Proposed Treasury rules negative for Plug Power, says Wells Fargo

Wells Fargo says the Treasury Department’s proposed 45V clean hydrogen production tax credit rules are a negative for Plug Power. The firm notes the rules aren’t finalized and come with a 60-day comment period. The hourly time matching component ensures that only renewable power is used to produce green Hydrogen and the developer doesn’t use more carbon intensive sources, the analyst tells investors in a research note. Wells believes hourly matching would significantly increase the cost of green hydrogen production. It says uncertainty around what qualifies for the tax credit makes project financing for Plug Power’s projects challenging. However, the company sounds optimistic that Department of Energy funding could come soon and be in excess of $1B, notes Wells. The firm keeps an Equal Weight rating on the shares with a $4 price target.