RFI Q3 2024 Cc, post 9:
Another question from a different shareholder. In light of Tuesday's election results, can you indicate whether a repeal of the Dynamic Glass Act would significantly reduce SPD's chances of architectural success or has the film cost decreased enough to minimize the possible impact?
Well, let me first say it's always better to have Smartwind does receive a 30% to 50% investment tax credit like they do now. And I also don't know whether the entire inflation reduction act may be repealed, whether it will be left in place or maybe just some of the pork barrel or other provisions will be repealed.
As a former Federal Reserve economist, I've always refused to call the legislation the inflation reduction act because many of the provisions have the opposite effect. And so I appreciate in the question the fact that you refer to it as the Dynamic Glass Act or as Gauzy referred to in the Benzinga interview that came out yesterday, sometimes we call this the Gauzy Act .And it's important to keep the Dynamic Glass Act separate and distinct from the overall Inflation Reduction Act.
And also our area of the Dynamic Glass Act is similar to the incentives for other established energy efficient home and office products like energy efficient windows, water heaters, etcetera. So hopefully that part will survive and they won't throw the baby out with the bathwater.
And you'll see this discussed more if you listen to the Benzinga All Access interview. So the bottom line is that while tax incentives are very helpful, our costs have come down naturally because unlike our current and former competitors, there are demonstrable economies of scale that exist with our SPD Smart technology that have now allowed us to take on mid market and not just premium market for SPD Windows.
And there's one other thing I want to add here. So the cost of the film, the cost of the lamination, the reliability of the product proven over tens of thousands of installations, have all worked very hard to bring the cost down of the basic materials. And there's one other thing which is the delivery system.
So if you think about how a window is installed in a building, there's a lot of cost of ownership. I'll mention a few. Number 1, if you're going to put this on an office building in let's say Manhattan, if it was just replacing the glass with new smart glass, you would have to build scaffolding, hire unions to do that and also you'd have to basically take the property out of circulation and disrupt the tenant's operation.
So there's a lot of cost involved with that. This week we also discussed a very specific project and that project talked about a bid by a competitor where the price per square foot of their glass which was extremely highly subsidized was lower than ours.
But when you factored in the fact that their technology, the electrochromic technology is very sensitive to voltage spec fluctuations and can be burnt out, the cost of the controllers brought the per square foot price and the annual cost of just maintaining those controllers well above SPD.
So, even in a subsidized market, we have a cost advantage and we've seen that in current bids. So, a lot of that is just the natural tendency as I mentioned for the cost to come down and the other is the delivery system because if you think about it, it's you're avoiding substantial expenses by not having to do a lot of the things that you would do with an ordinary window.
Cont'd |
