The Company provides the following update in advance of its AGM which will be held at 3.00 p.m. BST.
U.S. renewable energy market update
The U.S. renewable energy industry continues to offer bright prospects for ongoing investment and growth, even while facing the near term challenges of supply chain constraints, inflation, and a trade dispute on imported solar products. In the first quarter of 2022, the American Clean Power Association reported that 6.6 GW of U.S. wind, utility-scale solar, and battery storage capacity was installed, representing $9.3 billion in capital investment and an increase of 11% year-on-year.
In March 2022, the U.S. Department of Commerce had initiated an investigation into anti-dumping and countervailing duties on solar products from Chinese-controlled companies being imported from Vietnam, Cambodia, Thailand and Malaysia. Combined, these four countries account for approximately 80% of U.S. imported solar modules. The investigation, and its prospect of very significant tariffs being imposed retroactively on imported solar products beginning on 1 April 2022, had caused project installations to slow down. The U.S. solar industry trade group, SEIA, had reduced its solar installation forecast for 2022 and 2023 by approximately 46%. The impact of this investigation had also put at risk President Biden's ambitious climate agenda including a goal to decarbonize the U.S. power grid by 2035.
On 6 June 2022, the Biden administration responded by issuing an executive action that directs the Commerce Secretary to implement regulations that would preclude imposing any new tariffs on imported solar cells and modules from those four countries for 24 months. Additionally, President Biden invoked the Defense Production Act by citing an emergency in electricity supply to serve as a catalyst for expanding domestic manufacturing of clean energy products such as solar modules in the coming years. If the Commerce Department ultimately determines that tariffs on imported solar products from those four countries are warranted, no duties will be due over the 24 month period covered in the executive action. While a legal challenge cannot be ruled out, Biden's executive action is widely being viewed as providing a safe harbor for U.S. solar installers and developers to procure solar modules from a reliable source and to resume their rapid growth of installation in the coming months. The Investment Manager believes that RNEW is well positioned to take advantage of the attractive investment opportunities that will be available over the medium to long term.
The Investment Manager has been focused on progressing the construction of the Echo Solar Portfolio - Minnesota and Skillman Solar projects. The investment team is also actively working towards closing the next batch of four Echo Solar Portfolio projects located in the states of Virginia and Delaware. In addition, the investment team has executed a term sheet with a tax equity investor. Due diligence by the investor to provide tax equity financing to the Echo Solar Portfolio is ongoing.
Since the $13.1 million equity fund raising announced on 20 May 2022, the Company has repaid $9.1 million drawn under its revolving credit facility ("RCF"). Upon closing the acquisitions of the next four Echo Solar Portfolio projects, the Company expects to fully utilize the funds raised from the equity fund raising as well as draw on its RCF.
Looking ahead, the Company will report its unaudited net asset value as at 30 June 2022 at the end of July.