It’s a big day for Plug Power (NASDAQ:PLUG), as Senate Majority Leader Chuck Schumer announced that the U.S. Department of Energy (DOE) will provide $90.4 million in federal funding to three clean hydrogen companies as part of its Clean Hydrogen Manufacturing, Recycling and Electrolysis programs. This funding will help Plug increase its production of hydrogen and hydrogen equipment.
Of the $90.4 million, Plug will receive $75.7 million for two projects. The other two companies are Ionomr Innovations and Ecolectro.
“With this federal funding, Plug Power and other cutting-edge companies will be able to increase production capacity and spark new innovation to reach the next frontier of clean hydrogen manufacturing and research, all while supporting good paying clean energy jobs and boosting the fight against climate change,” said Schumer.
PLUG Stock: Plug to Receive $75.7 Million from the U.S. Department of Energy
Of the $75.7 million, $45.7 million will go toward developing automation capabilities at Plug’s proton exchange membrane (PEM) stack manufacturing plant in Rochester, New York. The funding will help Plug increase PEM output, lower production costs and automate the inspection process using machine learning.
The remaining $30 million will go toward meeting a cost goal of $80 per kilowatt for 100,000 heavy duty fuel cell systems per year by 2030, as well as automating the production of membrane electrode assemblies (MEAs).
On top of that, Plug could receive another check from the DOE this year. In January, Plug announced that it was in the process of receiving a $1.6 billion loan with a maximum rate of 6.5%. Chief Financial Officer Paul Middleton expects the loan to be closed by the third quarter.
The funding follows the resolution of a going concern warning, which was announced in Q3 2023 and subsequently removed during Q4.
Cutting costs is a major goal for Plug Power. While sales grew by 27% to $891 million last year, net loss accelerated by 89% to $1.36 billion. The loss was bolstered by a $249.48 million goodwill impairment charge. During Q4, the price of PLUG stock dipped below its book value, triggering the impairment review.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
