In 2025 and beyond, you can add “the need for more electricity” to a list of certainties along with death and taxes. In addition to the voracious demand for electricity spawned by artificial intelligence, demand is also being stoked by the anticipation of robust economic growth and weather-related events.
One solution could come from green hydrogen. This process produces hydrogen with an electrolyzer that separates water into hydrogen and oxygen. It fulfills the promise of being a clean energy solution. However, this is still a new technology, and without industry subsidies, it’s impossible to deliver green hydrogen at scale. To emphasize this point, McKinsey recently cut its U.S. green hydrogen forecast for 2030 by 70%.
Many people believe that the market for green hydrogen will be among the programs targeted for cuts by the Trump administration. But that may not be true. The industry is on the verge of some key innovations that could make the technology easier to commercialize. If these innovations position American companies to take a leadership role in the sector, it could be attractive to the president-elect.
It won’t be easy for the Trump administration to remove the tax credit for green hydrogen created by the Inflation Reduction Act, which has bipartisan support. Ironically, the incoming administration could play a role in lowering regulations that have made it difficult for some companies in the sector to meet the requirements to get the tax credit.
This is still a risky sector, and some may call it uninvestable. But if you have an appetite for risky energy stocks, here are three green hydrogen companies to consider.
FuelCell Energy Shows Why Location May Hold the Key
The current alternative to green hydrogen is hydrogen created using natural gas. That’s been a difficult pill for the industry to swallow because hydrogen made with natural gas is much less expensive to produce. Low natural gas prices in the United States create a double whammy for the industry.
But, it also means there could be an opportunity for countries like FuelCell Energy Inc. (NASDAQ: FCEL) to do business in countries with higher natural gas prices. One such country is South Korea, where FuelCell Energy has significant operations. The company’s fuel cells currently produce over 100 megawatts of sustainable electricity nationwide. It recently signed a memorandum of understanding (MOU) with Korea Hydro & Nuclear Power Co. Ltd in which the companies would jointly pursue hydrogen energy business initiatives.
That's the good news. The bad news is that the company announced a global restructuring in November 2024 in anticipation of slower-than-expected investment in clean energy. And that came after announcing a 1-for-30 reverse stock split.
Bloom Energy Attracts the Attention of Analysts After Data Center Wins
Data centers have become one of the most widely discussed topics in the investing community. It’s a supply and demand issue. In this case, there isn’t enough power for supply to keep up with demand. The next green hydrogen company on this list, Bloom Energy Corp. (NYSE: BE), is getting well-positioned to take the lead in this sector.
In November 2024, the company announced a deal with American Electric Power Company Inc. (NASDAQ: AEP). The terms of the deal have Bloom supplying up to one gigawatt (GW) of its products. That marks the largest commercial procurement of fuel cells in the world as of this writing. Under the terms of the agreement, AEP is ordering 100 megawatts (MW) of fuel cells, and there is an expectation of more orders in 2025.
The response has been swift and positive. Analysts appear willing to overlook the company’s disappointing earnings report and are raising their price targets even though the payoff for the AEP deal isn’t likely to emerge until 2026.
Plug Power Has a Backlog of Projects But Still Needs Time
If you just looked at Plug Power Inc.'s (NASDAQ: PLUG) website, you’d be encouraged by all the contracts, joint ventures, and partnerships the company lists. The company’s fuel cell-powered commercial vehicles are used by companies such as Walmart Inc. (NYSE: WMT), Home Depot (NYSE: HD), and Amazon.com Inc. (NASDAQ: AMZN).
However, when you look at the company’s recent earnings, you see a story of declining year-over-year revenue and continued negative earnings per share (EPS). PLUG stock is down 52.8% and analysts continue to downgrade it.
However, hydrogen and green hydrogen stocks are generally a long-term play. In the case of Plug Power, a small speculative investment today could yield enormous returns if hydrogen becomes a realistic alternative to battery electric vehicles (BEVs). That said, with short interest over 24%, you should pick your entry point carefully. This may be a better trade for now.
