Plug Power's Stock Rises on Anticipation of Tax Credit Guidance for Hydrogen Production
Key Ideas
- Plug Power stock increases by 9.9% as the U.S. Treasury Department prepares to issue new guidance on tax credits for hydrogen production under the 2022 Inflation Reduction Act.
- New rules will determine if companies like Plug Power can claim tax credits for using nuclear power to produce hydrogen gas, potentially ranging from $0.60 to $3 per kilogram of liquid hydrogen.
- Investors are taking a risk by betting on the favorable decision from the Treasury Department, as it could significantly impact Plug Power's profitability.
- Despite the rise in Plug Power stock, analysts from The Motley Fool Stock Advisor did not include it among the top 10 stocks to buy, recommending other options for potential high returns.
On the first day of stock market trading in 2025, Plug Power's stock saw a positive start by rising 9.9%. This increase was driven by the anticipation surrounding the upcoming guidance from the U.S. Treasury Department on tax credits for hydrogen production under the 2022 Inflation Reduction Act (IRA). The new rules are expected to provide clarity on whether companies, including Plug Power, can receive tax credits for using nuclear power to produce hydrogen gas. Currently, tax credits are available for renewable energy sources; the new rules will extend this to include nuclear power.
The guidance may offer companies like Plug Power tax credits ranging from $0.60 to $3 per kilogram of liquid hydrogen produced using nuclear energy, aiming to make hydrogen production economically viable. However, the final decision on the credit amount is pending. This decision is crucial for Plug Power, as it could impact their future investments and profitability.
Investors are taking a gamble by investing in Plug Power stock, hoping for a favorable decision from the Treasury Department. The outcome will significantly affect Plug Power's financial performance. Interestingly, despite the stock's positive momentum, The Motley Fool Stock Advisor did not recommend Plug Power as one of the top 10 stocks to invest in. They highlighted other potential options for substantial returns, cautioning investors to consider various factors before making investment decisions.