Good Energy may sell solar sites as subsidy cuts bite

By Karolin Schaps

LONDON (Reuters) - Good Energy, which supplies renewable power to British customers and generates some of its own, may sell more of its solar power sites as government subsidy cuts have made owning them less attractive.

The firm, which increased its electricity and gas customer base by 39 percent between June 2015 and June 2016 to 115,250, said the subsidy cuts meant in future it would focus less on solar power generation and shift to onshore wind instead.

"We have some (solar) development sites that we don't necessarily need to own long term. We can sell those sites because what we're interested in is the long-term power," Good Energy Chief Executive Juliet Davenport told Reuters.

The company owns and operates seven solar sites and two wind farms with a combined capacity of 52 megawatts (MW).

Good Energy has previously made money from selling sites, with the most recent transaction, the sale of the Wrotham Heath solar site, generating a net sales profit of around 500,000 pounds.

The British government has been reining in spending on renewable energy projects, announcing solar power subsidy cuts late last year.

"With the removal of subsidy support, our medium term generation focus has shifted to wind power," the company said in its half-year results report on Tuesday.

Although wind farm subsidies have also been announced, Davenport said cost cuts were more feasible in wind power and projects had been designed to be economic without subsidy contributions.

Good Energy reported a 72 percent rise in core profit to 6.2 million pounds in the six months to June 30 after a more efficient system to estimate customer demand meant it could optimise its energy buying, Davenport said.

Net debt rose slightly to 50.7 million pounds, and bringing down debt will be one of the company's priorities, she added.

"We're reviewing the overall funding strategy for the company," Davenport said, adding another share offer was one option being considered.

The company raised 3.1 million pounds in June through an oversubscribed share offer made directly to its customers.

(Editing by Mark Potter)