U.S. Plug Power, which began commercial operation of its electrolytic hydrogen facility in Woodbine, Georgia, earlier in 2024, intends to recognize the benefits of the Inflation Reduction Act’s (IRA) Section 45V Credit for the Production of Clean Hydrogen (PTC) in its forthcoming quarterly financial reports.
Plug claimed the company will be one of the first producers of clean hydrogen in the U.S. that anticipates utilizing this new incentive.
The PTC offers a production credit of up to $3.00 per kilogram for clean hydrogen produced in the U.S., providing a financial incentive for hydrogen production in the U.S. According to Plug, this incentive allows newer, cleaner technologies, such as electrolytic hydrogen, which is produced from water, to be more cost competitive with fossil fuel technologies.
Plug said that in the case of its fuel operations and sales of fuel to customers, this benefit will provide a meaningful reduction in the company’s fuel costs.
“This benefit is one of the key factors that will enable Plug to drive overall fuel margin to a break even run rate by end of the year and positions Plug for growing positive fuel margins in 2025 and beyond,” the company added.
Plug’s CEO Andy Marsh commented: “Government support for clean hydrogen is critical to achieving global mid-century decarbonization goals. 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.”
To note, Plug’s 15-ton-per-day (TPD) Georgia facility is said to be the largest electrolytic liquid hydrogen production plant and largest PEM electrolyzer in the U.S.
The company’s other facilities include a 10 TPD plant in Tennessee and a 15 TPD liquid hydrogen facility in Louisiana, scheduled to be operational by the end of 2024.
Plug also has a pipeline of future plant developments across the U.S. and is engaged with suppliers to facilitate the expansion of its green hydrogen network and to achieve cost-effectiveness in green hydrogen production at scale.
Plug revealed the company intends to fully pursue and utilize the Section 45V framework as it continues to develop, construct and operate hydrogen generation facilities across the U.S.
In May 2024, Plug Power received a conditional commitment for an up to $1.66 billion loan guarantee from the U.S. Department of Energy’s (DOE) Loan Programs Office (LPO) to finance the development, construction and ownership of up to six green hydrogen production facilities.
The facilities will be built across the nation and supply “major” companies, Plug said, adding that the hydrogen generated will be used in applications in the material handling, transportation and industrial sectors.