Plug Power (NASDAQ:PLUG) stock is down about 4% today despite promising news that the fuel cell company will attempt to capitalize on some tax benefits of the Inflation Reduction Act (IRA). Indeed, Plug will attempt to receive tax benefits related to the IRA’s Section 45V Credit for the Production of Clean Hydrogen (PTC) in its upcoming quarterly financial reports.
Reasonably so, Plug is poised to be one of the first producers of clean hydrogen in the U.S. that plans to take advantage of this new Biden admin tax incentive.
Section 45V will offer producers a credit of up to $3 per kilogram of clean hydrogen produced in the country. This would grant Plug a meaningful financial incentive for the company to use cleaner energy technologies, like electrolytic hydrogen, as a more cost-competitive methodology compared to fossil fuels.
“Government support for clean hydrogen is critical to achieving global mid-century decarbonization goals,” stated Plug Chief Executive Andy Marsh.
“By leveraging these incentives, we can scale our hydrogen production capabilities and catalyze industry-wide technological advancements. The use of the PTC will drive innovation and investment in clean hydrogen solutions, which are essential for a sustainable future.”
Plug’s Georgia facility produces 15 tons of hydrogen per day, making it the largest electrolytic liquid hydrogen plant and the largest PEM electrolyzer in the U.S.
PLUG Stock Struggles to Shake Bears
Despite the encouraging nature of today’s news, PLUG stock just can’t escape the bears. Indeed, with today’s loss, PLUG is down almost 50% year-to-date.
Not for the lack of trying, however. Plug is currently in the midst of a major expansion of its 10-ton-per-day hydrogen plant in Tennessee, and a 15-ton-per-day liquid hydrogen plant in Louisiana, which should be operational by year end.
As it expands, incentives like those found in the Section 45V framework will give companies like Plug some financial leeway to continue expanding clean energy systems.
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.
