Plug Power to Leverage New Federal Incentives for Clean Hydrogen Production
Plug Power Inc. (NASDAQ: PLUG), a global leader in hydrogen solutions for the green hydrogen economy, began commercial operations of its electrolytic hydrogen facility in Woodbine, Georgia, earlier this year. The company plans to leverage the benefits of the Inflation Reduction Act’s (IRA) Section 45V Credit for the Production of Clean Hydrogen (PTC) in its upcoming financial reports. Plug will be one of the first U.S. producers of clean hydrogen to utilize this new incentive, which was enacted by Congress and signed by President Biden.
The PTC offers a production credit of up to $3.00 per kilogram for clean hydrogen produced in the U.S., significantly reducing the cost of hydrogen production. This incentive helps newer, cleaner technologies, such as electrolytic hydrogen (produced from water), become more competitive with traditional fossil fuel technologies. The passage of the IRA underscores the U.S. government’s commitment to clean hydrogen as a key component in decarbonizing hard-to-abate industries, combating global climate change, enhancing U.S. energy security, and fostering a domestic clean energy manufacturing economy.
For Plug Power, this benefit will meaningfully reduce fuel costs in its operations and sales to customers, a key factor enabling the company to achieve a break-even fuel margin by year-end and project positive fuel margins in 2025 and beyond. According to Plug CEO Andy Marsh, government support for clean hydrogen is crucial for meeting global decarbonization goals. By leveraging these incentives, Plug aims to scale its hydrogen production and drive industry-wide technological advancements, which are essential for a sustainable future.
Plug’s 15 ton-per-day (TPD) facility in Georgia, the largest electrolytic liquid hydrogen production plant and the largest PEM electrolyzer in the U.S., marks a significant milestone in Plug’s development of a vertically integrated hydrogen ecosystem. The company is also expanding with a 10 TPD plant in Tennessee and a 15 TPD liquid hydrogen facility in Louisiana, scheduled to be operational by the end of 2024. Additionally, Plug has plans for further plant developments across the U.S. and is actively working with strategic suppliers to expand its green hydrogen network and achieve cost-effective green hydrogen production at scale.