Plug in the powerr (SOCKET) announced on Tuesday that it had received a $1.66 billion loan from the U.S. Department of Energy (DOE) to develop and build up to six green hydrogen production facilities. Plug Power’s stock jumped on the news.
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The loan from the U.S. Department of Energy comes as Plug Power has depleted its liquidity in recent months. That led the company to announce plans in January to sell up to $1 billion in stock.
In November 2023, Plug Power said it was evaluating debt financing solutions to support growth and was working toward a conditional commitment from the Department of Energy to finance factories in its green hydrogen network.
“The loan guarantee will prove instrumental in growing and expanding not only Plug’s network of green hydrogen plants, but also the clean hydrogen industry in the United States,” the CEO of Plug said Tuesday. Plug Power, Andy Marsh, in a press release.
Plug Power stock rose more than 40% intraday during trade Tuesday. PLUG shares rose 25% to 3.61, while other new energy stocks Fuel cell energy (FCEL) jumped 32%.
Meanwhile, solar energy stocks have also surged.
Sunnova Energy (NOVA) jumped 24% to 5.20. In the meantime, Sun (RUN) jumped 7% to 12.32 and SolarEdge Technologies (SEDG) gained 2% to 53.23 on Tuesday.
Enphase Energy (ENPH) advanced 4% to 115.
Solar power (SPWR) soared 61% to 4.42, riding the current meme stock frenzy.
Food stock and financing
Plug Power, based in Latham, New York, originally formed around replacing forklift batteries with fuel cells. It serves businesses, in particular Walmart (WMT) And Amazon.com (AMZN), and secured credits for creating the first commercially viable market for hydrogen fuel cells.
It has increasingly focused its activity on green hydrogen supply chain. Plug still has its handling activity. It manufactures fuel cells and electrolyzers, which produce hydrogen from water, and also offers storage and transportation solutions.
In December, the company completed its first electrolyzer system at an Amazon fulfillment center. The center, located in Aurora, Colorado, now powers its 225 forklifts with hydrogen produced on site.
Well beyond forklifts, Plug Power aims to become the world’s largest producer of green hydrogen. As a first step, this year it aims to produce more than half of its hydrogen energy from entirely renewable sources.
However, Plug Power struggled as delays kept its hydrogen production below the level of its supply commitments. It filled the gap by purchasing hydrogen from third parties. This drove up its costs.
As a result, the resulting cash burn helped cause shares to fall 94% between January 2021 and the end of November.
In April, the company’s first green hydrogen plant in Georgia reached its planned capacity of 15 tons per day. This helped reduce the deficit.
Still, analysts have given the stock a parade of price target cuts.
In March, the DOE announced $750 million in funding for 52 projects across 24 states, intended to reduce the cost of clean hydrogen and “strengthen U.S. leadership in the growing hydrogen industry “.
Plug Power emerged as one of the main beneficiaries, shortlisted for nine awards: three as main contractor and six as subcontractor. These grants for Plug Power are worth more than $70 million.
Please follow Kit Norton on X, formerly known as Twitter, @KitNorton for more coverage.
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