The hydrogen industry, and Plug Power Inc (NASDAQ:PLUG) in particular, is holding its breath as the Treasury inches closer to releasing its final guidance on the Inflation Reduction Act's 45V Production Tax Credit.

JPMorgan analyst Bill Peterson highlights that while clarity on this $3/kg credit could lift a year-long overhang on PLUG's stock, restrictive guidelines might stifle the company's U.S. growth plans.

The Stakes: Cost Pressures, International Focus

With the final guidance expected to address key issues like additionality, time matching, and regionality requirements, Peterson notes that Plug Power's pipeline of green hydrogen plants, particularly in Georgia and Texas, could face significant cost pressures if the current framework holds.

The company has warned that overly stringent regulations could force it to redirect its focus to international markets like Europe and Australia, where hydrogen policy frameworks are more accommodating.

Read Also: What Is Plug Power's Future? Analysts Warn Of Cash Crunch And Slow Hydrogen Market Growth

Optimism For Leniency In Final Guidelines

Peterson sees some reason for optimism as lawmakers and industry leaders continue to push for leniency in the final guidelines.

Suggestions include easing hourly matching requirements, qualifying nuclear and hydropower as clean energy sources, and grandfathering early-stage projects.

What It Means For Plug Power's Growth

Favorable revisions could spark growth in Plug Power's U.S.-based electrolyzer business, though meaningful acceleration may only materialize after 2026 due to permitting and project timelines.

While the 45V credit is seen as vital for making green hydrogen cost-competitive with its grey and blue counterparts, the guidance's final form could dramatically impact the industry's trajectory—and Plug Power's stock reaction may likely be just as dramatic.

• Plug Power, EVgo Among JPMorgan's Top Sustainable Picks For 2025

Photo: Shutterstock