The investment arm of Photon Energy has launched a new ‘yield co’ investment vehicle for European solar assets.

Photon said the vehicle, European Solar Holdings (ESH), had been designed to protect solar investors from the growing trend of European governments applying retroactive subsidy cuts and taxes to solar projects.

ESH will follow the yield co model widely touted as a crucial new method for maximising investment returns from solar projects.

Photon said ESH would be open to all investors in PV power plants in Europe.

Subscribers will be able to swap their investments in power plants for shares in ESH. Once ESH has reached a target portfolio size of 250MW, it will be floated on a “major” European stock exchange, most likely in 2015, Photon said.

The target for ESH is to own-operate 1GW of PV assets by 2017.

Georg Hotar, CEO of Photon Energy, said the vehicle was aimed at protecting “bona-fide” PV investors against further retroactive tax and regulatory changes such as those seen in Spain, Greece, the Czech Republic and Bulgaria.

“With no real recourse to national courts, a cynically unhelpful EU Commission and the toothless Energy Charter Treaty investors have become free-for-all sitting ducks,” Hotar said.

“The high fragmentation of ownership and paper-tiger industry groups have rendered investors’ defence very weak. As investors in this fundamentally attractive asset class we can either sit and pray or we can improve our defences and fight back.”

Hotar said no investor in solar assets in the European Union could risk ignoring the threat of retroactive tax and regulatory measures. “This risk extends to all jurisdictions in the EU, including Germany, France and the UK,” he said.

“The most recent final dismantling of the support mechanism in Spain and the consequential slaughter of equity investors and financing banks serves as the most relevant real-life example of things to come.”

The yield co model has been widely used in established industries such as real estate, but is a new phenomenon for PV.

They allow investors to pool assets in a holding company, which then uses the assets to generate attractive long-term dividends.

The low risk of yield cos is expected to attract retail investors looking for steady returns.

Leading US-based PV manufacturer and developer, SunEdison, is establishing a yield co to maximise returns from its own projects and generate funds to build further installations.