Shares of hydrogen producer and fuel cell maker Plug Power (NASDAQ: PLUG) soared 22.2% Monday, as of 1:45 p.m. ET. That extended Friday's gain that came after the U.S. Department of the Treasury released final rules for the clean hydrogen production tax credit established by the Inflation Reduction Act (IRA).
Plug shares are rallying on the news, as these rules seem to offer flexibility that could especially benefit Plug Power with its diverse hydrogen business. Plug shares have now surged 41.5% in the first days of 2025.
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Making clean hydrogen competitive
Officials released the final rules after receiving feedback from industry players. The new rules give green hydrogen producers a more competitive way to keep their hydrogen projects moving forward.
The added flexibilities are also meant to give companies more clarity for continued investments to drive the production and use of clean hydrogen. The new rules differ from the originally proposed rules by expanding the definition of new clean power used to generate hydrogen. The purpose is to ensure that electricity consumption for hydrogen production meets lifecycle emissions standards while still offering tax credits where practical.
Plug Power could benefit, as it has several hydrogen production facilities across the U.S., including a plant in Georgia that opened last year. The tax credits make its hydrogen more competitive. But the company continues to lose money, and investors have shunned the stock due to fears surrounding its ability to apply for tax credits that would provide much-needed financial benefits.
So is Plug Power a buy?
Plug Power shares have dropped about 25% in the last year, even after the recent surge higher. Investors should realize that while this is the news that Plug Power wanted regarding IRA tax benefits, it remains unclear what, if anything, the incoming administration might change moving forward. For that reason, it may still be best to steer clear of Plug Power stock and wait for more certainty in the coming year.
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