Crux has released its first debt capital report on lending and investment dynamics in the U.S. clean energy and manufacturing sector. This report comes at a time when surging energy demand and policy uncertainty presents both opportunities and challenges for American developers and manufacturers. Crux is addressing today’s critical need for greater transparency into capital costs, project availability and investor appetite.
Transferable tax credits are driving hundreds of billions in private investment into American energy and manufacturing projects. The credits have also presented an opportunity to centralize otherwise disparate project finance markets for advanced manufacturing, bioenergy, battery storage, critical minerals and clean energy.
“As we face unprecedented energy demands and shifting geopolitics, the efficiency and transparency of capital markets will determine whether America can successfully build the energy infrastructure of the future,” said Alfred Johnson, CEO and co-founder of Crux. “This report pulls back the curtain on financing trends that have historically been opaque, giving project developers and manufacturers the insights they need to structure competitive financing packages.”
Critical timing amid policy uncertainty
The report’s release comes as potential changes to federal tax credit policies could reshape the financing landscape. If transferable tax credits are scaled back or repealed for certain market segments, clean energy developers and manufacturers will face an even greater need to source alternative financing through debt capital markets. Private debt markets are opaque, illiquid and inefficient.
“The interconnected nature of clean energy financing means that changes in one area ripple throughout the entire market,” explained Johnson. “For example, our data shows that tax credit bridge lending — which allows projects to pull forward the value of future tax credits — has become increasingly accessible, with terms largely driven by advance rates and the presence of committed investment-grade tax credit buyers. If tax credit policies change, understanding these debt market dynamics becomes even more critical for project success.”
Key market findings:
- Capital markets are increasingly open to a wider variety of projects, but availability varies based on technology, strength of the sponsor and contracted offtake. Capital is most widely available for solar and storage projects; and nearly all investors at all stages of the development process indicated that solar was a technology that they invest in. Less established technologies — like advanced manufacturing, biofuel, carbon capture and nuclear — have historically faced challenges accessing debt financing, but in recent years have seen growing interest from investors supported by transferable tax credits.
- Investment structures like tax and preferred equity are highly dynamic and evolving. Tax equity structures have evolved to hybrid structures, or t-flips, which explicitly contemplate the sale of a portion of tax credits in the transfer market. These structures comprised about 60% of the tax equity committed in 2024, and that share is expected to rise. This trend has already expanded the availability of tax equity to a broader range of projects.
- For construction/term lending, projects with contracted offtake generally have greater capital availability and lower cost of capital. However, the data indicates a smaller but meaningful group of lenders are open to merchant or partially contracted projects. While more than 70% of investors indicated that they were more willing to invest in a fully contracted project, some lenders view merchant or partially contracted projects as a better fit for their return requirements.
- Capital markets are likely to continue to expand in both availability and cost-competitiveness, but require a stable and constructive policy environment to do so. Policy volatility is unconstructive for risk-averse project finance lenders, and is likely to disrupt investment. This effect is particularly concentrated in newer technologies, such as nuclear, manufacturing and biofuels. Whether the market continues its cycle of expansion or whether it recoils back to the most well-established wind and solar projects will be a function of ongoing political processes.
Read the report here.
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