SSE PLC (SSE) SHARES: 2025 PERFORMANCE IN UK, KEY DRIVERS, MILESTONES AND RISKS —'26 OUTLOOK

How did SSE plc (SSE) perform in 2025?

SSE plc (LSE: SSE), one of the UK’s leading energy companies, experienced a year defined by strategic investment, solid renewable energy performance, and external market pressures. In 2025, the company focused heavily on delivering long-term infrastructure growth while balancing the profitability of its existing operations. Against a backdrop of regulatory change and fluctuating energy prices, SSE’s share price moved within a relatively narrow band throughout the year, generally reflecting the stability of its business model despite broader economic uncertainties.

Financial performance

SSE reported an increase in revenues driven by its renewables and networks divisions. For the full year, SSE’s adjusted earnings per share (EPS) came in at 96.5p, a modest increase from 2024 results, reflecting improved generation from its onshore and offshore wind portfolio. Group operating profits increased by 6%, supported by higher grid demand and inflation-adjusted returns from regulated assets.

Dividend growth continued to be a central pillar of SSE’s capital allocation strategy. In 2025, the company increased its dividend by 5%, offering strong appeal to income-focused investors. The dividend yield remained attractive at around 5.8%, reinforcing SSE’s reputation as a dependable income stock.

Share price activity

SSE’s shares started the year at approximately 1,680p and closed 2025 just above 1,730p, marking a more modest appreciation than some sector peers. The stock was relatively resilient to broader FTSE 100 volatility, particularly as investors took refuge in defensive, dividend-yielding sectors amid interest rate uncertainties.

Operational highlights

• Offshore wind projects: Delivering key milestones in Dogger Bank and Seagreen projects, contributing significantly to clean energy capacity.
• Transmission network upgrades: Continued investment in Scotland’s electricity transmission, backed by regulatory approvals.
• Sale of non-core assets: Further streamlining of business activities to focus on core growth areas, notably renewables and networks.

Market context

The UK’s evolving energy policy landscape — including continued support for net zero targets and stable regulatory returns — underpinned market confidence in companies like SSE focusing on green infrastructure. That said, ongoing concerns about windfall taxes and regulatory interventions slightly dampened investor enthusiasm, especially for future profit margins.

Analyst perspectives

Most analysts maintain a “Buy” or “Hold” outlook for SSE shares. The company’s visibility on earnings and capital expenditure plans appeals to long-term investors, although some remain cautious about execution risk on the large-scale infrastructure front.

What are the key factors influencing SSE shares?

SSE’s share price trajectory is shaped by a number of macroeconomic, regulatory, and company-specific factors. In 2025, strong tailwinds from the energy transition and company execution augmented sentiment. Investors looking ahead to 2026 should consider several key dynamics that could drive SSE’s valuation, both positively and negatively.

1. Renewable energy expansion

SSE’s long-term value proposition heavily revolves around electricity generation from low-carbon sources. The group is one of the largest renewable energy players in the UK, and its firm commitment to building out capacity — particularly in wind and hydroelectric — makes it a central participant in Britain’s net-zero strategy.

Growth in operational renewable assets is expected to boost SSE’s EBITDA and offer more predictable cash flows in the long run. Key projects such as Viking Wind Farm (onshore) and Dogger Bank (offshore) are scheduled for capacity ramp-ups in the coming year, significantly contributing to revenue and green energy output.

2. Regulated networks business

Approximately half of SSE’s operating profits derive from regulated transmission and distribution networks. These businesses are ringfenced and offer inflation-linked returns set by Ofgem. Investors value these as low-risk income streams with long-term visibility. The outcome of the RIIO-2 framework review and upcoming developments related to grid modernisation in Scotland and northern England will be instrumental.

3. Inflation and interest rates

As with other capital-intensive utilities, SSE’s performance is sensitive to the macroeconomic backdrop. A high interest rate environment increases the cost of capital, impacting infrastructure investment returns. Nevertheless, the effect in 2025 was mitigated by index-linked revenues in the network division and disciplined capital management. The outlook for 2026 hinges in part on Bank of England rate policy and inflation persistence.

4. Political and regulatory landscape

Energy companies in the UK operate under increasing political scrutiny. In 2025, windfall tax extensions and regulatory consultations influenced investor sentiment. While SSE’s focus on clean energy exempts it from the brunt of fossil fuel-related levies, any future policy ambiguity could affect capital planning.

The transition to green energy further deepens the relationship between the company and policymakers, implying that SSE’s success depends partially on regulatory favourability and clarity on long-term energy procurement frameworks.

5. ESG and investor preferences

Sustainability is an increasingly relevant driver of capital inflow. SSE’s ESG credentials serve as a competitive advantage. The company is consistently rated highly for environmental sustainability, bolstered by transparent reporting and net-zero alignment standards. Institutional investors seeking ESG-aligned dividends are drawn to SSE’s direction, making these ratings essential in appetites for the shares.

6. Capital expenditure efficiency

SSE has pledged to invest over £10 billion by 2030 in low-carbon infrastructure. These plans are ambitious and come with execution risks. The success of such investments hinges on cost discipline, construction timelines, and deliverability of returns. Delays or cost overruns may slow the anticipated growth or lead to profitability pressure.

What are the risks and opportunities for SSE in 2026?

Moving into 2026, SSE faces a series of challenges, but also holds significant upside potential. The company’s future direction will be defined by its ability to deliver on current projects, navigate a shifting policy framework, and adapt to evolving market conditions. Below are the key risks and areas to watch.

Risks to watch in 2026

• Policy uncertainty: A general election is expected in the UK in 2026. Potential changes in government may lead to altered policy direction, particularly with respect to support for green energy subsidies or corporate taxation.
• Windfall taxation and levies: Any extension or modification of energy profit taxation frameworks could constrain SSE’s profit margins, especially if investors perceive ongoing political intervention as reactive rather than strategic.
• Supply chain constraints: Inflationary pressures and global supply chain disruptions could continue to challenge timely infrastructure build-outs for wind farms and grid improvements, delaying key project milestones.
• Weather dependency: Renewable energy generation volumes are highly sensitive to wind conditions. Anomalously low wind years could impact revenue generation and system balancing costs.
• Financing risks: With more than £3.5 billion in capital expenditure earmarked annually, changes in credit markets, rising bond yields, or ratings downgrades may affect project economics.

Opportunities ahead

SSE also stands to benefit from significant structural trends:

• Electrification of transport and heating: The shift away from fossil fuels towards electricity will increase long-term demand on SSE’s networks and generation assets, allowing continued organic growth.
• Potential asset monetisation: Further sales of minority stakes in operating assets could strengthen the balance sheet and fund development plans without diluting shareholder value.
• Expansion into Europe: With several EU markets opening competitive auctions for renewables, SSE may seek to leverage its operational expertise abroad for diversification.
• Technological optimisation: Advances in battery storage and flow balancing technologies may allow SSE to extract more value from intermittent renewables.

Analyst expectations for 2026

Consensus forecasts suggest low-to-mid single-digit EPS growth in 2026, assuming no major policy shifts. Dividends are expected to grow sustainably, maintaining SSE’s strong income track record. Should energy prices remain stable and capital projects progress without delay, SSE may see its shares resume a more robust upward trend next year.

Investor takeaway

SSE plc enters 2026 well positioned but not without its share of headwinds. Investors should monitor geopolitical shifts, regulatory announcements, and quarterly development milestones closely. For income-seeking portfolios with moderate growth exposure, SSE presents a compelling case, provided risk factors remain contained.