Plug Power Inc. dubbed the new U.S. rules on how hydrogen projects can qualify for a lucrative tax credit "disappointing," but also expects restrictions around a key measure of President Joe Biden's signature climate law to get looser once they are finalized by the Treasury Department.
"We do expect the regulations to loosen up," Andy Marsh, president and chief executive officer of the Latham, New York-based hydrogen producer, said in an interview on Bloomberg Television. "I've talked to many senators who tell me it will get easier — not harder."
Under the draft proposal
In order to qualify for the tax credit worth as much as $3 per kilogram, hydrogen projects would need to use electricity from newly built clean energy sources and, starting in 2028, ensure that production occurs during the same hours as those clean sources were operating. The Biden administration is taking public comment on the
It remains to be seen if Plug Power's hydrogen plant that's under development in Georgia will qualify for any of the tax credit, let alone the maximum amount, Citigroup Inc. analyst Vikram Bagri wrote in a research note Friday following Treasury's publication of the rules. The hourly-matching requirement dealt Plug a "weak hand" that provided "narrow pathways" for its Georgia plant, the note said.
Marsh, in his interview, said the company's modeling showed the regulations as written would reduce U.S. hydrogen output 70% by 2030. Plug and other hydrogen producers are planning an aggressive effort to "help straighten the regulations out," he said.
"We are confident there will be changes once there is a comment period for the regulation," Marsh said.
