With 2025 behind us, Crux's Debt Capital Markets and Industry Coverage teams shared their insights into last year's lending environment and how market participants should be thinking about debt financing in 2026.
Looking back at 2025, what surprised you most about the debt capital markets for clean energy developers and manufacturers?
Hun Wong (Principal, Debt Capital Markets): What surprised me most was the resilience of lender appetite despite significant uncertainty. We entered 2025 with substantial policy overhang — questions around foreign entity of concern (FEOC) guidance, potential legislative changes, and broader economic concerns. Many expected lenders to pull back and wait for clarity.
Instead, capital providers remained actively engaged throughout the year, willing to work through complex diligence issues for the right opportunities. Yes, lenders became more selective, but overall deployment activity didn't slow down the way some predicted. The takeaway for developers is that even in uncertain environments, well-structured projects with strong fundamentals can still access capital on attractive terms.
Rhoda Karagiannis (Senior Manager, Industry Coverage): Honestly, 2025 didn't bring major surprises — it reinforced trends we've been watching for several years. The shift from “growth at all costs” to cash-flow generation that began taking hold across capital markets continued to deepen in the clean energy space.
Lenders are increasingly focused on near-term cash generation and proven operational track records rather than long-term growth narratives. This means developers with projects that have visibility into stable, predictable cash flows are accessing capital on favorable terms, while earlier-stage or more speculative projects face tighter lending standards or are not financeable. It's a maturation of the market that we expected, and 2025 confirmed that discipline around cash flow isn't going away anytime soon.
Amy Yun (Senior Manager, Debt Capital Markets): What stood out to me was the sheer scale of market activity — we saw $75 billion in renewables debt financing in 2025, representing a 26% volume increase versus 2024. This growth was largely driven by strong underlying power demand from electrification trends and the surge in data center development, which is fundamentally reshaping how developers and lenders approach the sector.
The other major shift was the continued broadening of the capital base beyond traditional banks. Private credit funds, infrastructure investors, insurers, and institutional investors are creating multiple financing pathways for sponsors. In fact, almost all of Crux's debt transactions in 2025 that reached term sheets were with non-bank lenders. This diversification means developers have more options, but they also need to understand how different capital providers underwrite and structure deals differently.
What are you hearing from lenders right now? What types of projects and structures are getting the warmest reception in 2026?
Andrew Hsiung (Managing Director, Debt Capital Markets): We're in constant dialogue with lenders across the clean energy debt markets — it's a core part of how Crux maintains deep market intelligence and helps our clients access the right capital at the right time.
What we're hearing consistently is that lenders remain active and looking to deploy, but underwriting discipline is very high. They're gravitating toward well-structured opportunities — projects with lined-up offtake agreements, clear construction timelines and milestones, and sponsors working with creditworthy counterparties. Most lenders prefer contracted or partially contracted assets, with fully merchant renewables and standalone storage among the most difficult to finance. Additionally, many conservative lenders are effectively pushing higher equity requirements, which is pressuring smaller developers and thinning the pool of financeable projects.
The deals getting termed quickly are those where both issuers and lenders have a clear understanding of due diligence requirements and transaction structures. Importantly, lenders are also thinking beyond individual transactions — they're looking to establish longer-term relationships with sponsors that have established pipelines. If you can demonstrate you're not a one-project developer but have a reliable flow of quality opportunities, you'll find lenders much more willing to move quickly and offer competitive terms. Building those relationships now, even before you need immediate capital, pays dividends when you're ready to close financing.
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What are the biggest stories to watch in debt capital markets over the next 12–18 months, and what should developers be preparing for?
Jim Alderson-Smith (Managing Director, Industry Coverage): Foreign entity of concern (FEOC) compliance is going to be the dominant concern in debt markets. Without clear guidance from the US Department of the Treasury, we're seeing the market segment projects into three distinct categories that lenders are treating very differently:
Developers should be preparing by documenting their supply chains now, understanding which components might trigger FEOC issues, and building relationships with lenders that have developed their own FEOC evaluation frameworks. Those who can demonstrate clean supply chains early will have a significant competitive advantage in the debt markets. That’s why Crux created a comprehensive FEOC diligence checklist that walks developers through specified foreign entity and foreign-influenced entity diligence items for most credit types, as well as effective control and material assistance diligence considerations for 45X and tech-neutral credits. We continue to expand and update the checklist to reflect the latest federal guidance so that our clients are prepared to meet evolving lender expectations and secure financing on favorable terms.
Amy Yun (Senior Manager, Debt Capital Markets): The One Big Beautiful Bill (OBBB) provisions are compressing what was once a decade-long development runway into a July 2026 deadline, pushing many sponsors to pivot away from building large, long-dated pipelines and toward accelerating project timelines. This has driven a significant pickup in investor activity.
On FEOC, lenders face challenges that go beyond traditional supply chain documentation. The new rules introduce the concept of "effective control," meaning that non-ownership contractual arrangements like intellectual property (IP) licensing, royalty agreements, operations and maintenance (O&M) agreements, or service contracts may trigger foreign influence determinations. Additionally, for lenders financing projects potentially eligible for §45X, §48E, and §45Y credits, the expanded material assistance restrictions require stricter diligence on component and materials certifications. Every lender and investor is waiting for additional guidance, as this affects not just supply chain management but entity status, credit eligibility, and contract drafting.
What due diligence issues consistently slow down or derail debt financings?
Gabe Barclay (Senior Manager, Debt Capital Markets): The most common bottleneck we see isn't technical complexity — it's the simple logistics of documentation sharing and information flow between developers and lenders. When documents are scattered across email threads, file-sharing links, and different platforms, it creates friction that can add weeks to a financing timeline.
We've seen this challenge firsthand, which is why Crux offers a centralized data room where developers and lenders can interact directly. Having all due diligence materials — interconnection agreements, equipment warranties, FEOC compliance documentation, third-party reports like power market analyses and insurance consultant assessments — organized in one secure location dramatically accelerates the process. It also signals to lenders that a developer is organized and serious, which can influence term sheets before detailed diligence even begins.
The developers who close financing fastest are those who proactively organize their documentation and demonstrate transparency from day one. In a market where speed to close can make or break a project's economics, eliminating these administrative delays is increasingly critical.
How should developers think about the interplay between debt financing and transferable tax credit monetization?
Tara Desai (Principal, Industry Coverage): These two financing streams are deeply interrelated. Transferable tax credit deals often require sign-off from existing lenders, and, in many cases, you'll need forbearance agreements from term lenders to execute the transfer. For projects with start-of-construction dates in 2025 or later, lenders will also need to do internal FEOC analysis before approving the transaction. Beyond approvals, the credits themselves frequently serve as collateral in lending structures, and we're now seeing entire lending products built specifically around tax credit monetization.
The key is early coordination — developers need clarity on tax credit eligibility, timing, and pricing upfront because it directly impacts the leverage and terms lenders will offer. Projects that align their tax credit strategy with the debt raise from day one are materially easier to finance in today's selective lending environment. Engage both your debt and tax equity advisors early and simultaneously.
Melissa Miranda (Senior Manager, Industry Coverage): In our conversations with developers across different technologies and project sizes, we consistently hear they need both debt and tax transfer solutions — and they need them to work together seamlessly. That's exactly why Crux offers both on a single platform. We've built relationships with tax credit buyers and capital lenders who understand how these pieces fit together, which means developers can coordinate their full capital stack in one place rather than juggling multiple intermediaries with different timelines and requirements.
We've seen interest rates remain elevated throughout 2025. How are lenders thinking about pricing, credit standards, and terms for clean energy projects heading into 2026?
Jim Alderson-Smith (Managing Director, Industry Coverage): If rates begin to decline in 2026, we could see an interesting dynamic emerge in the lending market. Fixed-rate credit funds that have committed to specific return hurdles for their investors will need to find ways to maintain those yields in a lower-rate environment. That pressure could push capital toward riskier transactions and emerging technologies that were previously difficult to finance.
For developers, this could create opportunities — particularly for those working on newer technologies like long-duration storage, offshore wind, or advanced manufacturing projects that have struggled to access debt on attractive terms. Lenders who were previously conservative may become more willing to underwrite first-of-a-kind projects or accept higher leverage ratios to generate the returns their funds require.
That said, any move toward riskier lending will likely come with tighter covenant packages and more extensive due diligence requirements. Developers should be prepared to demonstrate strong operational capabilities and robust risk-mitigation strategies to take advantage of this potential shift in credit appetite.
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Bridge financing and safe harbor loans have become increasingly important. What do developers need to know about these products heading into 2026?
Phil Coconcea (Senior Manager, Industry Coverage): Don't wait. We saw a large surge in safe harbor financing ahead of the September 2025 deadline. It’s likely we’ll see the same pattern repeat as we approach the July 4, 2026 cutoff, especially for developers who didn't secure safe harbor in 2025.
Distributed generation players need to be particularly proactive here. Securing equipment financing and beginning physical work on a project ahead of the July cutoff allows developers to lock in current ITC rates before legislative changes take effect, but lenders have limited capacity, and underwriting timelines don't compress indefinitely. If you wait until May or June 2026, you may find yourself competing for limited capital with extended closing timelines. Start those conversations now — get term sheets lined up and understand your lender's documentation requirements.
James Turnbull (Principal, Industry Coverage): These are no longer niche products — they're core elements of the capital stack. Sponsors need to understand in particular how tax credit bridge loans interact with other long-term debt and tax credit monetization. The sponsors who succeed are those making conservative assumptions around pricing and timing of tax credit proceeds, and capitalizing their projects accordingly. Lenders require a credible take-out plan from day one, so don't treat bridge financing as an afterthought to be figured out later in the process.
What do you see as the differentiators for developers who successfully raise capital?
Andrew Hsiung (Managing Director, Debt Capital Markets): Lenders want to see secure, high-quality revenues backed by strong offtake agreements that demonstrate revenue certainty. They’re evaluating the underlying technology, the credit quality of your offtakers, and what percentage of your facility’s output is already contracted.
Beyond the fundamentals, understanding your FEOC situation has become table stakes in 2026. Developers who can articulate a clear compliance strategy and supply-chain positioning are getting term sheets, while those still figuring it out are getting passed over.
Rhoda Karagiannis (Senior Manager, Industry Coverage): The winners are the developers who come to the table prepared and organized. That means having your full diligence package ready to share — capital-stack status, permitting progress, supply and feedstock agreements, offtake contracts, and a credible financial model. When lenders see that level of preparation, it signals that you’re a serious operator who understands what capital providers need to see.
This is exactly where Crux’s advisory capabilities can help. We work with developers to plan and sequence these requirements against market-standard diligence expectations before they go to market. We help organize their story and documentation so they can enter capital markets prepared, credible, and positioned for the strongest possible financing outcomes.
Contact us to learn more about working with the Crux team.
