Despite an enticing tax incentive aimed at boosting clean hydrogen production, PLUG stock appears lackluster, sliding approximately 4% today. To capitalize on the benefits of the Inflation Reduction Act (IRA), Plug Power is set to explore tax advantages associated with Section 45V Credit for the Production of Clean Hydrogen (PTC) in its upcoming financial reports.
Embracing Clean Energy Revolution
Plug Power is positioned as one of the early adopters in the U.S. aiming to tap into the new Biden administration tax incentive. Section 45V provides producers with a credit of up to $3 per kilogram of clean hydrogen manufactured domestically. This potentially lucrative incentive could pivot Plug towards cleaner energy technologies like electrolytic hydrogen, presenting a more cost-competitive alternative to traditional fossil fuels.
Plug’s Chief Executive Andy Marsh emphasized the crucial role of government support in driving global decarbonization ambitions. Leveraging these incentives could propel hydrogen production capacity growth, fostering industry-wide technological enhancements. The utilization of PTC is envisaged to spur innovation and investments in clean hydrogen solutions, imperative for a sustainable future.
The Georgia facility of Plug Power currently churns out 15 tons of hydrogen daily, making it the largest plant for electrolytic liquid hydrogen and PEM electrolyzer in the United States.
Struggles Amidst Bearish Sentiment
Despite today’s optimistic outlook, PLUG stock grapples with bearish trends, witnessing a near 50% decline year-to-date. Nevertheless, Plug remains resolute in its endeavors, actively expanding a 10-ton-per-day hydrogen plant in Tennessee and a 15-ton-per-day liquid hydrogen plant in Louisiana slated for operationalization by year-end.
Amidst expansion efforts, incentives like those under the Section 45V framework grant companies like Plug the financial flexibility to sustain the growth of clean energy infrastructure.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.