Brenmiller Energy See Massive Potential for U.S. Thermal Energy Storage Market with New IRS Tax Credit

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12/21/2023 - 08:30 AM

ROSH HA’AYIN, Israel--(BUSINESS WIRE)-- Brenmiller Energy Ltd. (Nasdaq: BNRG) ("Brenmiller," "Brenmiller Energy" or the "Company"), a leading global provider of thermal energy storage (TES) systems for industrial and utility markets, today shared comments enthusiastically welcoming the release of initial guidance for U.S. tax credits specifically incentivizing clean energy storage technologies, including TES.

The December 14^th, 2023 publication in the Federal Register, the official journal of the U.S. government, clarifies credit rules for the Section 45X Advanced Manufacturing Production Credit (the “Section 45X Credit Rules”) established by the Inflation Reduction Act of 2022. The credit rules, currently in a 60-day public comment period, would pave the way for domestic U.S. planning, production, and supply chain development for crucial energy infrastructure like TES if enacted as currently proposed.

"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 U.S., and the bGen's production lines at its TES gigafactory in Dimona, Israel were designed to be replicated elsewhere with locally sourced components, which can facilitate rapid deployment, minimizing logistical challenges and fostering partnerships with local material suppliers.

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 $2 trillion by 2040, according to the Long Duration Energy Storage Council.

The initial guidelines clarify that "modules with no battery cells" manufactured in the U.S., including TES systems, will receive a $45 per kilowatt-hour credit. As an example, a 30 MWh TES system (similarly sized to a recently announced bGen system in Israel) would qualify for a $1.35 million credit under the proposed structure in the U.S. These tax credits are scheduled to phase out gradually from 2030 to 2033.

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 U.S. emissions by 2030. This opens doors for cost-competitive clean energy solutions in a sector crucial for national decarbonization goals.

While the potential cost savings for Brenmiller are encouraging, the larger focus lies in building a robust domestic TES supply chain in the United States. The $45/kWh credit unlocks an exciting market potential, and Brenmiller is committed to working with stakeholders to establish a thriving U.S. TES ecosystem.

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 $2 trillion by 2040, according to the Long Duration Energy Storage Council; and that Brenmiller is committed to working with stakeholders to establish a thriving U.S. TES ecosystem. Without limiting the generality of the foregoing, words such as “plan,” “project,” “potential,” “seek,” “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate” or “continue” are intended to identify forward-looking statements. Readers are cautioned that certain important factors may affect the Company’s actual results and could cause such results to differ materially from any forward-looking statements that may be made in this press release. Factors that may affect the Company’s results include, but are not limited to: the Company’s planned level of revenues and capital expenditures; risks associated with the adequacy of existing cash resources; the demand for and market acceptance of our products; impact of competitive products and prices; product development, commercialization or technological difficulties; the success or failure of negotiations; trade, legal, social and economic risks; and political, economic and military instability in the Middle East, specifically in Israel. The forward-looking statements contained or implied in this press release are subject to other risks and uncertainties, many of which are beyond the control of the Company, including those set forth in the Risk Factors section of the Company’s Annual Report on Form 20-F for the year ended December 31, 2022 filed with the SEC on March 21, 2023, which is available on the SEC’s website, www.sec.gov. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.