Powerhouse Ventures Portfolio Company Energetic Insurance Closes $24M Deal with Top-20 Bank to De-Risk Commercial Solar

In 2019, Powerhouse Ventures invested in Energetic Insurance’s seed round. At the time, they had just launched their novel credit insurance policy for commercial solar and secured insurance capacity from SCOR Global P&C, the 4th largest global reinsurer.

Today, Energetic Insurance announced the completion of a $24M term loan refinancing with Longroad Energy and Fifth Third Bank, the 14th largest bank in the United States by asset size.

Energetic’s EneRate Credit Cover? policy helps reduce offtaker risk to enable financing for clean energy projects. Energetic now insures over $40M in solar projects across 140 sites in 12 US states.

Insurance, while often arcane and overlooked, is a vital mechanism for financing clean energy. Here’s why it matters and why we’re so excited about what Energetic has built.

Commercial clean energy financing is years behind the rest of the industry.

• Falling project costs and standardized credit ratings have reduced financing barriers for most residential and utility-scale renewable energy projects.
• The commercial sector, on the other hand, continues to struggle to access capital, with site complexities and creditworthiness remaining major gating factors in securing project finance and refinancing existing projects.

There is a major opportunity gap in commercial clean energy.

• With commercial solar project costs running into the millions of dollars, banks typically require an investment grade Moody’s or S&P credit rating in order to lend for a 10-20 year financing period.
• This poses a major barrier for small and medium-size organizations: 90% of commercial businesses do not have a public credit rating.
• These unrated and sub-investment grade organizations are sitting on $200B in economically viable commercial solar opportunities, according to Wood Mackenzie.

Energetic Insurance is the critical link between financiers, insurance companies, and project developers.

• Energetic’s first-of-its-kind EneRate Credit Cover? policy unlocks project financing by covering default risk for payments on long-term power purchase agreements: when the business cannot pay, the policy pays out.
• This policy helps project developers secure superior financing and deploy more projects while de-risking the lending process for banks—opening up billions in new financeable opportunities.
• Energetic acts as a managing general underwriter (MGU) backed by reinsurance capital from SCOR, a tier-one global reinsurer.

When it comes to project financing, big banks are a big deal.

• Fifth Third Bank was able to refinance a 27 MW commercial & industrial solar project portfolio at competitive rates by taking advantage of Energetic’s policy.
• “Energetic Insurance helps fill a gap in the market by improving the credit profile of many offtakers, thus increasing the ability to finance related projects,” said Eric Cohen, Executive Director of Renewable Energy Finance at Fifth Third Bank. “We look forward to continuing to collaborate with Energetic on future financings.”
• This transaction demonstrates large scale adoption by a leading financial institution and helps validate the use of EneRate Credit Cover? for new projects as well as refinancings.

Energetic Insurance has demonstrated a new way to de-risk clean energy financing. By proving this model with the world’s biggest financiers, they are paving a path towards gigawatt scale across the commercial solar sector.

Congratulations to Co-Founder & CEO James Bowen, Co-Founder & COO Jeff McAulay, and the entire Energetic team on this significant achievement.