Plug Power announced Tuesday it has received a $1.66 billion loan from the U.S. Department of Energy (DOE) to develop and construct up to six green hydrogen production facilities. Plug Power stock surged on the news.
The loan from the U.S. Department of Energy comes as Plug Power has in recent months burned up its cash. That led the company to announce in January plans to sell up to $1 billion in shares.
In November 2023, Plug Power said it was evaluating debt financing solutions to support growth and that it was working toward a conditional commitment from the Department of Energy to finance plants in its green hydrogen network.
"The loan guarantee will prove instrumental to grow and scale not only Plug's green hydrogen plant network, but the clean hydrogen industry in the United States," Plug Power Chief Executive Andy Marsh said in a press release Tuesday.
Plug Power stock rallied more than 40% intraday during market trade on Tuesday. Shares of PLUG ended the day up 19% to 3.44 while fellow new energy stock FuelCell Energy surged 24%.
Meanwhile, solar stocks also surged.
Sunnova Energy jumped 27.5% to 5.33. Meanwhile, Sunrun jumped 6.5% to 12.27 and SolarEdge Technologies gained 2.9% to 53.75 on Tuesday.
Enphase Energy advanced 5.7% to 117.11.
SunPower ballooned 60% to 4.38, riding the current meme stock frenzy.
Plug Power Stock And Funding
Latham, N.Y.-based Plug Power originally formed around replacing forklift batteries with fuel cells. It serves companies including Walmart and Amazon.com, and earned credit for creating the first commercially viable hydrogen fuel cell market.
It has increasingly focused its business on the green hydrogen supply chain. Plug still has its materials handling business. It manufactures fuel cells and electrolyzers, which produce hydrogen from water, as well as offering storage and transportation solutions.
In December, the company completed its first electrolyzer system at an Amazon fulfillment center. The center, in Aurora, Colo., now powers its 225 forklifts with hydrogen produced on-site.
Looking well beyond forklifts, Plug Power aims to become the world's largest green hydrogen producer. As a first step, it targets production of more than half its hydrogen energy from entirely renewable sources this year.
However, Plug Power has struggled as delays kept its hydrogen production below the level of its supply commitments. It has filled the gap by buying hydrogen from third parties. That has driven its costs higher.
Consequently, the resulting cash burn helped drive shares down 94% from January 2021 to the end of November.
In April, the company's first green hydrogen plant in Georgia reached planned capacity of 15 tons per day. That helped narrow the shortfall.
Still, analysts have handed the stock a parade of price-target cuts.
In March, the DOE announced $750 million in funding for 52 projects across 24 states designed to reduce the cost of clean hydrogen and "reinforce American leadership in the growing hydrogen industry."
Plug Power was situated as a major recipient, selected for nine awards — three as a prime contractor and six as a subcontractor. Those grants for Plug Power are worth more than $70 million in funding.
Please follow Kit Norton on X, formerly known as Twitter, @KitNorton for more coverage.
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