How do I talk to my guy about his "shortcomings" while staying sensitive to his obvious embarrasment? (NSFW)

So I’ve been best friends with this guy for about 4 years now. (There was a time for about a year we didn’t talk but that’s a different story)

Then, last summer we started talking again (after a psycho gf who drove me away for a while) and instantly it was like we’d never stopped talking except this time we would hook up every now and then (nothing serious, just making out really). It was only a summer thing so we decided that we were just still really good friends and to not take it any further. A year later we’re still doing the same thing except we’re a little more serious and even though he says he’s not ready to actually date anyone right now we are for the most part together.

(now to the point of my quesiton)

Since we’re more serious now (and have gotten past the slightly awkward “this is like my best friend” moments) I didn’t see any problem with having sex with him because even our friends knew it was going to happen eventually. Anyways, one night after getting in from a party we started fooling around but as soon as the moment arrived he completely lost his hard on…. and couldn’t get it back. I was a little tipsy and just decided to pass out and hopefully forget it happened. He apologized the next day and I didn’t worry about it but hoped that I would never have to go through that again.

Unfortunately we went for attempt number 2 last night during our typical movie night and both times we tried it was the same story. He seems ok and ready to go right up until it’s time for penetration and then… nothing. We haven’t talked about it other than his apology for the first night but I don’t know what to do!! If this was any guy I had just met I’d probably just not talk to him anymore but I really care about this guy and
a. don’t wanna hurt his feelings
b. don’t wanna ruin what we have over this
c. this might explain a lot about his behavior

How do I bring this up to him?? I don’t want to make him more embarrased than he probably already is but I’m also not sure if it’s me. And has this ever happened to anyone?!!! I know I can’t be the first… I need advice!!