The sector’s smallest trusts have also suffered, with the SDCL Energy Efficiency Income Trust falling 2 per cent and the NextEnergy Solar Fund falling 1 per cent in the last five trading days.
Iain Scouller, of the Stifel broker, said the tax could end up punishing investors who had backed the government’s “zero net” agenda.
“Applying an extraordinary tax on renewable generators sends the wrong message at a time when investors are being encouraged to make substantial new investments in renewables,” he said.
Burgeman said the tax would also affect investors who had relied on renewable energy trusts as protection against rampant inflation, which reached a 40-year high of 9% in April. A key attraction for renewable infrastructure companies is that they typically generate significant revenue from government-linked inflation-linked subsidies, which means they benefit in times of inflation.
While renewable energy trusts have suffered, the shares of London-based oil giants BP and Shell remained largely unconcerned with extraordinary tax reports, both of which rose 1% in recent years. five days, due to high demand for corporate products.
However, shares of power companies such as Drax, SSE and British Gas owner Centrica have fallen 6, 3 and 3 per cent respectively over the past five days.
Susannah Streeter of Hargreaves Lansdown said energy stocks may continue to falter as the market awaits unexpected tax confirmation.
“The devil will be in the details of any plan to get the excess profits out of the power companies,” he said. “But it seems that even renewable energy operators can’t escape a fee.”
Fund managers have already warned that an extraordinary tax on the energy sector, one of the largest industries on the UK stock market, could seriously damage its ability to pay dividends to shareholders.