The latest on Energetic and renewable energy trends.

We’re excited to announce Energetic Capital’s groundbreaking application of EneRate Credit Cover to a fuel cell project, marking a significant milestone in energy resiliency and decarbonization efforts. This innovative policy played a pivotal role in securing financing for a key domestic manufacturer, even with a counterparty rated below investment grade.

As demand for sustainable and resilient energy solutions continues to grow, creative financing strategies like this demonstrate the power of thinking beyond traditional credit constraints.

To learn more about how Energetic Capital is driving impactful decarbonization through flexible insurance solutions, read the full press release here.

Let’s continue pushing the boundaries of what’s possible in energy innovation!

We’re thrilled to share that Energetic Capital has been selected as one of the winners of InnSure’s Insurance Innovation Prize, a prestigious $5M program accelerating groundbreaking insurance solutions for the energy transition supported by NYSERDA!

This recognition highlights our commitment to addressing critical gaps in renewable energy financing and driving clean energy adoption. To date, we’ve enabled $800M in renewable projects, powering 1,500 sites across 46 states and reducing carbon emissions by 114,700 metric tons.

Thank you to NYSERDA and InnSure for supporting our mission to advance scalable climate solutions. Together, we’re paving the way for a more sustainable future!

See the press release here.

Financing a C&I solar project can be a complex process, with multiple stakeholders, detailed requirements, and tight timelines. Even small missteps—like missing a key document or under-preparing for lender diligence—can slow things down or jeopardize a deal entirely.

At Energetic Capital, we sit at the crossroads of developers and lenders, working on transactions of all shapes and sizes. From small, agile teams to some of the largest developers and project finance banks in the industry, we’ve seen what works and what doesn’t when it comes to securing financing for C&I infrastructure. Our experience has taught us that the difference between a seamless process and a drawn-out one often comes down to preparation and organization.

In this article, we’re breaking down best practices that can save you time and frustration. You’ll also get access to a free data room template designed to help you put your best foot forward and close deals faster.

The Developer's Diligence Toolkit: Key Materials for Your Financing Data Room

To secure financing for your C&I solar project, assembling a well-organized data room with the right materials is essential. Lenders rely on this information to assess the project's viability, size the debt, and evaluate risk. Below, we outline a few of the key materials every developer should prepare to streamline the financing process and ensure a smooth review:

1. Project Financial Models

• What it is: A detailed Excel-based financial model showing the project’s key assumptions and cash flow projections.
• What it includes:
  • Production assumptions
  • PPA or ESA rates and escalators
  • REC/Incentive rate assumptions (contracted/uncontracted)
  • Asset degradation assumptions
  • Operating and maintenance (O&M) expenses
  • All other project expenses (insurance, site lease, etc.)
  • Sensitivity analyses for key variables
• Why it matters: Lenders use this to size the debt appropriately and understand the financial health and risk profile of the project.

2. Power Purchase Agreement (PPA) or Energy Services Agreement (ESA)

• What it is: The contract between the project asset and the offtaker detailing energy sales terms.
• What it includes:
  • Pricing terms, escalators, and termination clauses
  • Contract duration and renewal provisions
  • Obligations of both parties
• Why it matters: Lenders review these agreements to ensure they are bankable and aligned with the project’s financial model.

3. Offtaker Financial Information

• What it is: Documentation that provides insights into the creditworthiness of the offtaker.
• What it includes:
  • Three years of audited financial statements
  • Key financial ratios (e.g., debt-to-equity, liquidity)
  • Any existing credit ratings or guarantees
• Why it matters: The offtaker's ability to meet payment obligations significantly impacts the project's financial stability and risk profile.

4. Permits and Approvals

• What it is: Evidence of all required regulatory and environmental clearances.
• What it includes:
  • Local, state, and federal permits
  • Interconnection agreements and grid approvals
  • Zoning and land use compliance documents
• Why it matters: These documents ensure the project is legally authorized to operate and won’t face regulatory hurdles.

5. Construction and Material Contracts

• What it is: Agreements with the EPC (Engineering, Procurement, and Construction) provider and other key contractors.
• What it includes:
  • EPC agreements with milestone timelines
  • Major equipment supply contracts (e.g., panels, inverters, storage systems)
  • Warranties and performance guarantees
• Why it matters: Lenders need confidence that the project will be completed on time and within budget.

6. Tax Equity Strategy

• What it is: A plan or agreement outlining how tax equity investment will be structured.
• What it includes:
  • Tax equity investor documents (letters of intent, commitments, broker agreement, MIPA, etc..)
  • ITC (Investment Tax Credit) or PTC (Production Tax Credit) calculations
  • Expected contribution timelines
• Why it matters: Lenders often require clarity on tax equity funding as it can materially affect the project's overall financing structure.

7. Insurance Coverages

• What it is: Policies that protect the project against operational and financial risks.
• What it includes:
  • General liability insurance
  • Property and casualty coverage
  • ITC insurance (if applicable)
  • Credit insurance to de-risk offtaker payments (if applicable)
• Why it matters: Comprehensive insurance ensures financial protection against unforeseen risks that could disrupt cash flows.

8. Project Timeline

• What it is: A detailed schedule from construction to commercial operation.
• What it includes:
  • Construction start and completion dates
  • Permitting milestones
  • Expected commercial operation date (COD)
• Why it matters: A clear timeline helps lenders assess the feasibility of construction-to-permanent financing and align on key disbursement milestones.

By preparing these materials in advance, developers can demonstrate professionalism, reduce back-and-forth with lenders, and accelerate the financing process.

Free C&I Developer Data Room Template

When it comes to presenting your project to potential financiers, organization is everything. While this template isn’t a one-size-fits-all solution, it provides a robust starting point. By ensuring that every folder contains the relevant information for your specific project or portfolio, you’ll be in a much better position to streamline the financing process, reduce delays, and improve the chances of success.

Our template is designed with simplicity and clarity in mind, breaking down your project’s data into clearly labeled folders and subfolders. Each section reflects the key diligence items lenders expect to see, helping you present your project as a polished, professional opportunity.

DOWNLOAD NOW

Why Energetic Capital Can Make a Difference

Financing C&I renewable energy projects often comes with unique challenges, from addressing offtaker creditworthiness to organizing complex project details. At Energetic Capital, we’ve seen firsthand how the right tools and preparation can transform this process. With transactional experience spanning hundreds of projects, we’ve worked with developers of all shapes and sizes—from small, independent teams to some of the largest players in the industry—to navigate these hurdles and achieve financing success.

Our position at the intersection of developers and many of the leading project finance banks gives us a deep understanding of the critical factors that streamline approvals and secure better terms. This perspective enables us to provide actionable insights and practical solutions, helping developers create a more efficient financing journey.

How We Support Developers

• Addressing Gaps in Financing: With tools like credit insurance, we help developers overcome challenges related to offtaker credit or other perceived risks, ensuring your project meets lender requirements.
• Improving Financing Outcomes: By understanding what leading lenders prioritize, we guide developers in organizing materials and presenting projects in a way that resonates with financiers.
• Building Confidence: Our experience across a diverse range of projects means we can anticipate challenges and proactively help you address them, making the financing process smoother and more predictable.

At the end of the day, our goal is to help developers like you focus less on the complexities of financing and more on building renewable energy projects that make an impact. If you’d like to learn more about how our insights and tools can help you take the next step, we’re here to share our expertise.

Energetic Capital is proud to announce the successful close of its first policy covering offtaker default in connection with a 40 MW wind project in the MISO region. By collaborating closely with the project sponsor and a leading global financing bank, this policy addressed the unique credit risks associated with a virtual power purchase agreement (vPPA), unlocking critical funding to advance renewable energy deployment.

This transaction highlights the growing role of credit insurance as a flexible and impactful tool in clean energy financing. By mitigating risks tied to unrated or sub-investment-grade offtakers, credit insurance enables lenders and project sponsors to reallocate financial risk and achieve more favorable terms—similar to its use as a solution for challenging forbearance structures.

The deal also reflects broader market trends in power purchase agreements (PPAs), where diversification of offtakers and the rise of unrated entities are reshaping the market landscape. These trends were recently explored in our article, Corporate PPAs Hit Record High in 2023: Emerging Credit Trends Reshape the Markets.

Energetic Capital remains committed to providing innovative financial solutions that drive the clean energy transition forward. This milestone underscores the adaptability of our products to support projects of all sizes and structures in today’s evolving energy markets.

To learn more about this achievement and how our solutions can support your projects, reach out to our team or explore the full article here.

In our last post, we explored how the corporate power purchase agreement (PPA) market is evolving, with the rise of off-balance-sheet structures and increased demand for credit-enhancement tools.

Today, we’ll dive deeper into how these tools are applied, offering insights into their benefits and costs through real-world examples.

Why Credit Enhancement Matters More Than Ever

Whether to address credit risk concerns or to free up balance sheet capacity, credit enhancement tools are becoming essential for corporate PPAs. Here’s how they are reshaping the landscape:

• Offtaker Insurance to Backstop Revenue: These policies guarantee revenue streams, protecting projects against unforeseen shortfalls.
• Mark-to-Market Insolvency Coverage: Insurance can cover damages owed if a counterparty defaults, ensuring project viability.

Applications in Sponsor and Lender Scenarios

Sponsor Cases

Sponsors are leveraging credit enhancement in several ways to stay competitive:

• Reducing or Eliminating Credit Support Requirements: By offering credit insurance, sponsors can reduce or eliminate the need for credit support. However, having some level of credit support significantly impacts the policy premium. In this scenario, costs are typically passed along to the offtaker in the form of a higher rate—offering a trade-off of no posting requirements for the offtaker.

• Supplementing Internal Credit Requirements: Sponsors often require 100% of their offtake to be investment-grade (IG). Credit insurance can help meet these internal credit benchmarks, though it’s not always the easiest sell. In many cases, sponsors absorb the cost of the policy.

• Customized Solutions: Specific cases often present unique permutations of these strategies, offering tailored flexibility based on project and participant needs.

Lender Cases

For lenders working with sub-investment-grade or unrated offtakers, credit enhancement plays a vital role:

• Revenue Sizing for Debt: Lenders set revenue expectations for the project based on a "minimum merchant rate," calculated as the difference between:
  • (A): The discounted sum of contracted revenue at the VPPA/Strike price.
  • (B): The discounted sum of contracted revenue at the "minimum merchant rate."
• Credit Support Gaps: When Buyer Credit Support in the PPA isn’t sufficient to cover this gap, lenders may reduce loan sizing or refuse to move forward.

• Credit Insurance as a Solution: A credit insurance policy can fill this gap by covering the difference between expected revenue (Covered Periodic Payment or CPP) and actual revenue during defined billing periods following offtaker default.
  • The CPP is usually set at 1.0x coverage of P99 revenue, ensuring all obligations of the project are covered.
  • The policy limit is calculated as the total credit support required, less existing Buyer Credit Support.

This approach allows lenders to provide more proceeds to borrowers, offering a capital-efficient alternative to requiring sponsors to post collateral. While obtaining additional Buyer Credit Support is another option, it’s typically less feasible.

What Are the Benefits?

• Off-Balance-Sheet Flexibility: Companies can reduce reliance on letters of credit (LCs) or cash collateral, freeing up liquidity for growth.
• Broader Offtaker Access: A wider pool of eligible participants often translates into more competitive pricing for PPAs.
• Enhanced Financing Confidence: Credit enhancements reassure project stakeholders, from lenders to tax equity investors.

The Cost-Benefit Analysis

While these solutions come with associated costs, the savings in opportunity cost often outweigh the expense. Companies can maintain commercial terms while unlocking capital previously tied up in guarantees or collateral.

For example, in sponsor cases, passing costs to the offtaker can provide immediate liquidity benefits without requiring a posting requirement. For lenders, credit insurance enables greater debt sizing, ensuring project viability and long-term success.

Strategic Necessity for the Future

As the corporate PPA market continues to mature, credit enhancement is no longer an optional tool—it’s a strategic necessity. By enabling broader participation, mitigating risk, and enhancing financing options, these tools are helping shape the renewable energy landscape.

How is your organization leveraging these innovations to stay competitive in the renewable energy landscape?

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Corporate power purchase agreements (PPAs) reached new heights in 2023, with over 19 GW of renewable energy capacity signed across 200+ deals, according to Bloomberg NEF. Big Tech led the charge, accounting for over two-thirds of deals, driven by aggressive sustainability goals and rising energy needs for AI and advanced computing. Solar power took center stage, making up 70% of contracted capacity.  

Beyond the headline growth, two critical shifts are redefining the PPA market: the move to off-balance-sheet counterparties and the diversification of offtakers. Traditionally, corporate PPAs relied on full guarantees from creditworthy parent companies. Today, more deals are being structured through unrated subsidiaries with limited or no parent backing. While this approach allows companies to offload liabilities, it creates challenges for project financing, as lenders and power producers must navigate the perception of higher credit risks.  

This shift has catalyzed demand for credit-enhancement tools to supplement existing credit support mechanisms. These policies can serve as a backstop for revenue to ensure projects are able to make debt service payments or can cover mark-to-market damages in the event of default and contract termination. These tools can supplement or reduce traditional letters of credit (LCs), guarantees or cash collateral, in some cases replacing them entirely. The benefits are significant:  

1. Expanded Offtaker Pool: Sub-investment-grade and unrated companies can now participate, increasing market diversity and enabling competitive pricing.  

2. Improved Liquidity: Off-balance-sheet flexibility allows companies to redeploy capital toward growth priorities rather than tying it up in collateral.  

3. Boosted Financing Confidence: Credit enhancements reassure power producers, tax equity investors, and lenders, ensuring bankability.  

With the relatively low cost of these solutions compared to the opportunity cost of tying up liquidity, they are increasingly seen as essential tools for scaling corporate renewable procurement. As PPAs diversify, credit enhancement tools are poised to play an even larger role in sustaining growth.  

How is your organization leveraging these evolving trends to advance its sustainability and energy goals?