ESS Tech, Inc. (NYSE:GWH) Q4 2022 Earnings Call Transcript

And that clock started on one of this year. So, the funny thing that we’ve that we build our ship, even if we built it before, but if we ship it, and that transaction takes place, after the first of the year should count towards the production tax credit, I don’t believe there will be any direct lines to GAAP accounting rules. I think that’s a very different category. But I think you won’t have to prove that you sold it to a third-party.

Eric Dresselhuys: that we have factored into our cash burn some benefit of that. So, anything that we could realize this year would be a net positive for us.

Chris Kapsch: So, upside to the cadence that you it’s sort of communicated in terms of the cash burn sounds like, okay, that’s the great thing. If I had that, right, and the other follow-up I had was on the benefits from the IRA with respect to the commercial momentum behind this market’s development. And just curious, I know, you’re, I understand you’re not really comfortable or in a position to provide guidance, given all the dynamics. But can you just talk about the nature of the engagement with customers and how that’s manifested in either discussions or backlog or funnel anyway that quantify that or characterize that sort of market development, if you will, from a engagement with potential customers?

Eric Dresselhuys: Sour So, the way I guess I would describe it is and I would certainly hope that everybody would appreciate that nothing about providing guidance at this point in any way, shape, or form is a diminishment of our enthusiasm, excitement about how the market is growing, because it really has been a fantastic ramp up in the interest across the board. And I should add, because I don’t think we said anything. In the prepared remarks, you may have seen that Australia has announced an IRA like incentive program, and there has been progress made in the last, 35, 40 days in Europe, to have a similar incentive program. I think it’ll look different in the details. But directionally is the same in Europe. So, there is a ton of tailwinds coming in to build market momentum around that.

We haven’t dimensionalized a total pipeline kind of impact. Because it frankly, those in the numbers kind of get crazy big and I’m more for $0.02 focused on the things that are more progressed through the sales process. What I can tell you for sure is that with IRs, and the investment tax credit, you’re now opening up new use cases that before people might not have thought to be cost effective. And the one that I mentioned earlier, I think is really worth calling out. We were at a conference last week where or two weeks ago, excuse me, we’re where CAISO, the operator of the California grid hosted a panel on using batteries, as a deferral for TMD investment. And utilities are now looking at energy storage, which could go into their rate base at a very favorable set of terms because of the investment tax credit, as a deferral towards TMD investments on their side.

Those were conversations that we just weren’t having a year ago, before, before the IRA came onto the scene. So, it’s not maybe orders of magnitude of growth, but it’s multiples of growth in terms of the interest in the use cases. And we just have to keep moving through the process to continue to move those to the sales funnel and ultimately move them to deal.

Chris Kapsch: You mentioned the revenue recognition in calendar ’23 for what’s going to shift. Is that a prelude to emerging from development accounting, or am I to completing two different considerations? Thanks.