Company: NEOV
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001683168-25-007304
Chunk: 2

Company: NeoVolta Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 1
Chunk 2
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 homes equipped with solar panels, and more than 3 million of these do not currently have battery
storage. (SolarInsure) This represents a significant retrofit opportunity, particularly as installed inverters approach end of life after
10–15 years of operation. Grid reliability concerns, increasingly common utility outages, and changing rate structures are expected
to accelerate adoption of storage among this installed base.

New Residential and Small
Commercial Installations. The U.S. installer market is highly fragmented, with more than 11,000 companies nationwide, most of them
small independent operators not typically serviced by larger ESS providers. These smaller installers represent NeoVolta’s core customers.
Once certified, they generally become recurring purchasers, relying on just-in-time availability to serve homeowners who prefer not to
stock or pre-finance equipment.

Battery adoption in new solar
projects is rising rapidly. Nationally, only about 6% of residential solar systems included storage in 2020, compared to an estimated
15–20% by 2024. (Clean Energy Group) In California, adoption has been even stronger: under the new net-billing tariff, roughly 60%
of new residential systems are now being paired with storage, compared to 10–14% under prior net-metering rules. (Utility Dive)
Nationally, the residential storage market is scaling quickly—Wood Mackenzie reports ~458 MW added in Q1 2025 alone, the strongest
first quarter on record. (Wood Mackenzie)

Commercial and Industrial
Expansion. Beyond residential applications, the market for C&I storage is emerging as a new growth segment. Businesses are increasingly
seeking solutions for demand-charge management, backup power, and grid services. To address this demand, we recently announced a 250 kW
/ 430 kWh C&I battery energy storage system, positioning NeoVolta to participate directly in this next stage of adoption.

Financing and Distribution.
The importance of financing structures has grown significantly across all customer segments. As system costs increase and federal incentives
such as the Investment Tax Credit (“ITC”) phase down under the One Big Beautiful Bill Act (scheduled to sunset by December
31, 2025), adoption is expected to depend increasingly on third-party ownership, leasing, and loan-based models. These financing options
reduce upfront costs and align payments with monthly utility savings, broadening access to storage. At the same time, NeoVolta is evolving
its channel strategy: while we initially sold primarily to independent installers, we