In the vernacular of the season, Plug Power can’t wait to see what may be under the tree on Christmas morning.
The benefactor isn’t jolly ol’ St. Nick, though, but the lame duck Congress currently meeting in Washington.
And the hoped-for gift isn’t a shiny new bike but a five-year extension on investment tax credits that encourage potential customers to give Plug’s hydrogen fuel-cell technology a try.
The so-called “orphan” tax credits are set to expire at year’s end. The name comes from their being inadvertently left out of legislation passed last year that extended the credits for solar and wind technology.
While an attempt was made in the spring to extend the orphans (through an add-on to unrelated legislation), that didn’t pan out. So the lame duck session — a time to tidy up odds and ends — is the last hope before a new administration and Congress take office in January.
But the chances for success remain unclear.
On Tuesday, industry advocates held a press conference in Washington to urge passage, but expressed concern that won’t happen, according to an account in Morning Consult, a business- and Congress-watching newsletter.
The fear is that with “tax” in the name, the credits could be set aside to be dealt with when the new Congress tackles comprehensive tax reform, the newsletter quoted one industry representative as saying. In the meantime, “we’re going to be bleeding,” he said.
Besides fuel cells, the tax credits would benefit geothermal heat pumps, small wind, combined heat and power, microturbines and thermal energy, according to the newsletter.
U.S. Sen. Charles Schumer talked up the credits a lot earlier in the year, including at Plug Power’s headquarters and factory in Latham. A spokesman said Wednesday that Schumer remains a strong supporter of the credits and was hopeful the extension would be passed.
Plug CEO Andy Marsh seems optimistic, too.
In a conference call with analysts last month on third-quarter results, Marsh said the company has been “very straightforward” with lawmakers on the importance of the credits, which he said are needed for just another five years “to make sure this technology transitions from one that needs government support to one that doesn’t.”
Marsh told the analysts that if there were no uncertainty about the credits’ future, contract bookings for Plug would be higher year to date. Plug’s fuel cells provide an alternative to traditional batteries to power forklifts used to move product in warehouses; its “blue chip” customers include the likes of Wal-Mart, Home Depot, Sysco and FedEx.
Without the extension, Marsh said Plug’s expectation to be “cash flow positive” next year will be pushed into 2018. But he said that wouldn’t dampen “the growth or potential we see in the market.”
Plug reported a loss of $13.4 million on revenue of $17.5 million in the third quarter. It has yet to turn a profit.
Marlene Kennedy is a freelance columnist. Opinions expressed in her column are her own and not necessarily the newspaper’s. Reach her at [email protected]