Brenmiller Energy See Massive Potential for U.S. Thermal Energy Storage Market with New IRS Tax Credit
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Insights
The recent clarification of tax credit rules for clean energy storage technologies, as part of the Inflation Reduction Act of 2022, represents a significant legislative milestone that could have profound implications for companies like Brenmiller Energy and the broader TES market. The inclusion of TES systems in the Section 45X Credit Rules signals a strong policy shift towards supporting decarbonization efforts.
From an energy policy perspective, this initiative is expected to incentivize the adoption of TES solutions, potentially leading to increased demand for Brenmiller's products. The credit amount of $45 per kilowatt-hour for TES systems manufactured in the U.S. could substantially lower the capital cost barrier for deploying these technologies, thus accelerating the transition to a cleaner energy grid.
The gradual phase-out of the tax credits from 2030 to 2033 is designed to provide a runway for technology maturation and cost reduction, allowing the industry to reach a point of self-sufficiency without subsidies. This long-term perspective is crucial for investors and stakeholders when considering the sustainability of the TES market growth.
For Brenmiller Energy, the proposed regulation could enhance the financial viability of its bGen TES systems. With the potential for a $1.35 million credit for a 30 MWh system, this incentive could significantly impact the company's margins and profitability. The credit aligns with Brenmiller's strategic design of the bGen system for scalability and adaptability, potentially positioning the company as a competitive player in the U.S. market.
Investors should note the market's projected growth, with the TES market anticipated to reach over $2 trillion by 2040. The explicit support from the U.S. government could serve as a catalyst for Brenmiller's growth and the TES industry at large. However, it is important to monitor the implementation of these guidelines and the company's ability to capitalize on the opportunity, considering the competitive landscape and technological advancements.
Brenmiller's emphasis on establishing local manufacturing footprints aligns with the current trend towards supply chain resilience and sustainability. The company's ability to replicate its production lines and utilize locally sourced components could provide strategic advantages, such as reduced logistics costs and enhanced partnership opportunities with local suppliers.
The tax credit could act as a catalyst for developing a robust domestic TES supply chain in the U.S., which is essential for meeting national decarbonization goals. The focus on modular design and high energy density of the bGen system may facilitate rapid deployment and integration into the existing energy infrastructure, offering a value proposition that extends beyond mere cost savings.
ROSH HA’AYIN,
The December 14th, 2023 publication in the Federal Register, the official journal of the
"This credit incentive is a pivotal moment for thermal energy storage, and for Brenmiller," stated Brenmiller Chairman and CEO, Avi Brenmiller. "It signals a clear understanding that thermal energy storage is a critical pillar for decarbonization. We believe this proposed regulation's impact on TES will mirror the transformative effect tax credits had on solar and electric vehicles, propelling companies like Tesla."
Brenmiller's turn-key bGen manufacturing system is strategically designed for global replication and local market adaptability. The bGen's modular design with high energy density aligns with the proposed Section 45X Credit Rules, which scales by kilowatt-hour stored, potentially qualifying Brenmiller's maximum-capacity system for a significant credit. Brenmiller has always prioritized establishing local manufacturing footprints within its target markets like the
The explicit inclusion of TES in the credit program is a significant development. Previously, uncertainty hung over TES eligibility, prompting Brenmiller's active engagement with other companies and associations to proactively advocate for its inclusion over the last year. This change not only benefits Brenmiller but also signifies broader recognition of TES as a vital decarbonization technology. According to a report from the Renewable Thermal Collaborative, if deployed at scale, thermal batteries have the potential to slash emissions by nearly 800 million metric tons per year. Globally, the market for thermal energy storage is predicted to reach over
The initial guidelines clarify that "modules with no battery cells" manufactured in the
By absorbing and storing excess wind and solar energy as heat, reaching temperatures of around 650°C (1200°F), the bGen is ideally suited to power industrial processes – projected to be the largest source of
While the potential cost savings for Brenmiller are encouraging, the larger focus lies in building a robust domestic TES supply chain in
About Brenmiller Energy Ltd.
Brenmiller Energy delivers scalable thermal energy storage solutions and services that allow customers to cost-effectively decarbonize their operations. Its patented bGen thermal storage technology enables the use of renewable energy resources, as well as waste heat, to heat crushed rocks to very high temperatures. They can then store this heat for minutes, hours, or even days before using it for industrial and power generation processes. With bGen, organizations have a way to use electricity, biomass and waste heat to generate the clean steam, hot water and hot air they need to mold plastic, process food and beverages, produce paper, manufacture chemicals and pharmaceuticals or drive steam turbines without burning fossil fuels. For more information visit the company’s website at https://bren-energy.com/ and follow the company on X (formerly Twitter) and LinkedIn.
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal and Israeli securities laws. Statements that are not statements of historical fact may be deemed to be forward-looking statements. For example, the Company is using forward-looking statements in this press release when it states: that it believes that the regulation's impact on TES will mirror the transformative effect tax credits had on solar and electric vehicles; that the bGen's modular design aligns with the proposed Section 45X Credit Rules, which scales by kilowatt-hour stored, potentially qualifying Brenmiller's maximum-capacity system for a significant credit;; that the proposed tax credits are scheduled to phase out gradually from 2030 to 2033; that the proposed tax credits have potential cost savings and market potential for Brenmiller; that thermal batteries have the potential to slash emissions by nearly 800 million metric tons per year; the market for thermal energy storage is predicted to reach over
View source version on businesswire.com: https://www.businesswire.com/news/home/20231221998518/en/
Media:
Tori Bentkover
brenmillerenergy@antennagroup.com
Source: Brenmiller Energy Ltd.
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