EDISON, NJ, Oct. 31, 2022 (GLOBE NEWSWIRE) — Eos Energy Enterprises, Inc. (EOSE) (“Eos”), a leading provider of safe, scalable, efficient and sustainable energy storage systems in zinc base, today’s announcement announced the expected impacts on the energy storage industry and on Eos following the recent passage of the Transformational Inflation Reduction Act (“IRA”) and the change Eos strategy statement and revised outlook for fiscal year 2022.
“We believe that one of the significant benefits of the IRA is that it will significantly reduce the costs of battery cells, modules and energy storage systems, especially for those manufactured in the United States which, according to us, will accelerate the national energy transition,” said Joe Mastrangelo, president and CEO of Eos. “We continue to see accelerated demand in our strong pipeline of opportunity. The IRA is driving the building of America’s clean energy future and Eos is well positioned as one of the only large-scale U.S. manufacturers of energy storage. proven long-lasting energy.
The IRA offers significant economic incentives for energy storage customers and manufacturers starting up for projects commissioned after December 31, 2022. Customers commissioning new energy storage facilities after this date will be entitled to claim at least a thirty percent investment tax credit. (“ITC”) under certain conditions. The IRA also offers an additional 10% credit if the project is in an “energy community” and another 10% credit if the project meets the national content requirements, which will be defined when the implementing regulations are finalized. . Mastrangelo continued, “The 10% domestic content bonus is a strategic advantage for Eos resulting from our proximity and Made in America strategy, and we currently anticipate that projects using Eos batteries would be eligible for the bonus.
As of 2023, there are also significant Production Tax Credits (“PTCs”) that can be claimed on battery components manufactured in the United States and sold to customers that could apply to Eos, including including credits for ten percent of the cost incurred to make the electrode materials active, $35 per kWh of battery cell capacity and $10 per kWh of battery module capacity. These credits are cumulative, which means that Eos expects to be able to claim the amount of the tax credit for each component. The IRA directs the Internal Revenue Service to pay manufacturers the cash value, also known as direct payment, of production tax credits for the manufacture of battery components, and therefore, these credits can be a new source of cash for Eos. The direct payment option is valid for up to five tax years, after which these tax credits can be sold to other companies for cash.
Benefits to energy storage customers and manufacturers will begin in 2023. Eos has worked proactively and in partnership with its customers to push back orders originally scheduled to be produced and delivered this year until 2023 so that Eos and its customers can better realize the benefits offered. by ITC. Eos intends to finalize production and delivery of the Pine Gate Renewables Eastover project in the fourth quarter of 2022 and reduce production of the current generation product thereafter. This results in a revised revenue forecast for the year 2022 of between $17 million and $20 million, moving the remaining revenue originally forecast in 2022 to 2023.
Mastrangelo added: “In the context of new IRA legislation and major advancements in our new battery design, the Eos Z3™ battery, we believe that reducing production of our current product and focusing our team on tooling the factory for the production of Eos Z3 batteries is the solution. best capital allocation decision for the Company. We are convinced that this decision will create long-term value, both for our customers and for our shareholders. The Eos Z3 battery is based on the same stable and proven chemistry that has not fundamentally changed for the better part of a decade. The Eos Z3 battery is engineered and purpose-built for scalability and cost. It’s simple with 50% fewer battery cells per module and 98% fewer welds than the current product.
“The Eos Z3 battery is a paradigm shift in design that dramatically reduces assembly complexity,” said Francis Richey, senior vice president of research and development at Eos. “The incorporation of conductive plastic into our patented bipolar electrode design reduces cost and weight and improves system manufacturability and performance.” The Eos Z3 battery is designed to be capable of significantly higher manufacturing throughput and reduced cycle times at large scale production, which will allow Eos to maximize PTC over the current generation product.
As previously announced, Eos has been invited to the due diligence stage of the US Department of Energy’s (“DOE”) Renewable Energy and Energy Efficiency Lending Program. The DOE’s Lending Programs Office (“LPO”) invitation to Eos to undertake full due diligence represents a significant step forward in the LPO’s assessment of Eos’ loan application. This step includes LPO performing its due diligence of Eos’ plan to expand manufacturing to support at least 3 GWh of production capacity. During this stage, Eos and LPO will work on the negotiation of a Term Sheet containing the main conditions of the loan. This work provides the LPO with the basis to advance the loan to conditional commitment. Although the DOE LPO’s invitation for due diligence does not guarantee that the DOE will offer a conditional commitment or grant a loan to Eos under the DOE LPO, Mastrangelo concluded, “We believe that Eos is well positioned in this process since our products and technologies are a catalyst for the reduction of greenhouse gas emissions and decarbonization. In addition, the company’s Made in America and job creation strategy meets many of the policy goals of the IRA and the wider White House administration.
Eos Energy Enterprises, Inc. is accelerating the shift to clean energy with positively ingenious solutions that are transforming the way the world stores energy. Our breakthrough Znyth™ The aqueous zinc battery was designed to overcome the limitations of conventional lithium-ion technology. Safe, scalable, efficient, sustainable – and made in the USA. — it’s the heart of our innovative systems that today offer utility, industrial and commercial customers a proven and reliable energy storage alternative. Eos was founded in 2008 and is based in Edison, New Jersey. For more information about Eos (EOSE), visit eose.com.
This press release contains certain statements that may constitute “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements regarding tax credits available to our customers or to Eos pursuant to the Reduction of Inflation Act, statements regarding our ability to obtain a loan from the Department of Energy LPO, or our intended use of proceeds from any loan facility provided by the United States Department of Energy, statements that refer to projections, forecasts, or other characterizations of future events or circumstances, including any underlying assumptions. The words “anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”, “intend”, “may”, “could”, “plan”, ” possible”, “potential”, “predict”, “project”, “should”, “would” and similar expressions may identify forward-looking statements, but the absence of such words does not mean that a statement is not prospective. Factors that could cause actual results to differ materially from current expectations include, but are not limited to: changes that adversely affect the business in which we engage; our ability to predict trends accurately; our ability to obtain conditional covenant or final loan approval from the Department of Energy; our ability to generate cash, repay debt and incur additional debt; our ability to develop efficient manufacturing processes at scale and accurately predict associated costs and efficiencies; fluctuations in our revenues and results of operations; competition from existing or new competitors; the non-conversion of the firm order backlog into sales; risks associated with security breaches in our computer systems; risks relating to legal proceedings or claims; risks associated with changes in federal, state or local laws; risks associated with potential regulatory compliance costs; risks associated with changes in US trade policies; risks resulting from the impact of global pandemics, including the novel coronavirus, Covid-19; and risks related to adverse changes in general economic conditions. The forward-looking statements contained in this press release are also subject to additional risks, uncertainties and factors, including those described in greater detail in Eos’ latest filings with the Securities and Exchange Commission, including Eos’ latest annual report. ‘Eos on Form 10-K. and subsequent reports on Forms 10-Q and 8-K. Further information about potential risks that could affect actual results will be included in subsequent periodic and current reports and other filings by Eos with the Securities and Exchange Commission from time to time. In addition, Eos operates in a highly competitive and rapidly changing environment, and new risks and uncertainties may emerge that could impact the forward-looking statements contained in this press release. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to place undue reliance on forward-looking statements and, except as required by law, Eos undertakes no obligation and does not intend to update or revise such forward-looking statements, whether whether as a result of new information, future events, or otherwise.