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Energetic Unveils Credit Risk Insurance Policy

Energetic Insurance has finalized its anticipated credit insurance policy for commercial solar projects, designed to protect developers against potential payment default from businesses signing on to commercial or industrial projects.

According to Energetic, over 90 percent of U.S. companies don’t have a public credit rating, which equates to a perception of risk from financiers. The insurance policy aims to change that, opening up a significant but untapped market for development.  The 10-year “EneRate Credit Cover” is backed by global reinsurer Scor Global P&C.

Until now, the bespoke underwriting that small and medium-sized commercial solar deals require has thrown up barriers for approving a significant volume of projects. Michelle Davis, a senior solar analyst with Wood Mackenzie Power & Renewables, compares Energetic’s policy to a “very savvy underwriter” that can accurately assess a project’s offtaker risk.  “In terms of the actual innovation of the product, it is one of a kind,” Davis said.

According to studies from Navigant and the National Renewable Energy Laboratory, solar PV would work on between 60 and 65 percent of commercial rooftops. But Davis said that, as of the end of 2017, only 1 percent of offices or other commercial buildings in the U.S. had solar installed. That reveals a significant gap in deployment versus potential.

That’s why some in the industry are looking at Energetic’s policy as “a game-changer,” as Jordan Blanchard, general manager of renewable energy lending at Live Oak Bank, called it.  Live Oak has worked with Energetic over the last year to develop the “EneRate” policy and make sure it works for lenders. The bank is now launching a small-business solar division specifically targeted at projects in the $500,000 to $5 million range.

“The only way we can do that is with the Energetic policy,” said Blanchard.

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