Inflation Reduction Act (IRA)

As energy storage demand continues to increase in the U.S., the Inflation Reduction Act (IRA) of 2022 continue to enable developers and investors to leverage federal tax credits in the battery energy storage sector. Therefore, the energy storage projects remain a tax-advantaged asset class. Under Section 48 of the new tax code, standalone battery energy storage projects retain minimum a full 30% ITC through 2033. Projects will continue to qualify for up to 50% in tax credits, inclusive of an additional 10% for projects built with domestically produced components, and an additional 10% bonus for projects located in energy communities. As such, this solidifies energy storage as a reliable investment. As outlined in the IRA under Transferability, we anticipate selling the credits generated from our projects, thereby creating a new revenue stream that can further fund and accelerate our initiatives in sustainable energy solutions. This development is instrumental in driving investment into this important sector today while aligning with broader environmental goals.

Benefits of ITC

Upon achieving Commercial Operation Date (COD), any renewable energy project in our portfolio can take advantage of the Investment Tax Credit (ITC). This provision allows us, as project owners, to deduct a specified percentage of our investment from federal taxes. Recent legislation has enabled this percentage to reach up to 50%, contingent on certain project criteria. By leveraging the ITC, Bimergen stands to enhance our initial cash flow considerably. The prospect of realizing tax savings soon after COD can positively impact the overall financial performance of each project, allowing us to reinvest this capital into operations, maintenance, or further developments.

When a seasoned project developer like Bimergen is able to secure a significant Investment Tax Credit (ITC), it becomes increasingly attractive to our investors. These tax credits can boost the return on investment (ROI) while reducing the effective tax burden for entities that generate taxable income. This increased appeal often results in better financing conditions from tax equity investors or lenders.

By potentially accessing immediate tax credits, Bimergen can capitalize on this cash flow advantage to negotiate more favorable financing terms. Lenders are likely to present improved offers, recognizing that the project is reinforced by considerable federal tax incentives.

The cash flow produced by the ITC can assist in covering operational expenses during the initial phases of our project when revenue might be limited. This support enhances the project's viability and facilitates a smoother transition through the essential ramp-up period.

Up to 50% ITC

Bimergen is eligible for up to 50% federal Investment Tax Credit (ITC) in accordance with the Inflation Reduction Act (IRA) of 2022. This qualification is based on our compliance with established guidelines that pertain to renewable energy projects, including eligible technologies, planning for construction start dates, labor mandates, domestic content requirements, electrification, and energy storage capacity.

Transferability

The transferability of the Investment Tax Credit (ITC) enables Bimergen to pass its qualified tax credits to other organizations that may lack taxable income and, as a result, cannot fully benefit from the credits. By leveraging ITC transferability, Bimergen can improve the feasibility and appeal of our projects, facilitating funding opportunities and advancing our renewable energy initiatives.