A commercial and industrial (C&I) solar portfolio can include customers with very different credit profiles, from investment-grade companies to smaller businesses without a credit rating. For lenders, that means looking beyond how much power the projects will produce to assess whether customers can keep paying under their contracts over the life of the loan.

That mix of credit quality can make financing more complicated. Lenders need to understand exposure by counterparty and what protection is available if a customer stops paying. At Energetic Capital, we provide credit insurance that helps developers and owners address those concerns and bring more lenders into the conversation.

What Lenders Look For

When underwriting these portfolios, lenders assess both the individual customers and the portfolio as a whole. Who is responsible for paying under each power purchase agreement (PPA)? How much revenue comes from the largest customers? If one defaults, how would that affect the portfolio’s ability to repay its debt?

An unrated customer is not necessarily a poor credit risk, but assessing its financial strength takes more work. Lenders need enough information to get comfortable with that exposure and a structure that accounts for the risks they identify.

Why Mixed-Credit Portfolios Can Be Financeable

Not every customer needs an investment-grade rating for a portfolio to secure financing. Lenders may get comfortable with a mix of credits when:

• Revenue is spread across customers, industries, and locations, limiting dependence on any one source.
• Reserves, parent guarantees, or credit insurance provide support if a customer cannot pay.
• The portfolio can withstand some customer defaults and still meet its debt obligations.
• The sponsor has the experience and resources to monitor customers, manage payment issues, and respond to defaults.

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What Lenders Evaluate in Mixed-Credit C&I Solar Portfolios

Lenders look at each customer’s ability to pay, how much the portfolio depends on that customer, and what happens if payments stop. Those questions shape how much debt the portfolio can support and the protections a lender may require.

Customer credit and concentration

The starting point is the company responsible for paying under each PPA. For unrated customers, financial statements, payment history, and any parent guarantees help lenders assess financial strength beyond the absence of a credit rating.

The size of each exposure matters, too. A weaker customer representing a small share of revenue raises different concerns than one accounting for a quarter of the portfolio. Lenders also look for shared risks across customers. A portfolio with many separate offtakers may still be heavily exposed to one industry or local economy.

Contracts and continued access to the site

A long-term PPA provides a basis for financing, but lenders also need to understand what happens if the customer sells the property, vacates the building, or closes its business. Can the contract transfer to a new customer? Can the project owner continue accessing and operating the system and does that market allow ability to [virtual] net meter? What rights does the lender have to step in and address a default?

These provisions affect the options available when something goes wrong. Clear site rights, assignment provisions, and cure periods can help preserve a project’s value, although they do not guarantee a replacement customer or uninterrupted revenue.

Cash flow under stress

Lenders test whether the portfolio can service its debt when results fall short of expectations. Alongside lower solar production, downside cases may include late payments, customer defaults, and time needed to replace lost revenue. The combination matters: losing a major customer during a period of weaker production can put more pressure on cash flow than either event alone.

Those results help determine loan size and the required debt service coverage ratio (DSCR). Greater uncertainty may lead a lender to size debt more conservatively or require additional support.

Reserves and credit support

Reserves give a portfolio cash to draw on during payment interruptions. Depending on the transaction, lenders may also require cash to be retained when performance deteriorates, rather than distributed to the owner.

Parent guarantees and credit insurance can provide additional protection against customer nonpayment. Lenders assess who stands behind that support, what it covers, and when funds would be available. The structure needs to account for both potential losses and the cash needed to keep servicing debt while a payment issue is resolved.

The sponsor’s ability to manage the portfolio

Lenders want to know who will monitor customer financial health, follow up on overdue invoices, maintain the projects, and respond to defaults. A sponsor’s experience handling those issues is relevant alongside its development and operating track record.

A useful financing package brings this information together: customer financials, revenue concentrations, key contract terms, downside cash flows, and proposed credit support. It should give lenders a clear view of where the risks sit and how the sponsor plans to manage them.

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How Energetic Capital Helps Address Offtaker Credit Risk

A developer can have well-built projects and signed PPAs, yet still struggle to secure financing because lenders are uncomfortable with the customers behind those contracts. That can mean less debt, more cash tied up in reserves, or fewer lenders willing to consider the portfolio.

At Energetic Capital, we provide credit insurance that protects against covered offtaker payment defaults. By placing that protection with highly rated insurers, we give lenders an additional source of repayment if a customer fails to meet its obligations. Coverage is structured around the underlying revenue contracts and financing requirements, with defined limits, terms, and conditions.

For developers and owners, that can expand financing options, support greater debt proceeds, and reduce reliance on cash collateral or other credit support. It can also give them more flexibility to include unrated or below-investment-grade customers in a portfolio. The financing benefit depends on the transaction, the coverage provided, and how the lender recognizes that protection.

How Credit Insurance Fits Alongside Other Protections

Lenders often use a combination of tools to address customer payment risk. A parent guarantee adds support from a stronger company, while a letter of credit provides bank-backed payment security but uses the customer’s banking capacity. Cash reserves provide liquidity during interruptions, and assignment provisions can help preserve options if a customer leaves the site or sells the business.

Credit insurance can supplement these protections and, where lenders agree, replace some guarantee or collateral requirements. The aim is to address the credit exposure in a way that supports financing while leaving developers and customers with more capital available for their businesses.

Preparing Your Portfolio for Financing

Before approaching lenders, put together a clear picture of who pays, how much each customer contributes, and what support sits behind those obligations. A useful starting point is a customer schedule showing financial information, contract terms, revenue exposure, and any guarantees or other credit support. Identify concentrations early so they can be addressed before they become a sticking point in financing discussions.

Build downside cases alongside the base case. Show what happens if a major customer stops paying, how long reserves would last, and what assumptions you have made about recovering or replacing that revenue. Be clear about who will monitor customer credit, manage collections, and respond when payments fall behind.

If credit insurance is part of the proposed structure, bring the insurance provider into the discussion while financing terms are still being developed. That gives the sponsor, lender, and insurer time to assess which exposures can be covered and how the coverage would fit with the loan requirements.

At Energetic Capital, we work with sponsors and lenders through that process, from reviewing the customer mix to structuring coverage around the financing. Starting early helps establish where insurance can make a meaningful difference to debt proceeds, collateral requirements, or lender participation.

Frequently Asked Questions

What is a mixed-credit C&I solar portfolio?

It is a group of commercial and industrial solar projects whose customers have different credit profiles. Some may be investment-grade companies, while others are lower-rated or unrated businesses. Being unrated does not necessarily mean a customer is financially weak, but lenders need to assess its ability to meet long-term payment obligations.

How does customer credit affect how much debt a portfolio can support?

Lenders assess how much contracted revenue they are comfortable relying on to repay the loan. Concerns about customer credit or concentration can lead to lower debt proceeds, higher coverage requirements, or additional reserves. Guarantees, credit insurance, and other protections may help lenders give more value to revenue they would otherwise discount.

What does credit insurance cover?

Credit insurance protects against covered payment defaults under the insured contracts, subject to the policy’s terms and limits. It gives lenders and project owners financial protection if an insured customer fails to pay. It does not cover every reason a project might lose revenue, such as equipment failure or lower solar production.

How does credit insurance compare with other forms of credit support?

Each tool addresses risk differently. Parent guarantees depend on the guarantor’s financial strength, letters of credit provide bank-backed support, and reserves put cash aside for payment interruptions. Credit insurance transfers defined payment default risk to an insurer and can work alongside these tools or replace certain requirements where the lender agrees.

When should a developer consider credit insurance?

It is worth exploring when customer credit is limiting debt proceeds, narrowing the lender pool, or creating significant collateral requirements. Bringing it into discussions early gives the parties time to assess coverage and determine whether it improves the financing.

Does Energetic Capital compete with lenders?

No. We provide credit insurance that supports financing from banks and other capital providers. We work with sponsors and lenders to address offtaker credit concerns that could otherwise limit a transaction.

Bringing the Portfolio to Lenders

A mix of customer credit profiles does not have to prevent a C&I solar portfolio from securing financing. Sponsors can make the process easier by presenting clear customer information, realistic downside cases, and a plan for managing payment disruptions.

If offtaker credit is a sticking point in your financing, Energetic Capital can help assess whether credit insurance would address the lender’s concerns and support the terms you are seeking.