What changed in NeoVolta Inc.'s 10-K — 2023 vs 2024

With a secure supply chain backed by tax incentives, this number is expected to rise as both the commercial and residential markets continue to grow.

The impact of the Inflation Reduction Act (see, “ Market Drivers – Regulation ”) on just residential solar panel installation is expected to grow at a compound annual growth rate of 14.4% from 2024 to 2030. Most solar installers in the US are very small, independently owned operators and are generally not serviced by the larger companies.

The rate of attachment, or number of PV systems installed with storage, is growing considerably. According to Wood Mackenzie, by 2025, nearly 29% of all behind-the-meter solar systems will be paired with storage, compared to under 11% in 2021.

According to a December 2023 report from Berkeley Lab, there are over 3.4 million solar systems installed in the US with only a relatively small percentage of those having energy storage installed. This marketplace scenario presents small installer customers almost 3 million households to revisit for a storage retrofit especially when their 10-15 year old inverter experiences end of life.

Market Drivers Regulatory . At the federal level, the most significant recent regulatory development regarding ESS has been, by far, the passage of the Inflation Reduction Act (“IRA”) in August 2022.

Due to its extensive investment-related incentives, the IRA is expected to have a wide-ranging impact on both public and private investment in the clean energy space in the US, on a long-term basis.

Additionally, there have been a rapidly expanding number of mandates at the state and local level that have also been directed toward the solar industry in recent years. On the incentive side, the IRA has increased the federal Investment Tax Credit, or ITC, from 26% to 30% for qualifying investments, including energy storage.

For a typical ESS, the ITC can reduce the cost of the system by $4,500 to $6,000. In certain instances, the incentives of the ITC can be potentially increased up to as much as 60% of the qualifying project cost.

Finally, the IRA also expands the federal Production Tax Credit, which was first enacted in 2007, primarily for the benefit of the wind industry, to the solar power industry.

For example, some utilities are now also offering incentives to home and business owners who install storage. To date, most of these utility-specific storage incentives are in the Northeast.

NEM3 reduces the amount of NEM credit for each kilowatt (KW) of solar power sent to the utility from a rate of approximately $0.20 per KW to $0.09 per KW (each Utility varies). NEM3 effectively increases the average solar Return of Investment (ROI) from 5-6 years to 10-12 years (each Utility varies).

Effectively, the Company believes that solar installation in California currently makes little financial sense without also including a battery system. Installing NeoVolta nets a ROI of 4-6 years. We estimate that NEM3 reduced our sales from the enactment date in December 2022 continuing through our last fiscal quarter, as solar installers worked off their permitted NEM2 installs.

For example, Hawaii’s attachment rate rose to 80% after the state began transitioning away from net energy metering (NEM) and reduced compensation for grid exports. Resiliency . Energy dependence has been a growing concern in the last few years as weather patterns have become more erratic. New findings from the U.S.

Johnson is a seasoned industry executive who most recently, served as the President of the U.S. subsidiary of Meyer Burger, a major manufacturer of solar cells and solar modules based in Switzerland, for three years. His previous experience includes high level sales positions with both Tesla and General Electric. Under Mr.

Johnson’s direction and leadership, we intend to vigorously pursue three major growth objectives as follows (i) Expanding revenue through strategic sales channel development, (ii) Broadening financing options through partnerships with major industry players, and (iii) Initiating development of the next generation of batteries. In furtherance of these key growth objectives , Mr.

Johnson has recently undertaken the following significant tactical initiatives: · National Sales Team Formation : NeoVolta has successfully assembled a national sales team targeting key renewable energy distribution centers, ensuring a robust presence across the U.S. · Strategic Collaborations Initiated : We have begun collaborations with leading solar installers in California, Nevada, and Florida, positioning ourselves to attempt to capture a larger market share. · Advanced Conversations for Next-Gen Systems : We have initiated discussions with entities to develop the next generation of NeoVolta’s energy storage systems, setting the stage for future innovation.

Additionally, we are planning to adopt a number of other near-term strategic moves that are designed to rapidly increase the growth of our product sales. For example, NeoVolta is actively expanding into high-potential regions such as Hawaii, Texas, Florida, and Puerto Rico, with regionally based sales teams to maximize reach and service.