The North American Hydrogen Electrolyzer Industry: Market Overview and Projects

North America, the US in particular, has become one of the most attractive regions for green hydrogen developers and hydrogen equipment manufacturers thanks to robust governmental support and incentives.

This article explores the major developments in the hydrogen electrolyzer industry in North America. It is based on a new intelligence report developed in collaboration with World Hydrogen Leaders for the upcoming World Electrolysis North America, which will take place from September 4 to September 6 at the Hyatt Regency in Boston, MA. The free report can be accessed here.

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REGULATIONS AFFECTING THE ELECTROLYSIS MARKET

The US electrolytic hydrogen market is being stimulated through the new Section 45V Clean Hydrogen Production Tax Credit (PTC), which aims to enhance domestic clean hydrogen production over the next decade by offering tax incentives ranging from USD 0.60 to USD 3.00 per kilogram of hydrogen for projects with low lifecycle greenhouse gas (GHG) emissions.

The regulations detailing the criteria for the 45V tax credit, currently in draft and yet to be finalized, focus on incrementality, deliverability, and temporal matching. The proposed rules sparked debate within the industry, with mixed reactions regarding their stringency. The most debated aspect is the hourly matching requirement, which will commence on January 1, 2028, following a transitional period.

In addition to the 45V tax credit, the Inflation Reduction Act (IRA) also supports manufacturers of electrolyzers, fuel cells, and related equipment through the Qualifying Advanced Energy Project Credit, or the 48C tax credit. Originally introduced in 2009, Section 48C of the Internal Revenue Code has been expanded by the IRA to provide USD 10 billion in credits, with USD 4 billion reserved for projects in energy communities. This program offers an investment tax credit of up to 30% for qualifying investments in certified projects that adhere to prevailing wage and apprenticeship standards.

The first round of the program allocated USD 4 billion in tax credits in March 2024 for over 100 projects across 35 states to accelerate domestic clean energy manufacturing and reduce greenhouse gas emissions at industrial facilities. The second round with a budget of USD 6 billion opened for applications in May 2024.

In addition, the Department of Energy (DOE) in March 2024 committed to providing USD 750 million in grant funding to support R&D projects in 24 states aimed at bolstering the domestic production of electrolyzers and essential equipment for the green hydrogen industry.

In Canada, the government seeks to encourage investments in clean hydrogen production by offering a refundable investment tax credit. This initiative, first introduced in the 2022 Fall Economic Statement, was elaborated upon in Budget 2023. The rate of the tax credit is in the range of 15% to 40% and depends on several factors, including the anticipated carbon intensity of the production process, the acquisition year of the property, its availability for use, and compliance with specific labor requirements.

Canadian companies that produce electrolyzers, hydrogen refueling systems, and other clean technology equipment can benefit from the Investment Tax Credit for Clean Technology Manufacturing. This credit offers a 30% tax rebate on their manufacturing costs.

MAJOR ELECTROLYZER FACTORIES AND PROJECTS

The emphasis placed by the US administration on green hydrogen, coupled with generous incentives, has made the domestic electrolysis market highly attractive to investors. As a result, several major players are already operating electrolyzer manufacturing plants, while others are constructing new facilities and planning ambitious projects.

- Norway-based Nel is expanding its PEM electrolyzer production facility in Connecticut to nearly 500 MW and the expansion should be completed by 2025. The company is planning also a 4-GW factory in Detroit for both alkaline and PEM electrolyzers.

- Plug Power established a Gigafactory in Rochester, New York, with a nameplate manufacturing capacity of 2.5 GW for fuel cells and PEM electrolyzers.

- Bloom Energy Corp, specializing in solid oxide fuel cell (SOEC) technology, operates a 1-GW manufacturing plant in California and a high-volume commercial electrolyzer line at its Newark facility, boosting the company's electrolyzer production capacity to 2 GW. Additionally, the company plans to further expand its manufacturing capacity.

- Accelera by Cummins has a 500-MW PEM factory in Minnesota and plans to expand it to 1 GW in the future.

- In April 2024, Bill Gates-backed start-up Electric Hydrogen opened a gigafactory in Devens, Massachusetts. Once fully ramped, the factory will have a nameplate capacity to manufacture 1.2 GW of PEM electrolyzers.

- Cleantech company Evoloh Inc is building a gigafactory for AEM electrolyzer stacks in Lowell, Massachusetts.

- The generous incentive programme in the US has attracted other major players in the industry such as Denmark's Topsoe which plans to establish a 1-GW SOEC manufacturing facility in Virginia and Belgium's John Cockerill which is building a 1-GW alkaline electrolyser factory in Baytown, Houston, Texas.

The inaugural World Electrolysis North America brings together electrolytic hydrogen experts, prominent industry leaders, and key stakeholders throughout the North American clean hydrogen landscape to unlock new commercial opportunities and deep insight into the electrolysis ecosystem in the region. Its three-day program includes a masterclass focused morning, and electrolyzer-focused content covering all aspects of electrolyzer industry development, from balance of plant and solutions for renewable variability to ramping up deployment and scaling up operations. To view the full agenda, download the brochure here or register your place here.

Benefit from our exclusive partner discount for RenewablesNow readers to get 20% off your delegate pass on top of the current rates to World Electrolysis North America. Use code RENEWABLESNOW20 when registering online to apply your discount.