The latest on Energetic and renewable energy trends.

Introduction: Protecting What Powers Your Project

In the world of energy project finance, physical assets like panels, turbines, and transformers are the big-ticket items that lenders require sponsors to insure, given their value to the project. But what about the contracts that make those assets valuable in the first place?

Power purchase agreements (PPAs) and similar revenue contracts don’t appear on the balance sheet, yet they underpin the entire economic case for a project. These contracts generate tens of millions in future revenue—any loss or impairment can cripple a project’s value.

This blog explores why PPAs should be treated like the valuable assets they are—and how developers can protect them accordingly.

Tangible Assets Are Insured—Why Not Revenue?

In a typical project, fixed assets like equipment and infrastructure account for 80–90% of reported asset value. These are heavily insured against physical loss, enabling recovery in case of damage or disaster.

But the PPA, which arguably drives most of the project’s long-term value, is left exposed. If the offtaker defaults or terminates the contract, the revenue disappears—and standard P&C insurance doesn’t cover it.

The Revenue Engine Developers Ignore

Most clean energy projects are built around long-term PPAs that span 15–25 years. These contracts lock in a future cash flow that makes the project bankable.

Let’s do the math: a 50 MW solar farm that costs $1.50/W to build will generate nearly $280M in revenue over 25 years:

• Project Cost: $75M

• PPA Price: $0.125/kWh

• → FMV: ~$110M

The fair market value, based on project income, is 50% higher than the cost. And yet, this entire revenue stream is often unprotected.

The Risk Is Real: Credit Matters

Not all offtakers are equal. Many do not post credit support—especially in commercial or community solar contexts. In a tightening credit market, the risk of counterparty default is rising.

Recent downgrades across industries (e.g., Boeing, Insight Investment) underscore the volatility. When a revenue contract vanishes, the project’s fair market value plummets—because valuation models rely on expected income.

What Happens If the Revenue Goes Away?

In traditional casualty events, insurers step in to restore asset value. For PPAs, there’s no such backstop—unless you build one.

If your $75M project is protected against wind and hail but not against a failed offtaker, you’re only managing half your risk profile.  

Tools for Revenue Protection Exist

There are ways to insure your PPA-driven revenue stream—just as you do for your physical plant:

• Credit support agreements or letters of credit

• Third-party credit insurance: This is where companies like Energetic come in, offering specialized protection against offtaker default on ongoing PPA obligations or on amounts due upon termination.

These tools can stabilize project returns, protect equity, and enhance lender confidence.

Conclusion: Protect the Contract Like the Plant

PPAs may be intangible—but they’re no less valuable. Developers already insure their physical assets. It’s time to extend that mindset to the contracts that bring those assets to life.

If you’d insure your $75M plant, why wouldn’t you insure your $110M PPA?

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There’s a major M&A wave rolling through the commercial and industrial (C&I) renewables sector—and it’s reshaping how projects are built, valued, and acquired.

On one end, large IPPs are offloading C&I portfolios to focus on utility-scale. On the other, pure-play developers are intentionally building with a “sell at NTP” model in mind. Buyers—often institutional-backed aggregators—are actively hunting for bankable projects they can roll up into larger portfolios.

But while transaction activity is high, financing remains a persistent bottleneck.

The Financing Roadblock: What’s Slowing Deals

Most buyers operate with strict internal financing assumptions. If a project doesn’t have an investment-grade offtaker, it often gets priced conservatively—or skipped entirely.

This doesn’t just create a pricing mismatch. It distorts the entire pipeline:

• Sellers believe the asset is worth more.

• Buyers can’t justify the risk-adjusted return.

• And developers stop pursuing projects with non-IG offtakers altogether.

The result? A narrower set of deals gets built—and a massive swath of viable demand remains unserved.

But that risk isn’t always unmanageable. In many cases, credit risk can be mitigated. That’s where credit insurance enters—not just to rescue tough deals, but to expand what’s possible in the first place.

Smart Buyers Are Quietly Using Credit Insurance to Win

A growing group of repeat acquirers are shifting their approach. Before they close, they bring projects to Energetic Capital and ask:

“Would your team have appetite for this offtake?”

If the answer is yes, they know they can likely secure investment-grade permanent debt financing post-close. That clarity gives them the confidence to bid more aggressively—and win deals others can’t.

In this context, credit insurance becomes more than just a safety net.

It’s a strategic tool that gives buyers real bidding power.

Sellers Are Catching On—And Reaping the Benefits

We’re now seeing sellers take a page from the buy-side playbook. By engaging early and pre-packaging projects with credit insurance on part of the cash flows, they boost the overall bankability of their portfolio.

The upside?

• Better risk profile.

• Faster buyer diligence.

• Higher exit valuations.

This isn’t theoretical—it’s happening right now. And it’s turning generic portfolios into premium ones.

A Market-Level Shift Is Underway

Credit insurance is no longer just a back-end, post-financing tool—it’s becoming a foundational part of how clean energy transactions are priced, structured, and executed.

The benefits are increasingly hard to ignore:

• Sellers attract stronger buyers and accelerate time to close.

• Buyers unlock more projects without compromising returns.

• Lenders get comfortable due to credit risk-mitigation earlier in the process, not after the fact.

• Deals move faster—with fewer surprises, fewer retrades, and clearer alignment on value.

At Energetic Capital, we’re not just supporting financing—we’re actively shaping how C&I projects get valued, acquired, and monetized. This isn’t just about de-risking deals. It’s about stepping into a true capital markets role:

• enabling transactions

• improving execution

• and giving our clients a strategic edge.

In a market defined by speed, scale, and scarcity, that kind of edge isn’t optional—it’s a competitive advantage.

Ready to Play Offense in M&A?

The landscape is changing fast. Those who know how to enhance credit profiles early will move faster, win more deals, and realize stronger returns.

Whether you’re a developer building to sell or an aggregator looking to scale—talk to us before your next transaction.

Credit insurance isn’t just a de-risking tool. It’s a deal accelerator, a pricing lever, and a competitive advantage.

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‍Q1 2025 marked our highest deal volume since Q2 2020—the onset of the pandemic. It reflects a shift in market behavior.

Borrowers, lenders, and sponsors are all navigating what’s arguably the most fragile credit environment in over a decade. Interest rates remain elevated, spreads are widening, and sentiment is slipping. Amid all this, credit insurance is emerging not just as a risk tool—but as a strategic enabler.

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The Macro Backdrop: A Storm That’s Still Gathering

The signals are everywhere—and they aren’t subtle.

• Bankruptcies surged to 188 corporate filings in Q1 2025, the highest since Q1 2010. (S&P Global)

• Credit spreads are widening, especially in high-yield markets. (MarketWatch)

• Consumer sentiment collapsed to 50.8 in April—the second-lowest since 1952. (Wall Street Journal)

• 5-year inflation expectations rose from 3.0% to 4.4% year-over-year.

Even small businesses are pulling back. The NFIB Small Business Optimism Index dropped to 97.4 in March—the largest dip since mid-2022. Plans for hiring and growth hit multi-year lows. (Reuters)

And it’s not just sentiment. According to Allianz Trade, global insolvencies are on pace to rise for a fifth consecutive year. Their downside scenario? A full-blown trade war could add over 6,000 insolvency cases in the U.S. alone by 2026.

Credit Spreads Are Flashing Warnings

We’re still early in the credit cycle turn—but spreads are moving.

“Credit spreads are the canary in the coal mine.” — Emily Roland, Manulife (via MarketWatch)

What’s at stake? Mispricing. Loans are being priced off assumptions that no longer hold—particularly around liquidity, recovery, and repayment strength.

This is where credit insurance enters the picture.

What Credit Insurance Enables for Banks

Lending Continuity Without Compromise

Credit insurance allows banks to keep lending to strategic clients—even as internal risk thresholds tighten. Committees stay comfortable. Lending flows continue. Deals get done.

Value That Reaches the Sponsor

Risk mitigation benefits don’t stay locked inside the bank, they often flow downstream. Some examples are:

• Lower DSCR thresholds

• Tighter spreads

• Flexibility on non-IG obligors

• Relaxed concentration limits

Each bank has its own mechanism of what it passes onto its borrower—but across the board, insurance helps unlock flexibility that sponsors feel.

A Structuring Tool—Not Just a Backstop

Smart credit teams aren’t just using insurance for protection. They’re using it to:

• Support internal alignment across credit, risk, and origination teams

• Strengthen the overall credit package for smoother approvals

• Increase clarity and confidence in execution timelines

In this environment, that’s not a bonus—it’s essential.

Why Deal Flow Is Surging at Energetic Capital

Sponsors Are Getting Proactive

We’re seeing more deals come in before they hit the bank market. Why?

• Sponsors want lending partners who recognize and price in the value of credit insurance.

• They’re looking for capital that rewards risk mitigation—not penalizes uncertainty.

• And they’re leveraging Energetic’s network to navigate to aligned lenders.

We’re not intermediaries, but we know where the traction is—and we help direct traffic accordingly.

Banks Are Engaging Earlier

In many cases, banks come to us with deals in-flight—facing internal headwinds.

• Credit committee not convinced?

• Structuring stalled?

• Internal exposure limits too tight?

We help close the gap—strengthening credit packages and unlocking approvals.

No Preferred Lenders. Just Alignment.

We don’t push deals toward “preferred partners.” Our only objective is to get the deal over the line—efficiently, strategically, and on structure.

Energetic Capital’s Role in This Market

We’ve transacted on 1,500+ renewable infrastructure projects—directly with some of the largest banks, sponsors, and developers.

Our custom credit insurance structures are purpose-built for project finance risks in renewable infrastructure transactions. They’re designed to help capital flow into the deals that should get done—but often stall under outdated credit assumptions.

We’re not just supporting financing—we’re redefining how transactions get underwritten, structured, and executed.

In a market this fragile, that’s not a support function—it’s a capital markets role.

Ready to Navigate Today’s Credit Conditions?

In today’s market, certainty of execution isn’t just a differentiator—it’s the ask behind every term sheet. Credit insurance helps lenders and sponsors meet that ask without compromise.

This is the moment to bring in a partner that can unlock capital, de-risk outcomes, and accelerate execution.

Credit insurance isn’t a last resort. It’s a first-move advantage.

Let’s talk.

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Broadening the Scope of Credit Enhancement

Energetic Capital has built a strong reputation for providing capital solutions to C&I solar developers. As the energy transition accelerates, our innovative credit enhancement product is being applied to a broader range of energy assets. In fact, most of our policies now extend beyond solar, covering payments under Power Purchase Agreements (PPAs) and Energy-as-a-Service (EaaS) agreements—facilitating critical clean energy deployments.

Beyond traditional renewable energy financing, we've supported projects with Scale Microgrid Solutions and Redaptive, demonstrating how credit enhancement unlocks capital for projects facing financing barriers. As business models like EaaS gain traction, counterparty creditworthiness remains a key challenge—one our solutions are uniquely positioned to address.

In our latest blog, we explore how shifts in the tax credit market are reshaping lender risk perceptions. Read more here.

Fuel Cells: A Key Player in the Energy Transition

We recently announced our first fuel cell project, highlighting how our solutions help unlock financing for emerging energy technologies. Read more about this milestone here.

Fuel cells offer a highly efficient way to convert gas into electricity, providing resilient, low-carbon energy solutions. Modern designs can operate on multiple fuel types, including renewable natural gas (RNG), biodiesel, and hydrogen—making them a key technology in the transition away from conventional LNG.

Despite this fuel flexibility, the core financing challenge remains: securing long-term, creditworthy revenue streams that lenders can confidently underwrite. Our expertise in credit enhancement ensures these projects can attract the capital they need to scale.

Addressing the Credit Challenge in Fuel Cell Deployment

Scaling fuel cell projects requires lenders to see a fixed revenue stream with a creditworthy counterparty. However, not all entities investing in resiliency and efficiency have an investment-grade credit rating. This financing gap can slow deployment, especially in sectors where end-users are smaller businesses or private entities.

In our latest deal, we insured payments under a Master Services Agreement, enabling a domestic manufacturer to proceed with its fuel cell deployment. By mitigating counterparty credit risk, we unlocked capital that might not have otherwise been available—helping accelerate the adoption of this critical technology.

Unlocking Capital for the Clean Energy Economy

As clean energy technologies evolve, flexible financing solutions are essential for accelerating adoption. By enhancing creditworthiness, we help developers, manufacturers, and service providers secure financing and scale their projects more efficiently.

Credit enhancement continues to prove its value across both traditional and emerging energy markets, breaking down financing barriers and driving long-term success.

Looking ahead, the tax credit market is shifting, with new PTC buyers entering the space. In our upcoming blog, we’ll explore how these changes are shaping lender confidence and project financing. Stay tuned for insights here.

Interested in how Energetic Capital’s solutions can support your clean energy projects? Let’s connect.

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.