTINUED
94
US Solar Fund plc
Annual Report and Financial Statements 2024
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2024
11. TRADE AND OTHER RECEIVABLES
31 December 2024
USD
‘000
31 December 2023
USD
‘000
Amounts receivable from subsidiary (note 16) 801 2,888
Prepayments 45 67
VAT receivable – 133
846 3,088
12. TRADE AND OTHER PAYABLES
31 December 2024
USD
‘000
31 December 2023
USD
‘000
Creditors and operating accruals 345 916
Investment management fee accrual 488 219
VAT payable 2 –
835 1,135
13. SHARE CAPITAL
Ordinary
shares
NUMBER
‘000
Treasury
shares
USD
‘000
Share
capital
USD
‘000
Share
premium
USD
‘000
Capital
reduction
reserve
USD
‘000
Total
share capital
reserves
USD
‘000
As at 31 December 2023 332,192 – 3,322 128,036 175,008 306,366
Return of capital – – – – (18,578) (18,578)
Share transaction costs – – – – (331) (331)
Share buyback (24,359) 24,359 – – – –
As at 31 December 2024 307,833 24,359 3,322 128,036 156,099 287,457
The Company has an authorised share capital of 500,000,000 Ordinary Shares.
On incorporation the Company issued one Ordinary Share of $0.01 which was fully paid up.
Following a successful application to the High Court and lodgement of the Company’s statement of capital with the Registrar of
Companies, the Company was permitted to cancel a portion of its share premium account. This was effected on 21 June 2019 by a
transfer of the balance of $194 million from the share premium account to the capital reduction reserve. The capital reduction reserve is
classed as a distributable reserve and dividends to be paid by the Company are able to be offset against this reserve.
On 3 May 2024 the Company announced the commencement of the Tender Offer to return up to $19 million to shareholders. On 11 June
2024 the Company announced that following the results of the Tender Offer, 24,358,974 shares would be repurchased under the Tender
offer, at a price of $0.764 per share. These shares are held in Treasury.
95
OVERVIEW STRATEGIC REPORT
US Solar Fund plc
Annual Report and Financial Statements 2024
FINANCIAL STATEMENTSCORPORATE GOVERNANCE FINANCIAL STATEMENTSCORPORATE GOVERNANCE
14. RESERVES
The nature and purpose of each of the reserves included within equity at 31 December 2024 are as follows:
– Share premium reserve: represents the surplus of the gross proceeds of share issues over the nominal value of the shares, net of
thedirect costs of equity issues and net of conversion amount. As at 31 December 2024 the share premium account has a balance
of$128,036,000 (2023: $128,036,000)
– Capital reduction reserve: represents a distributable reserve (which may be utilised in respect of dividend payouts) created following
a court approved reduction in capital. As at 31 December 2024 the capital reduction reserve has a balance of $156,099,000 (2023:
$175,008,000).
– Capital reserve: represents cumulative net gains and losses, of a capital nature, recognised in the Statement of Profit and Loss and
Other Comprehensive Income and associated tax allocations arising from the MSA fee income and interest distributions. As at 31
December 2024 the capital reserve reflects a loss of $(96,957,000) (2023: $(54,473,000))
– Retained earnings represent cumulative net gains and losses, of an income nature, recognised in the Statement of Profit and Loss
and Other Comprehensive Income and associated tax allocations arising from the MSA fee income and interest distributions.
As at 31 December 2024, retained earnings reflects a profit of $3,652,000 (2023: $6,337,000)
– During the year, the Company declared dividends totalling $10,287,000 (31 December 2023: $18,736,000) of which $10,287,000
(31December 2023: $18,736,000) has been paid as at 31 December 2024
– During the period c.$18.9 million was distributed on account of the tender offer that concluded in June 2024 ($18.6 million returned
toshareholders and $0.3 million of costs incurred by the Company in administering the tender offer)
The only movements in these reserves during the year are disclosed in the statement of changes in equity.
15. NET ASSET VALUE PER SHARE
Basic NAV per share is calculated by dividing the Company’s net assets as shown in the statement of financial position that are
attributable to the ordinary equity holders of the Company by the number of Ordinary Shares outstanding at the end of the period.
As there are no dilutive instruments outstanding, basic and diluted NAV per share are identical.
31 December 2024
USD
‘000
31 December 2023
USD
‘000
Net assets per Statement of Financial Position 194,152 258,230
Ordinary Shares in issue as at 31 December 307,833 3 32,192
NAV per share – Basic and diluted 0.63 0.78
16. TRANSACTIONS WITH RELATED PARTIES
The Company and the Directors are not aware of any person who, directly or indirectly, jointly or severally, exercises or could exercise
control over the Company. The Company does not have an ultimate controlling party.
Details of related parties are set out below:
NON-EXECUTIVE DIRECTORS
Directors are paid fees of £44,100 per annum. In addition to this, Gillian Nott receives £23,940 per annum in respect of serving as Chair of
the Board and Jamie Richards receives £11,025 per annum in respect of serving as Chair of the Audit committee.
Total Directors’ fees of $300,777 (2023: $237,000) were incurred in respect of the year with none being outstanding and payable at the
year-end (2023: $nil).
SUBSIDIARY
The Company previously issued loans totalling $43 million to its subsidiary USF Holding Corp. The two loans were issued on 26 June 2019
and 31 December 2019 and are repayable seven years from issuance. The loans bear interest at rates of 4.75% and 4.10% respectively,
payable semi-annually in arrears.
96
US Solar Fund plc
Annual Report and Financial Statements 2024
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2024
16. TRANSACTIONS WITH RELATED PARTIES CONTINUED
INVESTMENT MANAGER
The Investment Manager is entitled to management fees under the terms of the IMA. The Company shall pay to the Investment Manager
an annual fee (exclusive of value added tax, which shall be added where applicable) payable quarterly in arrears calculated
at the rate of:
Assets under management Fee based on NAV
< $500 million 1.0% per annum
$500 million to $1 billion 0.9% per annum
> $1 billion 0.8% per annum
Based on the Net Asset Value on the last Business Day of the relevant quarter.
The Management Fee due in respect of each quarter shall be invoiced by the Manager to the Company as at the final Business Day of the
relevant quarter, and shall be due and payable in the following manner:
a) no later than 10 Business Days after the Payment Date, 90% of the Management Fee shall be paid to the Manager in cash to such
bank account as the Manager may nominate for this purpose; and
b) 10% of the Management Fee shall be paid to the Manager or an Associate (as directed by the Manager) in the form of Ordinary Shares
in accordance with the provisions stated in the IMA.
For the avoidance of doubt, where there are C Shares in issue, the advisory fee will be charged on the Net Asset Value attributable to the
Ordinary Shares and C Shares respectively. On 10 November 2020, the Board approved a recommendation from the Investment Manager
to have the Administrator arrange for 10% of its Management Fee to be applied to purchase Ordinary USF Shares in the secondary
market. From that time, the Company ceased issuing shares to the Investment Manager.
A management fee of $2.3 million (2023: $3.0 million) was incurred during the year, of which $488,000 (2023: $256,000) remained payable
at 31 December 2024. In addition to the management fee, the Manager shall also be entitled to payment of the following:
a) a fee for any successful arrangement of debt services payable at a rate of 0.5% of the debt face value; and
b) a fee for any oversight of asset construction services payable at market rates, negotiated on an arms’ length basis and subject to the
approval of the Board.
The Manager provides debt arranging services to the Fund, including contacting and liaising with capital providers, negotiating borrowing
terms, obtaining credit ratings, implementing interest rate hedging strategies and executing documentation. The Manager was successful
in securing debt, interest rate hedging and letter of credit facilities at competitive terms for the Fund, providing diversification to the Fund’s
capital sources.
For this service, the Manager receives debt arranging fees of 0.5% of the face value of new third-party debt and letter of credit facilities.
Debt arrangement fees totalling $nil were incurred during the year (2023 $nil). Asset management and construction services fees totalling
$1.2 million ($0.3 million accrued; $0.9 million paid) were incurred during the year (2023: $0.3 million accrued, $0.8 million paid).
17. CAPITAL COMMITMENTS
The Company had no contingencies and no other significant capital commitments at the reporting date.
18. POST BALANCE SHEET EVENTS
On 9 April 2025, the Company declared a dividend of 0.57 cents per Ordinary Share for the period ending 31December 2024.
97
OVERVIEW STRATEGIC REPORT
US Solar Fund plc
Annual Report and Financial Statements 2024
FINANCIAL STATEMENTSCORPORATE GOVERNANCE
In accordance with ESMA Guidelines on Alternative Performance Measures (APMs) the Board has considered the APMs included in the
Annual Report and financial statements which require further clarification. An APM is defined as a financial measure of historical or future
financial performance, financial position, or cash flows, other than a financial measure defined or specified in the applicable financial
reporting framework. APMs included in the Annual Report and financial statements are identified as non-GAAP measures and are defined
within the Glossary
APM 31 Dec 2024 31 Dec 2023
Discount to
NAV
The percentage by which the closing share price on comparable dates exceeds/(falls short
of) the NAV per share. There is no direct reconciliation to the financial statements, being a
calculation instead derived from the Company’s share price.
(31.8%) (30.8%)
Distributions
to
shareholders
Represents total distributions to shareholders including dividends paid and capital returned
via tender offer, as disclosed in the financial statements. This measure provides information
on the Company’s total distributions to shareholders. Dividends paid and capital returned
via tender offer can be found disclosed in the financial statements and notes to the
financial statements.
$28.9m $18.8m
Dividend per
share
Represents dividends paid per Ordinary Share issued, as disclosed in the financial
statements. This measure provides information on the Company’s dividend performance.
Dividends paid and number of issued shares can be found disclosed in the financial
statements and notes to the financial statements.
2.25 cps 5.66 cps
Gearing The face value of drawn debt as a percentage of the Gross Asset Value
(GAV – calculated as NAV plus outstanding debt). This measure shows the portfolio’s debt
ratio. As this measure is presented on a portfolio basis, there is no near comparable in the
financial statements.
41% 36%
NAV Net Asset Value. Represents the equity attributable to equity holders of the parent in the
balance sheet. This terminology is used as it is common investment sector terminology and
so is the most understandable to the users of the Annual Report. Components of NAV are
further discussed throughout the Annual Report, including from page 26.
$194.2m $258.2m
NAV per
share
This is a measure of Net Asset Value (or NAV) per Ordinary Share in the Company and is
calculated as the NAV divided by the total number of shares in issue at the balance sheet
date. Represents the equity attributable per share to equity holders of the parent in the
Balance Sheet. This terminology is used as it is common investment sector terminology
and so is the most understandable to the users of the Annual Report.
$0.63 $0.78
NAV total
return
This is a measure of Net Asset Value (or NAV) total return. NAV total return is based on
dividends paid throughout the period and NAV movement since inception. There is no
direct reconciliation to the financial statements, being a calculation instead derived from
the Company’s NAV. However a nearest comparison were this measure based on a figure
in the financial statements is provided in the Strategic Report, Investor Relations, Total
Shareholder Return and NAV total return paragraph.
(13.4%) (1.7%)
Operational
dividend
cover
Calculated as net operating cash generation divided by dividends paid in the year. Seeks
to reflect the sustainability of the level of dividends paid by looking at the underlying cash
generation from the portfolio and excludes certain components to reflect the coverage from
operational revenue generation in the period. As this measure is presented on a portfolio
basis, there is no near comparable in the financial statements. Dividends paid can be found
disclosed in the financial statements and notes to the financial statements.
1.10 x 0.50x
Project
revenue
Defined as revenue derived from the Company’s portfolio, excluding proceeds from the
sale of Mount Signal 2. As this measure is presented on a portfolio basis, there is no near
comparable in the financial statements. Dividends paid can be found disclosed in the
financial statements and notes to the financial statements.
$44.9m $46.7m
Total dividend
cover
Total dividend cover is calculated as net portfolio cash generation divided by dividends paid
in the year, with an adjustment for items such as cash flow reserves carried forward from
operating cash flows generated in prior periods. As this measure is presented on a portfolio
basis, there is no near comparable in the financial statements. Dividends paid can be found
disclosed in the financial statements and notes to the financial statements.
0.57x 0.95x
TSR Share price appreciation plus dividends assumed to be reinvested since IPO. The total
return based on the NAV appreciation plus dividends paid since the IPO. There is no
direct reconciliation to the financial statements, being a calculation instead derived from
the Company’s share price. However a nearest comparison were this measure based on
a figure in the financial statements is provided in the Strategic Report, Investor Relations,
TotalShareholder Return and NAV total return paragraph.
(44.3%) (34.4%)
ALTERNATIVE PERFORMANCE MEASURES
98
US Solar Fund plc
Annual Report and Financial Statements 2024
AGM The Company’s Annual General Meeting
AIC Association of Investment Companies
AIFM Alternative investment fund manager
AIIA The Company’s Investment Manager, Amber Infrastructure Investment Advisor, LLC, a member of the
Amber Infrastructure Group
Amber Amber Infrastructure Group
Amber Infrastructure
Group
Amber Infrastructure Group Holdings Limited and its subsidiaries
APMs In accordance with ESMA Guidelines on Alternative Performance Measures (APMs) the Board has
considered the APMs included in the Annual Report and financial statements which require further
clarification. An APM is defined as a financial measure of historical or future financial performance,
financial position, or cash flows, other than a financial measure defined or specified in the applicable
financial reporting framework. APMs included in the Annual Report and financial statements are
identified as non-GAAP measures and are defined within this glossary
Articles The articles of association of the Company
Average NAV Average of published NAVs for the relevant periods
AVERT Avoided Emissions and geneRation Tool
COD Commercial Operations Date
Company US Solar Fund plc (USF) or “the Group” when referring to the Company and its investment portfolio
subsidiaries.
CSRD Corporate Sustainability Reporting Directive
DCF Discounted cash flow
Dividend paid Non-GAAP measure. Represents dividends paid, as disclosed in the financial statements. This measure
provides information on the Company’s dividend performance. Dividends paid can be found disclosed
in the financial statements and notes to the financial statements.
Dividend per share Non-GAAP measure. Represents dividends paid per Ordinary Share issued, as disclosed in the
financial statements. This measure provides information on the Company’s dividend performance.
Dividends paid and number of issued shares can be found disclosed in the financial statements and
notes to the financial statements.
ECL Expected credit losses
ESG Environmental, Social and Governance
EFRAG European Financial Reporting Advisory Group
EU Taxonomy EU Taxonomy for Sustainable Activities
FCA Financial Conduct Authority
FPPP Financial Position and Prospectus Procedures
FRC The Financial Reporting Council
GAV Gross asset value
Gearing Non-GAAP measure. The face value of drawn debt as a percentage of the Gross Asset Value (GAV
– calculated as NAV plus outstanding debt). This measure shows the portfolio’s debt ratio. As this
measure is presented on a portfolio basis, there is no near comparable in the financial statements.
GWh Gigawatt hours
GHG Greenhouse gas emissions
IFRS International Financial Reporting Standards
IMA Investment Management Agreement
Investment Manager Amber Infrastructure Investment Advisor LLC, a member of the Amber Infrastructure Group appointed
as the Company’s Investment Manager on 1 December 2023. Prior to 1 December 2023, the Company
was managed by New Energy Solar Manager, Pty Ltd.
IPO The Company’s initial public offering completed on 11 April 2019 made pursuant to a prospectus dated
26 February 2019
GLOSSARY
Including Alternative Performance Measures
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OVERVIEW STRATEGIC REPORT
US Solar Fund plc
Annual Report and Financial Statements 2024
FINANCIAL STATEMENTSCORPORATE GOVERNANCE
IRA Inflation Reduction Act
ISSB International Sustainability Standards Board
MS2 Mount Signal 2 Project: a 200MW solar farm located in southern California. The Company sold its 50%
interest in MS2 in June 2023.
MSA Management Services Agreement (MSA)
NAV Net Asset Value. Represents the equity attributable to equity holders of the parent in the balance
sheet. This terminology is used as it is common investment sector terminology and so is the most
understandable to the users of the Annual Report. Components of NAV are further discussed
throughout the Annual Report, including from page 26.
NAV per Share Non-GAAP measure. This is a measure of Net Asset Value (or NAV) per Ordinary Share in the Company
and is calculated as the NAV divided by the total number of shares in issue at the balance sheet date.
Represents the equity attributable per share to equity holders of the parent in the Balance Sheet. This
terminology is used as it is common investment sector terminology and so is the most understandable
to the users of the Annual Report.
NAV total return Non-GAAP measure. This is a measure of Net Asset Value (or NAV) total return. NAV total return is
based on dividends paid throughout the period and NAV movement since inception. There is no direct
reconciliation to the financial statements, being a calculation instead derived from the Company’s
NAV. However a nearest comparison were this measure based on a figure in the financial statements
is provided in the Strategic Report, Investor Relations, Total Shareholder Return and NAV total return
paragraph.
Net-zero Net-zero refers to balancing the amount of emitted greenhouse gases with the equivalent emissions
that are either offset or sequestered. This should primarily be achieved through a rapid reduction in
carbon emissions, but where zero carbon cannot be achieved, offsetting through carbon credits or
sequestration through rewilding or carbon capture and storage needs to be utilised
O&M Operations and maintenance
OECD Organisation for Economic Co-operation and Development
Offtaker Purchaser of electricity and/or RECs under a PPA and/or a REC Agreement (as defined in Part XI
(Glossary of Terms) of the Prospectus)
Operational dividend cover Non-GAAP measure. Calculated as net operating cash generation divided by dividends paid in the
year. Seeks to reflect the sustainability of the level of dividends paid by looking at the underlying
cash generation from the portfolio and excludes certain components to reflect the coverage from
operational revenue generation in the period. As this measure is presented on a portfolio basis, there is
no near comparable in the financial statements. Dividends paid can be found disclosed in the financial
statements and notes to the financial statements.
Ordinary Share Ordinary Shares with a nominal value of $0.01 each in the capital of the Company issued and
designated as ‘Ordinary Shares’ of such class (denominated in such currency) as the Directors may
determine in accordance with the Articles and having such rights and being subject to such restrictions
as are contained in the Articles.
PAI Principal Adverse Impact
PCAF Partnership for Carbon Accounting Financials
Portfolio cash flows Calculated as total project revenue after deducting project operating expenses, payments to tax equity
and portfolio debt expenses as set out in the Operating Review: Financial Management section. As
this measure is presented on a portfolio basis, there is no near comparable in the financial statements.
Dividends paid can be found disclosed in the financial statements and notes to the financial statements.
PPA Power purchase agreement (as defined in Part XI (Glossary of Terms) of the Prospectus)
Premium/(discount) to NAV Non-GAAP measure. The percentage by which the closing share price on comparable dates exceeds/
(falls short of) the NAV per share. There is no direct reconciliation to the financial statements, being a
calculation instead derived from the Company’s share price.
PRI The UN-backed Principles for Responsible Investment
Project revenue Non-GAAP measure. Defined as revenue derived from the Company’s portfolio, excluding proceeds
from the sale of Mount Signal 2. As this measure is presented on a portfolio basis, there is no near
comparable in the financial statements. Dividends paid can be found disclosed in the financial
statements and notes to the financial statements.
GLOSSARY CONTINUED
Including Alternative Performance Measures
100
US Solar Fund plc
Annual Report and Financial Statements 2024
Prospectus US Solar Fund Prospectus dated April 2021
PURPA Public Utility Regulatory Policies Act
QF Qualifying facility, as defined under PURPA. QFs are a special class of generating facility defined by law
and categorised as either a cogeneration facility or small power production facility.
RCF Revolving credit facility
REC Renewable energy certificate (as defined in Part XI (Glossary of Terms) of the Prospectus)
REC Agreement An agreement to purchase RECs (as defined in Part XI (Glossary of Terms) of the Prospectus)
RNS Regulatory news service
RTS EU Commission’s Regulatory Technical Standards relating to the SFDR
Scope 1 Emissions Direct emissions from owned or controlled sources
Scope 2 Emissions Indirect emissions from the generation of purchased energy
Scope 3 Emissions All indirect emissions (not included in Scope 2) that occur in the value chain of the reporting company,
including both upstream and downstream emissions
SDGs Sustainable Development Goals
SDR The proposed UK Sustainability Disclosure Requirements
SEC US Securities and Exchange Commission
SFDR The EU Sustainable Finance Disclosure Regulation
Solar power assets Utility-scale solar power plants and associated infrastructure, which may include transmission and co-
located or remotely located energy storage systems such as batteries (as defined in Part XI (Glossary of
Terms) of the Prospectus)
SPPI Solely payments of principal and interest
SPV Special Purpose Vehicle
TCFD Taskforce on Climate-related Financial Disclosures
Total dividend cover Non-GAAP measure. Total dividend cover is calculated as net portfolio cash generation divided by
dividends paid in the year, with an adjustment for items such as cash flow reserves carried forward
from operating cash flows generated in prior periods. As this measure is presented on a portfolio basis,
there is no near comparable in the financial statements. Dividends paid can be found disclosed in the
financial statements and notes to the financial statements.
TNFD Taskforce on Nature-related Financial Disclosures
TSR Total Shareholder Return. Non-GAAP measure. Share price appreciation plus dividends assumed to be
reinvested since IPO. The total return based on the NAV appreciation plus dividends paid since the IPO.
There is no direct reconciliation to the financial statements, being a calculation instead derived from
the Company’s share price. However a nearest comparison were this measure based on a figure in the
financial statements is provided in the Strategic Report, Investor Relations, Total Shareholder Return
and NAV total return paragraph.
Transition Risk Transition risks include policy changes, reputational impacts, and shifts in market preferences,
norms and technology. Transition opportunities include those driven by resource efficiency and the
development of new technologies, products and services, which could capture new markets and
sources of funding.
UNGC UN Global Compact
USPAP Uniform Standards of Professional Appraisal Practice
Utility Scale Solar Power
Plants
Large-scale grid connected solar power plants, being solar photovoltaic generation power plants with
capacity of at least 1MW but typically in a range of 20MW to 200MW (as defined in Part XI (Glossary of
Terms) of the Prospectus)
WACI Weighted Average Carbon Intensity
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OVERVIEW STRATEGIC REPORT
US Solar Fund plc
Annual Report and Financial Statements 2024
FINANCIAL STATEMENTSCORPORATE GOVERNANCE FINANCIAL STATEMENTSCORPORATE GOVERNANCE
DIRECTORS
Gill Nott
Jamie Richards
Thomas Plagemann
Mark Lerdal (appointed 1 October 2024)
INVESTMENT MANAGER
Amber Infrastructure Investment Advisor LLC
1330 Avenue of the Americas, New York, NY 10019
REGISTERED OFFICE
The Scalpel, 18th Floor
52 Lime Street, London, EC3M 7AF
ADMINISTRATOR AND
COMPANY SECRETARY
JTC (UK) Limited
The Scalpel, 18th Floor
52 Lime Street, London, EC3M 7AF
INDEPENDENT AUDITOR
Deloitte LLP
2 New Street Square, London, EC4A 3BZ
INDEPENDENT VALUER
KPMG LLP
Suite 1000,
620 South Tryon Street, Charlotte, North Carolina, 28202-1842
LEGAL ADVISER
Hogan Lovells International LLP
Atlantic House, Holborn Viaduct, London, EC1A 2FG
CORPORATE BROKER
Cavendish Capital Markets Limited
One Bartholomew Close, London, EC1A 7BL
PUBLIC RELATIONS
Kaso Legg Communications
40 Queen Street London, EC4R 1DD
KEY CONTACTS
NOTICE OF AGM
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action
you should take, you are recommended to seek your own independent financial advice from a stockbroker, bank manager,
solicitor, accountant, or other financial adviser authorised under the Financial Services and Markets Act 2000 if you are
resident in the United Kingdom or, if you are not resident in the United Kingdom, from another appropriately authorised
independent financial adviser.
If you have sold or otherwise transferred all of your shares in US Solar Fund plc, please send this document, together with the
accompanying documents, as soon as possible to the purchaser or transferee, or to the stockbroker, bank or other agent through
whomthe sale or transfer was effected, for delivery to the purchaser or transferee.
NOTICE OF THE ANNUAL GENERAL MEETING OF US SOLAR FUND PLC
NOTICE IS HEREBY GIVEN that the Annual General Meeting of US Solar Fund plc (Company) will be held, at the offices of JTC,
TheScalpel, 18th Floor, 52 Lime Street, London EC3M 7AF on Tuesday, 20 May 2025 at 3:00 p.m.
You will be asked to consider and vote on the resolutions below. Resolutions 1 to 10 will be proposed as ordinary
resolutions and resolutions 11 to 14 will be proposed as special resolutions. The Board unanimously recommends
that Shareholders vote in favour of all resolutions, except in the case of resolution 14, which the Board unanimously
recommends that Shareholders vote AGAINST.
Ordinary Resolutions:
1. THAT the Annual Report and Financial Statements for the year to 31 December 2024, together with the Directors’ reports and
Auditors’ report on those accounts, be received.
2. THAT the Directors’ Remuneration Report (excluding the Director’s Remuneration Policy), as set out on pages 67 to 68 of the
Company’s Annual Report and Financial Statements for the year to 31 December 2024 be approved.
3. THAT Deloitte LLP be re-appointed as the Company’s Auditor from the conclusion of this meeting until the conclusion of the next
Annual General Meeting general meeting of the Company at which the accounts and reports of the Directors and Auditors are laid.
4. THAT the Directors be authorised to determine the Auditor’s remuneration.
5. THAT Gillian Nott be re-elected as a Director of the Company.
6. THAT Jamie Richards be re-elected as a Director of the Company.
7. THAT Thomas Plagemann be re-elected as a Director of the Company.
8. THAT Mark Lerdal be elected as a Director of the Company.
9. THAT the Company’s dividend policy be approved.
10. THAT the Directors of the Company be and they are hereby generally and unconditionally authorised pursuant to Section 551 of
the Companies Act 2006 (the ‘Act’), and in substitution for all existing authorities, to exercise all the powers of the Company to allot
Ordinary Shares in the Company up to a maximum aggregate nominal amount of US$307,850 (representing approximately 10% of the
Company’s issued ordinary share capital as at 9 April 2025 (being the latest practicable date prior to the publication of this Notice) or,
if different, the number representing 10% of the aggregate nominal value of issued share capital (excluding treasury shares) as at the
date of the passing of this resolution provided that this authority shall expire at the conclusion of the Company’s next annual general
meeting or, if earlier, the date occurring 15 months from the date on which this resolution is passed, unless renewed at a general
meeting prior to such time, save that the Company may before such expiry make offers, agreements or arrangements which would or
might require relevant securities to be allotted after such expiry and so that the Directors of the Company may allot relevant securities
in pursuance of such offers, agreements or arrangements as if the authority conferred hereby had not expired.
US Solar Fund PLC
Annual report and financial statements 2024
102
Special Resolutions:
11. THAT, subject to the passing of resolution 10, set out above, the Directors of the Company be and they are hereby empowered
pursuant to Section 570 and Section 573 of the Act to allot equity securities (within the meaning of Section 560 of the Act) pursuant
to the authority conferred by resolution 10 and/or by way of sale of treasury shares as if Section 561(1) of the Act did not apply to any
such allotment, provided that this power shall be limited to the allotment of equity securities for cash at a price of not less than the
net asset value per share up to an aggregate nominal amount of US$307,850 (representing approximately 10% of the Company’s
issued ordinary share capital as at 9 April 2025 (being the latest practicable date prior to the publication of this Notice)) or, if different,
the number representing 10% of the aggregate nominal value of issued share capital (excluding treasury shares) as at the date of
the passing of this resolution and shall expire at the conclusion of the Company’s next annual general meeting or, if earlier, the date
occurring 15 months from the date on which this resolution is passed, unless renewed at a general meeting prior to such time, save
that the Company may before such expiry make offers, agreements or arrangements which would or might require equity securities
to be allotted after such expiry and so that the Directors of the Company may allot equity securities in pursuant of such offers,
agreements or arrangements as if the power conferred hereby had not expired.
12. THAT the Company be and is hereby generally and unconditionally authorised for the purposes of section 701 of the Companies Act
2006 to make market purchases (within the meaning of section 693(4) of the Companies Act 2006) of Ordinary Shares of $0.01 each
in the capital of the Company on such terms and in such manner as the Directors may from time to time determine, provided that:
a) the maximum aggregate number of Ordinary Shares which may be purchased is 46,144,225 (being approximately) 14.99% of the
issued ordinary share capital of the Company immediately prior to the passing of this resolution (excluding treasury shares) as at
9 April 2025 (being the latest practicable date prior to the publication of this Notice);
b) the minimum price (excluding expenses) which may be paid for each Ordinary Share or is $0.01;
c) the maximum price (excluding expenses) which may be paid for each Ordinary Share is the higher of:
a. an amount equal to 105% of the average of the middle market value of quotations for an Ordinary Share in the Company as
derived from The London Stock Exchange Daily Official List for the five business days immediately before the day on which the
purchase is made; and
b. the higher of the price of the last independent trade of an Ordinary Share and the highest current independent bid for an
Ordinary Share on the trading venues where the market purchases by the Company pursuant to the authority conferred by this
resolution will be carried out;
d) the authority conferred by this resolution shall expire (unless previously renewed, varied or revoked by the Company in general
meeting) at the conclusion of the Company’s next annual general meeting or, if earlier, on 20 August 2026, save that the Company
may, before the expiry of the authority granted by this resolution, enter into a contract to purchase its Ordinary Shares which may
be executed wholly or partly after the expiry of such authority.
13. THAT a general meeting, other than an annual general meeting, may be called on not less than 14 clear days’ notice provided that this
authority shall expire at the conclusion of the Company’s next annual general meeting.
14. THAT the Company ceases to continue as an investment trust.
By order of the Board
JTC (UK) LIMITED
COMPANY SECRETARY
Registered office:
The Scalpel, 18th Floor
52 Lime Street
London EC3M 7AF
Company number: 04301763
Date: 9 April 2025
US Solar Fund PLC
Annual report and financial statements 2024
103
(a) Any member of the Company entitled to attend and vote at the Annual General Meeting is also entitled to appoint one or more proxies
to attend, speak and vote instead of that member. A member may appoint more than one proxy in relation to the Annual General
Meeting provided that each proxy is appointed to exercise the rights attached to a different share or shares held by that member.
Aproxy may demand, or join in demanding, a poll. A proxy need not be a member of the Company but must attend the Annual
General Meeting in order to represent his or her appointor. A member entitled to attend and vote at the Annual General Meeting may
appoint the Chair of the meeting or another person as his or her proxy, although the Chair will not speak for the member. A member
who wishes his or her proxy to speak for him or her should appoint his or her own choice of proxy (not the Chair of the meeting) and
give instructions directly to that person.
(b) A Form of Proxy which may be used to make this appointment and give proxy instructions accompanies this notice. Details of how to
appoint a proxy are set out in the notes to the Form of Proxy. If you do not have a Form of Proxy and believe that you should have one,
or if you require additional forms, please contact the Company’s Registrar, Computershare Investor Services PLC (“Computershare”)
with the contact details found in note (e). As an alternative to completing a hard copy Form of Proxy, proxies maybe appointed
electronically in accordance with note (e) below.
(c) To be valid, a Form of Proxy and (if required) the power of attorney or other written authority, if any, under which it is signed or a
certified copy of any such authority, must be delivered to the Company’s Registrar, Computershare at The Pavilions, Bridgwater Road,
Bristol BS99 6ZY, by 3:00 p.m. on 16 May 2025 or, if the Annual General Meeting is adjourned, not less than 48 hours (excluding any
part of a day which is not a working day) prior to the adjourned meeting.
To change your proxy instructions you may return a new proxy appointment as set out above. Where you have appointed a proxy
using the hard copy Form of Proxy and would like to change the instructions using another hard copy Form of Proxy, please contact
Computershare. The deadline for receipt of proxy appointments (see above) also applies in relation to amended instructions.
Where two or more valid separate appointments of proxy are received in respect of the same share in respect of the same meeting,
the one which is last received shall be treated as replacing and revoking the other or others.
In order to revoke a proxy instruction a member will need to inform the Company by sending a signed hard copy notice clearly stating
the intention to revoke the proxy appointment to Computershare at the address specified above. In the case of a member which is a
company, the revocation notice must be executed under its common seal or signed on its behalf by an officer of the company or an
attorney for the company. Any power of attorney or any other authority under which the revocation notice is signed (or a duly certified
copy of such power or authority) must be included with the revocation notice.
The deadline for receipt of proxy appointments (see above) also applies in relation to a revocation notice. If a member attempts to
revoke his or her proxy appointment but the revocation is received after the time specified, then subject to note (f) below, the proxy
appointment will remain valid.
(d) In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by
the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the
Company’s register of members in respect of the joint holding (the first-named being the most senior).
(e) You may submit your proxy electronically at www.investorcentre.co.uk/eproxy. To do this, please register your proxy vote electronically
by accessing our Registrar’s website www.investorcentre.co.uk/eproxy, using control number 920690, Shareholder Reference
Number (SRN) and PIN, all of which are available on the front of your Form of Proxy or within the email received from Computershare
(if applicable). If you need help with voting, please contact Computershare on +44 (0)370 703 6253. Calls from outside the United
Kingdom will be charged at the applicable international rate. Computershare can be contacted by phone 8:30 am to 5:30 pm
(UKtime), Monday to Friday (excluding public bank holidays in England and Wales) or via email at webqueries@computershare.co.uk.
(f) If you are a person who has been nominated under section 146 of the Companies Act 2006 (the “Companies Act”) to enjoy
information rights (“Nominated Person”), you do not have a right to appoint any proxies under the procedures set out in these notes.
However:
– you may have a right under an agreement between you and the member of the Company who has nominated you to have
– information rights (“Relevant Member”) to be appointed or to have someone else appointed as a proxy for the Annual General
Meeting; or
– if you either do not have such a right or if you have such a right but do not wish to exercise it, you may have a right under an
agreement between you and the Relevant Member to give instructions to the Relevant Member as to the exercise of voting rights.
Your main point of contact in terms of your investment in the Company remains the Relevant Member (or perhaps your custodian or
broker) and you should continue to contact them (and not the Company) regarding any changes or queries relating to your personal
details and your interest in the Company (including any administrative matters). The only exception to this is where the Company
expressly requests a response from you.
NOTES TO THE NOTICE OF ANNUAL GENERAL MEETING
US Solar Fund PLC
Annual report and financial statements 2024
104
(g) CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so by
using the procedures described in the CREST manual (available via www.euroclear.com). CREST personal members or other CREST
sponsored members, and those CREST members who have appointed a voting service provider(s), should refer to their CREST
sponsor or voting service provider(s) who will be able to take the appropriate action on their behalf.
In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (“CREST
Proxy Instruction”) must be properly authenticated in accordance with Euroclear UK & International Limited’s (“EUI”) specifications
and must contain the information required for such instructions, as described in the CREST manual. The message, regardless of
whether it constitutes the appointment of a proxy or an amendment to the instruction given to a previously appointed proxy must,
in order to be valid, be transmitted so as to be received by the issuer’s agent Computershare Investor Services PLC (under CREST
ID number 3RA50), no later than 3:00 pm on 16 May 2025, or, if the Annual General Meeting is adjourned, not less than 48 hours
(excluding any part of a day which is not a working day) prior to the adjourned meeting. For this purpose, the time of receipt will be
taken to be the time (as determined by the timestamp applied to the message by the CREST applications host) from which the issuer’s
agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST.
After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through
other means. CREST members and, where applicable, their CREST sponsors or voting service providers should note that EUI does
not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore
apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the
CREST member is a CREST personal member or sponsored member or has appointed a voting service provider(s), to procure that his
or her CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted
by the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or
voting service provider(s) are referred, in particular, to those sections of the CREST manual concerning practical limitations of the
CREST system and timings. The Group may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)
(a) of the Uncertificated Securities Regulations 2001.
(h) A corporation which is a member can appoint one or more corporate representatives who may exercise, on its behalf, all its powers
asa member provided that no more than one corporate representative exercises powers over the same share.
(i) Only those holders of the Company’s shares registered on the Register of Members of the Company as at 6:00 pm (UK time) on
16May 2025 or, in the event that the Annual General Meeting is adjourned, on the Register of Members 48 hours (excluding any
part of a day which is not a working day) before the time of any adjourned meeting, shall be entitled to attend and vote at the Annual
General Meeting. Changes to entries on the Register of Members after this time shall be disregarded in determining the right of any
person to attend and vote at the Annual General Meeting.
(j) Voting on resolutions 1 to 14 will be conducted by way of a poll. As soon as practicable following the Annual General Meeting,
theresults of the voting will be announced via a regulatory information service and posted on the Company’s website.
(k) A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against the
resolution. If no voting indication is given, the proxy will vote or abstain from voting at his or her discretion. The proxy will vote
(orabstain from voting) as he or she thinks fit in relation to any other matter which is put before the Annual General Meeting.
(l) Under section 319A of the Companies Act, the Company must answer any question a member asks relating to the business being
dealt with at the Annual General Meeting unless:
– answering the question would interfere unduly with the preparation for the Annual General Meeting or involve the disclosure of
confidential information;
– the answer has already been given on a website in the form of an answer to a question; or
– it is undesirable in the interests of the Company or the good order of the Annual General Meeting that the question be answered.
(m) Except as provided above, members who have general queries about the Annual General Meeting should write to the Company
Secretary at the registered office set out above.
(n) As at 9 April 2025 (being the latest practicable date prior to the publication of this Notice), the Company’s issued share capital
comprised 332,192,361 Ordinary Shares and the total number of voting rights in the Company was 307,833,387. Information
regardingthe number of shares and voting rights and, if applicable, any members’ statements, members’ resolutions or members’
matters of business received by the Company after the date of this Notice will be available on the Company’s website,
http://www.ussolarfund.co.uk.
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(o) Members may not use any electronic address provided either in this Notice of Annual General Meeting, or any related documents
(including the Form of Proxy), to communicate with the Company for any purposes other than those expressly stated.
(p) Under section 338 of the Companies Act, members meeting the threshold requirements set out in that section have the right to require
the Company to give notice of a resolution which may properly be moved at the Annual General Meeting. Any such request, which
must comply with section 338(4) of the Companies Act, must be received by the Company no later than six weeks before the date
fixed for the Annual General Meeting.
(q) Under section 338A of the Companies Act, members meeting the threshold requirements set out in that section have the right to
require the Company to include a matter (other than a proposed resolution) in the business to be dealt with at the Annual General
Meeting. Any such request, which must comply with section 338A(4) of the Companies Act, must be received by the Company no
later than six weeks before the date fixed for the Annual General Meeting.
(r) Members satisfying the thresholds in section 527 of the Companies Act can require the Company to publish a statement on its
website setting out any matter relating to (a) the audit of the Company’s accounts (including the Auditor’s report and the conduct of
the audit) that are to be laid before the Annual General Meeting; or (b) any circumstances connected with an auditor of the Company
ceasing to hold office since the last annual general meeting, that the members propose to raise at this Annual General Meeting.
The Company cannot require the members requesting the publication to pay its expenses. Any statement placed on the website
must also be sent to the Company’s Auditor no later than the time it makes its statement available on the website. The business which
may be dealt with at the Annual General Meeting includes any such statement that the Company has been required to publish on
its website.
NOTES TO THE NOTICE OF ANNUAL GENERAL MEETING
CONTINUED
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EXPLANATORY NOTES TO RESOLUTIONS
ORDINARY RESOLUTIONS
RESOLUTION 1: RECEIVE THE ANNUAL REPORT AND FINANCIAL STATEMENTS
The Companies Act requires the Directors of a public company to lay before the Company in general meeting copies of the Annual
Report, Directors’ Reports and its Auditor’s Report in respect of each financial year. These are contained in the Company’s Annual Report
and financial statements for the financial year ended 31 December 2024 (the “2024 Annual Report”). Accordingly, a resolution to receive
the 2024 Annual Report is included as an ordinary resolution.
RESOLUTION 2: APPROVE THE DIRECTORS’ REMUNERATION REPORT
The Directors’ remuneration report can be found on pages 67 to 68 of the 2024 Annual Report and is subject to an advisory vote by
Shareholders, which is proposed as an ordinary resolution. It details the payments that have been made to Directors during the year,
inaccordance with the current remuneration policy. The remuneration report will be presented to Shareholders on an annual basis.
At the annual general meeting held in 2023, the Directors’ remuneration policy was approved by Shareholders and is not therefore
required to be approved at this year’s Annual General Meeting. The policy will be put to Shareholders again no later than the Company’s
annual general meeting in 2026.
RESOLUTIONS 3 AND 4: RE-APPOINTMENT OF AUDITOR AND AUDITOR’S REMUNERATION
Resolution 3 relates to the re-appointment of Deloitte LLP as the Company’s Auditor to hold office until the conclusion of the next general
meeting of the Company at which the accounts and reports of the Directors and Auditor are laid. This resolution is recommended by the
Company’s Audit Committee and endorsed by the Board. Accordingly, it is proposed, as an ordinary resolution, to re-appoint Deloitte LLP
as the Company’s Auditor. Resolution 4 authorises the Directors, upon recommendation from the Company’s Audit Committee, to fix the
Auditor’s remuneration.
The Directors, having regard to the Audit Committee’s recommendation, consider that the level of consultancy-related non-audit fees to
audit fees paid to Deloitte LLP is appropriate for the advisory work required to be undertaken for the year to 31 December 2024 and that
these do not create a conflict of interest on the part of the independent Auditor.
RESOLUTIONS 5 TO 8: ELECTION AND RE-ELECTION OF DIRECTORS
The Company’s articles of association (the “Articles”) specify that at each annual general meeting all of the Directors shall retire from
office. Accordingly, each of the existing Directors will retire from office with effect from the conclusion of this Annual General Meeting and
Gillian Nott, Jamie Richards and Thomas Plagemann will stand for re-election by the Shareholders. Mark Lerdal will stand for election by
the Shareholders.
Biographies of each member of the Board standing for election (or re-election) can be found on page 55 of the 2024 Annual Report.
The Directors believe that the Board has an appropriate balance of skills, experience, independence and knowledge of the Company
and the sector in which it operates to enable it to provide effective strategic leadership and proper guidance of the Company. The Board
confirms that, following the evaluation process set out in the Corporate Governance Report on pages 58 to 62 of the 2024 Annual Report,
the performance of each of the Directors is, and continues to be, effective and demonstrates their respective commitment to the role.
The Board believes, therefore, that it is in the interests of Shareholders that Mark Lerdal be elected and Gillian Nott, Jamie Richards and
Thomas Plagemann be re-elected.
RESOLUTION 9: APPROVAL OF THE DIVIDEND POLICY
Resolution 8 concerns the approval of the Company’s dividend policy which is to pay interim quarterly dividends to the holders of Ordinary
Shares, in US Dollars.
RESOLUTION 10: AUTHORITY TO ALLOT SHARES
This resolution deals with the Directors authority to allot Ordinary Shares generally and unconditionally in accordance with section 551 of
the Companies Act up to an aggregate nominal value of US$307,850, or 10% of the Company’s issued ordinary share capital.
Resolution 10 along with Special Resolution 11 as described below, intends to authorise the Board to allot shares in the capital of the
Company and to grant rights to subscribe to, or to convert any security into shares on a non pre-emptive basis.
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SPECIAL RESOLUTIONS
RESOLUTION 11: DISAPPLICATION OF STATUTORY PRE-EMPTION RIGHTS
Resolution 11 will be proposed as a special resolution, which require a majority of at least 75% to be passed. The Resolution seeks to
provide the Directors the authority to allot shares or sell shares held in treasury under Resolution 10, on a non-pre-emptive basis for cash
up to an aggregate nominal amount of US$307,850, or 10% of the issued ordinary share capital (excluding treasury shares) as at the date
the resolution would have passed.
RESOLUTION 12: MARKET PURCHASES OF OWN SHARES
This resolution seeks authority for the Company to make market purchases of its own Ordinary Shares and is proposed as a special
resolution. If passed, the resolution gives authority for the Company to purchase up to 46,144,225 of its Ordinary Shares, being
approximately 14.99% of the Company’s issued ordinary share capital (excluding treasury shares) as at 9 April 2025 (being the latest
practicable date prior to the publication of this Notice).
The resolution specifies the minimum and maximum prices which may be paid for any Ordinary Shares purchased under this authority.
The authority will expire on the earlier of 15 months from the passing of the resolution and the Company’s next annual general meeting.
The Directors believe that it is prudent to obtain the flexibility that this resolution provides; and will only exercise the authority to purchase
Ordinary Shares where they consider that such purchases will be in the best interests of Shareholders generally and will result in an
increase in earnings per Ordinary Share.
The Company may either cancel any shares it purchases under this authority or transfer them into treasury (and subsequently sell or
transfer them out of treasury or cancel them). The Directors currently intend to cancel all shares purchased under this authority.
As at 9 April 2025, there are no outstanding options or warrants to subscribe for Ordinary Shares in the capital of the Company.
RESOLUTION 13: NOTICE PERIOD FOR GENERAL MEETINGS
Resolution 13 is to be proposed as a special resolution to allow the Company to hold general meetings (other than annual general
meetings) on at least 14 clear days’ notice.
The minimum notice period for general meetings of listed companies is 21 days, but companies may reduce this period to 14 days
(other than for annual general meetings) provided that two conditions are met. The first condition is that the Company offers a facility for
Shareholders to vote by electronic means. This condition is met if the Company offers a facility, accessible to all Shareholders, to appoint
a proxy by means of a website. The second condition is that there is an annual resolution of Shareholders approving the reduction of the
minimum notice period from 21 days to 14 days.
If approved, the resolution will be effective until the end of the Company’s next annual general meeting, when it is intended that the
approval be renewed. The Board will consider on a case-by-case basis whether the use of the flexibility offered by the shorter notice
period is merited, taking into account the circumstances, including whether the business of the meeting is time sensitive.
RESOLUTION 14: DISCONTINUATION RESOLUTION
The Company’s Articles require the Directors to propose to Shareholders a special resolution that the Company ceases to continue in its
present form (“Discontinuation Resolution”) if over the course of a complete financial year, the Ordinary Shares of the Company have,
onaverage, traded at a discount in excess of 10 percent to the Net Asset Value per Ordinary Share.
During the period, the Company’s average price per Ordinary Share was 48.33 cents, trading at a 23.8% percent discount to the
Company’s average Net Asset Value as at 31 December 2024 (31 December 2023: 28.13 percent discount), triggering the requirement
topropose the Discontinuation Resolution to Shareholders.
Accordingly, the Discontinuation Resolution will be put to Shareholders at the upcoming Annual General Meeting. If the Discontinuation
Resolution is passed, the Board will put forward proposals to Shareholders at a general meeting of the Company, to be held within four
months of the Discontinuation Resolution being passed, to wind up or otherwise reconstruct the Company, having regard to the illiquid
nature of the Company’s underlying assets.
Notwithstanding the obligation on the Board to propose the Discontinuation Resolution pursuant to the Company’s Articles, the Board
firmly believes that the passing of the Discontinuation Resolution would have a significant adverse impact on Shareholder value for
the reasons set out below. The Board remains of the view that the current discount to NAV does not reflect the underlying value of the
Company and remains committed to preserving shareholder value. The Board and Investment Manager will continue to monitor the
market for similar assets as those held by the Company with a view to the realisation of value from the Company’s assets when the time
isright. That time is not now based on prevailing market conditions described in the Chair’s Statement which are not conducive to a sale
for value.
EXPLANATORY NOTES TO RESOLUTIONS CONTINUED
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As a reminder, the Company underwent an extensive strategic review process in 2023 to consider the options available to protect
Shareholder value (the “Strategic Review”). As a result of the Strategic Review, the Company made amendments to its investment policy
and appointed a new Investment Manager, Amber Infrastructure Investment Advisor, LLC (a member of the Amber Infrastructure Group)
(“Amber”), with effect from 1 December 2023. The Strategic Review conducted throughout 2023, demonstrated that prevailing market
conditions were not conducive to the Company realising the value of its assets. In June 2024, the Company delivered on its commitment
to return capital to shareholders via a tender offer. The Company acquired approximately 7% of the issued share capital at a significant
premium to the prevailing market price, returning $18.6 million plus costs to shareholders. The Board’s focus remains on taking steps to
ensure the Company’s portfolio is robust, optimised and capable of being presented to the market for a future liquidity event in order to
maximise shareholder value.
In light of the severity of the possible consequences for Shareholder value, the Directors are unanimously recommending that
Shareholders vote AGAINST the Discontinuation Resolution.
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US Solar Fund PLC
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US Solar Fund PLC Annual report and financial statements 2024