Good afternoon. Thank you for joining Bloom Energy's Q2 2022 Earnings Conference Call. I am Austin, your moderator for today. All lines will be muted during the presentation, and there will be a chance for questions at the end. I will now hand the call over to our host, Ed Vallejo, VP of Investor Relations. Ed, please go ahead.

Thank you, and good afternoon everybody. Thank you for joining us for Bloom Energy’s second quarter 2022 earnings call. To supplement this conference call, we furnished our second quarter 2022 earnings press release with the SEC on Form 8-K and have posted it along with supplemental financial information that we will reference throughout this call to our Investor Relations website. Our second quarter 2022 10-Q is also in the process of being submitted today as we speak. During this conference call, both in our prepared remarks and in answers to your questions, we may make forward-looking statements that represent our expectations regarding future events and our future financial performance. These include statements about the company’s business results, products, new markets, strategy, financial position, liquidity, and full-year outlook for 2022. These statements are predictions based upon our expectations, estimates, and assumptions. However, as these statements deal with future events, they are subject to numerous known and unknown risks and uncertainties as discussed in detail in our documents filed with the SEC, including our most recently filed Forms 10-Q and 10-K. We assume no obligation to revise any forward-looking statements made on today’s call. During this call and in our second quarter 2022 earnings press release, we refer to GAAP and non-GAAP financial measures. The non-GAAP financial measures are not prepared in accordance with US Generally Accepted Accounting Principles and are in addition to and not a substitute for or superior to measures of financial performance prepared in accordance with GAAP. A reconciliation between the GAAP and non-GAAP financial measures is included in our second quarter 2022 earnings press release available on our Investor Relations website. Joining me on the call today are K.R. Sridhar, Founder, Chairman, and Chief Executive Officer; and Greg Cameron, our Chief Financial Officer. K.R. will begin with an overview of our business, then Greg will review the operating and financial highlights of the quarter. And after our prepared remarks, we will have time to take your questions. I will now turn the call over to K.R.

Hello, everyone. Good day to you. We were delighted to have so many of you join us in-person and through streaming on our Investor Day in May. We were thrilled when we heard back from you on how much you appreciated seeing our innovative technology development, manufacturing excellence, and most importantly, interacting with and experiencing the caliber of our team. We know you left with a better understanding of the power of our platform, its flexibility to rapidly adapt, elect, and deploy so many different energy solutions. In this ever-changing energy marketplace and policy environment, the flexibility of our platform is a unique advantage that sets Bloom Energy apart in the energy industry. This diversity and flexibility of our platform is exactly why we are so excited about the Inflation Reduction Act. This act will enable us to play a pivotal role in accelerating the mission to decarbonize the world. Unlike many other energy companies, there are many facets of the act's provisions, where we will be able to participate in a material manner. Let me highlight nine key provisions. One, the hydrogen production credit and a direct pay option for it will greatly accelerate our domestic electrolyzer business. Two, the greater availability of clean hydrogen will create greater demand for Bloom’s always-on high-efficiency hydrogen-powered energy servers. Three, our growing waste-to-energy segment will get a big lift from the expanded ITC for biogas equipment. Four, the incentive for electric vehicles and their growth will drive demand for our efficient on-site power charging solution. Five, the tax credits for controllers, switchgear, and batteries will drive microgrid adoption. Six, the lowering of capture thresholds and the increased credit makes carbon capture with our energy servers very attractive. Seven, the capital equipment in our expanding American factories are eligible for the manufacturing Tax credit. Eight, the increase and extension of the ITC for our energy servers will strengthen our domestic power business. Nine, the direct pay and transferability features will create greater supply of affordable financing for our US projects. As a company whose technology was invented in America, whose products are manufactured in America, by American workers, we are thrilled that the Act acknowledges the importance of domestic content through additional bonus features. So you can see I'm so glad that we designed a flexible platform that has so many ways to help the world decarbonize. And now we have a national policy that will support us. Speaking of the flexible platform, I'm excited to share news on our hydrogen electrolyzer. It is not only great news on its own, but also an illustration of the platform flexibility point I just made. Our pilot demonstration at the US Department of Energy's Idaho National Laboratory is performing at a greater electrical efficiency than any other commercial product or technology demonstration in the world that we know of, operating at 37.7 kilowatt hours of direct electricity to produce 1 kilogram of hydrogen. It is setting a world record. Yes, a world record. The performance of the Bloom electrolyzer is over 30% better than most commercial low-temperature electrolyzers in operation today. And we are just getting started. It is evident to me that the early markets for hydrogen are going to be, one, hard to decarbonize industries like steel, chemicals, cement, et cetera that produce waste heat and use on-site hydrogen. And two, nuclear power plants that have curtailed electricity conditions during portions of the day and excess heat available. Our product performance that is verified by the DOE FIDO National Laboratory clearly demonstrates the competitive advantage we have over low-temperature electrolyzers in both these market segments. This competitive advantage is why LSB Industries, the leading North American producer of industrial and agricultural chemicals, announced plans to install a 10-megawatt solid oxide electrolyzer from Bloom Energy at their prior Oklahoma facility. When integrated with high-temperature processes like ammonia synthesis, which produces extra heat energy, Bloom’s electrolyzers will be more efficient than competing electrolyzer technologies, resulting in lower-cost hydrogen for LSB. The clear competitive advantage attainable when combined with nuclear power plants is why Westinghouse Electric Company and Bloom Energy announced signing a Letter of Intent to pursue clean hydrogen production in the commercial nuclear power market. The IML demonstration and announcement today should provide greater market momentum going forward. Let me now switch to our waste-to-power segment. In July, we were recognized by the American Biogas Council for our dairy biogas to electricity project conducted in collaboration with CalBio. The Biogas Council cited the project for breaking new ground in the US biogas industry and across the global energy landscape, being the first to use renewable biogas to make electricity from fuel cells, to power an on-site microgrid and a fleet of electric vehicles. The project also received the 2022 U.S. Dairy Sustainability Award. Our waste-to-energy segment is witnessing solid growth. We are currently developing multiple landfill biogas opportunities, both for the RNG market as well as for electricity generation, and the renewable fuels business continues to gain traction with several key development projects utilizing food and agricultural waste. Let me take a moment to touch on the international opportunity. During our last earnings call in May, we spoke about our interest in entering the European market. In June, we announced the installation of 1 megawatt of Bloom servers at the Ferrari headquarters and manufacturing plant in Maranello, Italy. Ferrari, like Bloom Energy, has a commitment to uniqueness, innovation, technology leadership, and continuous learning that makes them the ideal partner for our entry into the European manufacturing landscape. Bloom Energy's fuel cell platform is a best-in-class solution for a best-in-class luxury automaker. The Bloom Energy servers are expected to cut gas requirements by around 20% from the combined heat and power system currently in use at Ferrari, while also reducing emissions. We are showcasing this as a model for other energy-intensive industries in Europe to emulate, a way for them to achieve greater energy security, lower costs, and a lower carbon footprint, all at the same time and at a time when energy availability, prices, and security in Europe are increasingly of great concern. I'd like to close with the market at home. Digitization, electrification of transportation, and onshoring of manufacturing are all adding significantly to increased electricity demand at unprecedented rates. So demand for new power is at an all-time high. On the supply side, the decades-long underinvestment in both power capacity expansion and T&D, the age and disrepair of the existing infrastructure, drought-related reduction in hydroelectric output, and the loss of capacity from shutting down coal and nuclear power plants are all creating a shortage of supply. This shortage is significantly greater than the pace at which renewables are being added. In this scenario, utilities are not able to provide additional power to large commercial and industrial customers that are demanding more and demanding them more quickly. If you are a company committing millions of dollars to build a new facility, you cannot wait for months and even years for the power company to run power lines and connect you to the grid. Only then to see extreme weather affect your power supply, shutting down your facility for hours, days, and even weeks. This is imaginary. This is a reality that companies face in many parts of the US and in Europe, I might add, whether it's a Bloom Energy server delivered on-site and installed on time or it's a Bloom Energy server power tower in urban settings with very low land needs, our solutions enable customers to solve energy reliability, security, and decarbonization in the manner that best suits their needs with a very quick-to-power option. Before I turn it over to Greg, let me just say that we are very pleased with our financial results this quarter. We are maintaining financial and operating discipline as we invest in the business while focusing on cost margins and driving towards improved profitability and positive cash flow. With that, let me turn this over to Greg for him to elaborate.

Thank you, K.R. I share your sentiments. We had a strong operating quarter. Here are some key highlights from our supplemental financial deck available on our website. We achieved record second quarter revenue of $243 million and improved our non-GAAP gross margins from both the previous quarter and last year. We are on track to increase our manufacturing capacity by an additional 1 gigawatt. Although we are facing a challenging global supply chain, we are reaffirming our 2022 guidance. To provide further context on our second-quarter performance, our value proposition for our 24/7 always-on energy server that delivers resilient, sustainable, and predictable power remains robust. Our ability to quickly supply additional power to client sites and offer pathways to decarbonization continues to appeal to our customers. As K.R. mentioned, the time-to-power aspect is particularly significant for manufacturers and data centers when local utilities cannot provide the additional power they need for growth. These are often larger sites in search of reliable and resilient power. In terms of decarbonization, our customers express a need for real, resilient solutions—specifically, net zero solutions like hydrogen for the future. We anticipate these trends will continue to strengthen, especially with the revival of U.S. manufacturing, the increase in electrification, the ongoing acceleration of the digital economy, and the advantages provided by the Inflation Reduction Act. We are successfully navigating a tough supply chain landscape that impacts both pricing and availability. Despite lingering uncertainty, our team is doing an excellent job ensuring that our factories can produce the servers necessary to meet customer demand. We continue to collaborate with our suppliers to ensure they are investing adequately to support our expected growth, aiming to return to our historical cost reduction targets of 10% to 15% annually once the environment stabilizes. Our non-GAAP gross margins for the second quarter were around 20%, showing an almost 4-point improvement from the first quarter and 1.6 points from last year. While our unit costs are temporarily elevated due to the launch of our new Fremont facility, we've benefited from a better pricing mix in the second quarter. Looking ahead to the second half of the year, we expect unit product costs to decline as capacity increases, allowing us to meet our targeted margins. As I mentioned at our recent investor conference, we executed the sale of a previously consolidated PPA entity this quarter to simplify our business. This transaction eliminated $30.6 million of non-recourse debt, improved our margins for 2022, and streamlined our financial reporting. We recorded a $45 million non-cash asset impairment charge in our electricity segment, which we adjusted out of our non-GAAP reporting. We are committed to investing in manufacturing capacity, research and development, and our commercial resources. In the first half of the year, we allocated working capital to meet future demand and purchased capital equipment to increase capacity. We have sufficient liquidity to sustain these investments. In the second quarter, we began operations at our new Fremont facility and are on track to elevate our fuel stack manufacturing capacity from 280 megawatts to 50 megawatts by year-end and over 1 gigawatt by the end of 2023. We are reaffirming our 2022 guidance for revenue, margins, and cash flows. Given our strong backlog and pipeline, we are confident in delivering at least 240 megawatts of acceptances this year. Based on these acceptances, we anticipate revenue of at least $1.1 billion, and with approximately 24% non-GAAP gross margins, we expect to achieve positive non-GAAP operating margins and positive cash flow from operations. These results, combined with our expansion in manufacturing capacity, should set us on a solid trajectory for revenue and margin growth in 2023 and beyond. Looking to the second half, for the third quarter, I expect our acceptances and revenues to rise at our expected annual growth rate. Our acceptance cadence for the second half will mirror last year, with the most significant acceptances occurring in the fourth quarter. As unit costs improve with more builds, I anticipate our third quarter margins will expand slightly compared to our first half 2022 levels. In summary, we had a strong operational quarter and are gaining momentum as we move into the second half of the year. Like other global industrial companies, we are facing supply chain challenges, but significant tailwinds support our push for abundant, clean, and resilient energy. With a strong backlog, we are well-positioned to meet our 2022 targets and believe the company has reached an inflection point to build on our established technology platform, solid track record, and promising growth roadmap. We are incredibly excited about the future. Now, let’s open the line for questions.

Thank you. Our first question is with Michael Blum from Wells Fargo. Michael, your line is open.

Thank you. Good afternoon everyone. There has been quite a shift since last quarter. The IRA is expected to pass soon. However, natural gas prices remain persistently high. I'm curious if you could discuss whether this has altered any of your views on commercialization strategy in the US, particularly considering that the hydrogen economy in the US is likely to grow more quickly with the new bill.

Michael, this is K.R. Hi, how are you? So that's a very good question. Look, here is what we are seeing in the marketplace today. The supply/demand mismatch in terms of what large commercial industrial needs for the next three to four years, and the difficulty utilities are having in providing that expansion capacity for the next three to five years. That time to power is a really big issue for the companies. And there, it is not the cost of electricity. It is the opportunity cost for a company to not be able to do business if they don't have power, not be able to expand. We think we have a unique microgrid solution offering for people like that. That is a game changer. And in the scheme of things of a company looking at that kind of a scenario, the cost of natural gas should be de minimis to them, the variation in natural gas. So we see that as a huge great business growth opportunity for us. Equally, the $3 PTC, the availability of ITC that can go up to 50% for companies like ours that manufacture in America and do what we do. All that put together, we see that as a huge impetus for hydrogen and look at the results we just put out with INL. This is a game changer in terms of almost 30% better than in electrical efficiency than anybody else can do. You put all that together, we are excited about hydrogen. So for us, it is a genius of act. We will do both.

Great. Thanks for that. I appreciate it. Second question I wanted to ask was just about the revenue breakdown. So clearly, this year, it's been weighted much more towards international versus domestic. So, I wanted to just get your view of how that should trend for the rest of the year, and just more on a long-term basis? And then is there a way we can think about gross margins on US versus international? Are there any real differences there? Thanks.

Yes. So, Michael, it's Greg. For this quarter's results, they are quite similar to last quarter, with about 60% coming from international markets and 30% to 40% from the US. The deviation from historical levels is mainly due to the large order from SK ecoplant this year, which we've prioritized to fulfill under their take-or-pay contracts, considering our capacity constraints. As we move into the second half of the year, particularly in the latter part, we expect our breakdowns to revert to more historical levels for both the US and Korea. Looking ahead, we anticipate continued growth in our international segment, with increased diversity as we expand our presence in Europe. This means a larger share of our revenue will come from the international sector across multiple continents. Regarding gross margins, I can confirm that there isn't a significant difference in where they currently stand. We price to…

Okay. Perfect. Thank you.

Our next question is with Julien Dumoulin-Smith from Bank of America. Julien, your line is open.

Hey, good afternoon, team. Thank you for the time. Appreciate it. Congrats on the results. Maybe just kicking things off, obviously, you're welcome. Just kicking this off on the IRA front, right? You all mentioned it in the remarks, et cetera. I would be curious what kind of additional traction could we see with respect to electrolyzer. Again, you all are very keen to commercialize this product rapidly. Obviously, we're looking for more awards through the course of the year. How does this shift the pace of what you all had contemplated even back in May at this point as you look at this opportunity and perhaps the enhanced economics that may be involved?

Thank you, Julien. It’s Greg. We have created a forecast not only for this year but also for the next decade, considering the Build Back Better plan at that time. We assessed all factors, including the PTC for hydrogen, 45Q for sequestration, ITC, and others, but those were not included in our long-term projections based on the Build Back Better outcomes. What’s likely to be approved soon came from the Senate as part of the Act. The $3 PTC is very appealing to us. We believe it will encourage projects to come online sooner, although we haven’t included it in our hydrogen business growth forecast yet. We will review our forecast as things progress, but I anticipate that this will enhance our outlook for growing hydrogen revenues in the short term.

Right. So still looking at like three this year or something like that?

We're still very much focused this year on winning large-scale demonstration projects, where we can show like we did with INL, the technical advantages that we have with solid oxide electrolyzers.

And also Julien, understand our factory by the end of next year, we'll have a capacity to do 2.5 gigawatts of electrolyzer. So we are building the capacity. We have the supply chain, we have everything. So for us to pivot very quickly to that would be great. How we pivot, how fast we pivot will all be about maximizing margin.

Right, indeed. And in fact, just if you think about like a target by end of the year, can you talk about one gigawatt by end of 2023 or 2.5 by end of 2023, whichever you think about it. Is there a portion, a mix of that that we should be expecting today that you would be allocating to the electrolyzer side of the business, and/or how are you feeling about being able to fill up just the gigawatt overall in terms of orders into that production ramp?

Julien, what’s great about our technology as we build out the capacity, we're indifferent and the capacity is indifferent. So the supply chain, the manufacturing capacity, all that can make natural gas, fuel cells, hydrogen fuel cells, or electrolyzers, and we all run down the same line. So we don't really need to make those commitments to really the current quarter when we think about deliveries.

And also, Julien, one thing that you guys didn't ask important to add is the amount of incentives in the bill when passed for waste to power creates an enormous opportunity in like that area. So for us, the factory is indifferent to what it has to build, and it's all about mix and trying to figure out how to optimize and maximize margin.

Right. Yeah, waste to power indeed is a third angle. Excellent, guys. Well, best of luck, we'll talk to you soon.

All right, Julien we’ll talk soon.

Our next question is with Alex Kania from Wolfe Research. Alex, your line is open.

Hi, thank you for taking my question. I’d like to start by asking about the PTC and its impact on the economics of green hydrogen, particularly regarding solid oxide electrolyzers. How do you view the potential for long-duration energy storage solutions in this context? How competitive do you believe these solutions could ultimately be without relying on renewables for the electric grid?

Alex, that's a very good question. In the long-term, long-duration storage will be very attractive. In the short term, as I mentioned in my prepared remarks, the two markets that I truly believe are going to be the early adopters are hard-to-decarbonize industries that can use that hydrogen to decarbonize and have a source of heat and have renewable electricity coming to them where you don't have the logistics, transportation, liquefaction, pressurization, all that involved is the obvious first place where it will play a big role, and it will have a huge impact on the carbon footprint. That and then the curtailed nuclear power where you're getting, in a way, from a marginal cost basis, that electricity for that nuclear operator is free, right, because during the day, it's being curtailed and to be able to use that in the heat and to produce the hydrogen. So, I truly believe those are the two big immediate opportunities that are going to gravitate to the market. And luckily for us, or by design, we play very well into those two spaces because we are high-temperature electrolyzers that can use that heat. Others that operate at low temperatures cannot.

Thank you. I have a question for Greg. I know you've faced many challenges with tax equity. The changes regarding transferability and direct pay certainly have implications. I'm curious about your thoughts on how the market for PTCs is expected to evolve over time and what that means for the cost of capital, as there are clearly drivers in that area.

Yeah. Listen, I think it's like any market, right? The more supply comes on, it brings increased availability and ultimately brings in better terms and pricing. So having more players come into that space. And I think you'll get it for two reasons, right? One is, you'll have the transferability, but you'll also have some tax levies within the bill that are going to create some additional tax capacity within the market. So I think a lot of these things will bring more players in the space, create more liquidity, and hopefully continue to tighten on pricing, which we've seen here for a bit.

Great. Thank you very much.

Thanks, Alex.

Next question is with Colin Rusch from Oppenheimer. Colin, your line is open.

Great. Thank you so much. This is Kristen on for Colin. Wanted to ask about the opportunities for operating leverage maybe over the next 12 months or with what we've been discussing with the IRA, should we be expecting any growth in organizational capacity in anticipation of some of that revenue growth?

Hey, Kristen, it's Greg. So I think what you've seen kind of this year versus last year is our revenues have been growing nearly at double what our costs have been growing. We've got a target here over the long term that we should be about 15% of our revenue should be spent in operating costs. That includes everything from R&D to the G&A, to run the business. I would expect as our revenues continue to grow at this 25%, 30% level that we've targeted and our costs grow less than that, that we're going to continue to achieve operating leverage. That's why it's so important for us this year to get to that operating income positive point, because once we know we cross over that, all that leverage comes in and we continue to grow our operating income going forward.

Thank you for that. And then sort of a similar line of questioning, but with the initial ramp in the new facility, just any incremental opportunities you may be seeing for additional efficiencies or sort of returning to that cost down ramp that you outlined? Thank you.

Yes, Kristen. We are very focused on getting back to that ramp. Our cost being elevated, even just a couple of hundred dollars a kilowatt is not a position that we are used to being in. We like to focus on a 10% to 15% down. So here's what we're doing. Part of this, just gets better as volumes increase in the second half of the year is tooling comes on. We get the operating leverage through that process. The other thing we're doing is for folks that were able to see the Fremont facility in May, we have a tremendous opportunity to look to increase the productivity of our process by how we locate machines, how we use automation, how we get the most for our folks in order to deliver the products through those lines. So we think we're going to continue to get true operating leverage. Now, we'll get the first line on this year. And obviously, you're seeing it through our financials of going from 280 megawatts to 580 megawatts. Next year, we're going to double that capacity again, but we'll do that over the course of a few lines. So we'll always probably be adding some level of capacity, but we won't be in a process we'll be doubling capacity in each year in perpetuity.

That's super helpful. Thank you so much.

Thanks.

Our next question is with Ben Kallo from Baird. Ben, your line is open.

Hey guys, I'm just wondering have you seen any shift in customer orders or anything like that, just because of the IRA and the customers are responding to that in any way? Thank you.

Yeah. Hey Ben, it's Greg. It's too soon. I think most customers are still processing the situation. I want to emphasize the strong interest we’re seeing in the time to power as businesses aim for growth. These investments should help with that. In the near term, customers are focused on their growth targets over the next three to five years, and that's where we're observing significant customer interest.

Sorry, Ben, this is K.R. There are some adjacencies here that we clearly see as adding to this pressure. For example, the EV market and the incentives that are going to come in the IRA for the EV market is going to suddenly create tremendous demand in congested areas already from an electricity perspective for more electricity demand. And so solutions like ours that deferred T&D investment are going to be preferable to adding that distribution. So we can see from a directionality perspective, why all these provisions in the bill are going to help create greater demand for us. But as Greg said, it's too early for us to see anything tangible come out while the bill is still not cleared at the house and gotten into a bill.

Thank you. I know you mentioned Europe earlier this year. Is it still a viable market for selling natural gas, or is it not a concern since there are definitely more opportunities available?

Yes. No, Europe is very interesting to us. We are really excited about the Ferrari deal last quarter and having those units on the ground there for a megawatt to start, and there's much more opportunity there. I'd say Europe remains a very interesting place. Italy, given that we have the units there is creating a lot of buzz and interest. Germany, especially around data centers, time to power is a very interesting market for us. In the UK time to power as well as it's got some of the kind of traditional aspects of a US C&I market as far as helping people with resiliency is important there. So we're finding that our value proposition is gaining a lot of traction in Europe, and we're really excited to see that grow.

Our next question is with Graham Price from Raymond James. Graham, your line is open.

Okay. Thanks for taking the question. I guess first one, a quick modeling question. I saw that R&D expense understandably bumped up with all the expansion activity. I was just wondering, how to think about the run rate for that going forward?

Hey Graham, it's Greg. If you're looking at the expenses, including stock-based compensation, there were some retirements that happened early in the year which are slightly inflating that figure. However, if you consider the expenses excluding stock-based compensation, which is how we typically analyze it, they increased slightly over the quarter. We are definitely making significant investments in that area. From a modeling perspective, there was an unusual situation in the second quarter compared to the first.

Okay. Got it. Thanks. That's helpful. And then just one more on the IRA. I guess, in view of the new $3 PTC, I was just wondering if you would be interested in owning and operating hydrogen farms. I know that wasn't a focus area to this point, but would that change at all with this new bill?

Look, we all have to believe that the PTC and everything that's happened is going to make this market grow enormously into a very big size over time. This is such a huge market to vertically integrate and try to do things that people already know how to do on the front end and back end does not make any sense for us whatsoever, from a Bloom perspective. We are going to be stay focused on giving people the shovels and the jeans during this rush which they need. Different people may or may not find gold, but we will sell those jeans to everybody that's going to try to find gold.

Thanks, Graham.

Got it. That's very clear.

Our final question will be with Josh Park from Tuohy Brothers. Josh, your line is open.

It's Noel. Good afternoon.

Hey, Noel.

Hi. I have a couple of questions. I was wondering about the IRA and what the potential positive ripple effects could be on your service business. I'm also curious if you have any insights on how the act might accelerate the commercialization of biogas and how that could benefit those considering a Bloom solution.

Yes. So, if you look at the biogas, right, let's just take that. Just look at the number of incentives that are in place for starters. The biogas plant itself, the digester, the cleanup skid that comes with the biomethane, they are all now eligible for ITC. If these waste-to-power projects are located in certain disadvantaged communities, there's a 10% bonus in addition to that. There is about $10 billion allocated for rural electrification projects through the USDA, where the very end of transmission distribution, which does not have reliability, if you can put a microgrid there is separate grants for that. On top of that, our equipment that goes in is going to get the ITC. You put all this together; waste has become gold. And so, this is going to be a huge area for us to tie into. We are super excited about that. And the one thing that maybe you're thinking as a follow-up, and I may be taking the question away from you as carbon capture, right?

Right.

That $85 carbon credit is set to apply for each ton, and an important aspect of the legislation is that subsidies are now available at a capacity of 5 megawatts instead of the previous threshold of 200 megawatts. This means we can transition from abundant natural gas to zero carbon electricity at a cost lower than the grid price, thanks to 45Q, once methods for CO2 sequestration are established in various locations. We anticipate significant growth in this area over the next few years because our technology is ready. We just need experts who can inject CO2 underground, which should be manageable.

Right. Absolutely, absolutely. And I guess, sort of a similar line. Just curious, can you talk about on the RSG front, whether your transaction was, EQT has brought any similarly interested parties to the table or if you're just seeing more going on with initially similar deals?

For our customers, particularly those in the commercial and industrial sector in the US, when we discuss future-proofing and supporting their decarbonization goals in a careful manner, the RSG becomes a crucial starting point. It's an immediate action they can take that benefits both themselves and the environment while meeting their ESG requirements. We find this very appealing to our commercial and industrial customers during our conversations with them. Well, thank you all for attending the call here. So let me summarize. First and foremost, what you heard from us today is we are performing in a very difficult market, in a very difficult macro condition in terms of supply chain, labor, and everything that everybody faces, but you can see from the results we are executing, we're doing well. And I'm very proud of the Bloom team that is dedicated, passionate, and delivering great results for us. That's the first thing. The IRA is truly wind at our backs. It's unlike most energy companies, and it's going to help us in so many different ways that we talk to even through the Q&A. And the good news for us is our platform technology allows us to just pivot to whatever markets at whatever point in time that will provide us the best optionality in terms of growth and margin. So we will not only look for margin, but we will look for margin in places that have tremendous growth opportunity. This is how we are going to make the decisions, and we have built a company and a leadership team that can be nimble, that is savvy, and can execute to the level of flexibility that our platform actually offers. So I'm super excited about what the future holds for us. And I think we are off to a different chapter when it comes to decarbonizing the planet post the IRA here in the US. And I don't want to not mention similar dynamics are happening in Europe. In Asia, we're already growing. You put all that together, we are building a global company, whose mission is to decarbonize the planet. Thank you for joining us.

That concludes today's call. Thank you for your participation. You may now disconnect your lines.