Four banks gave the electrolyzer manufacturing startup a vote of confidence, despite its having barely started production.
Hydrogen bubbles produced during electrolyzer stack testing at Electric Hydrogen. Photo credit: Electric Hydrogen
Hydrogen bubbles produced during electrolyzer stack testing at Electric Hydrogen. Photo credit: Electric Hydrogen
Four major banks are signaling their faith in the promise of green hydrogen, by providing a substantial corporate loan to an electrolyzer manufacturer that is still in the early stages of production.
In March, Warnick told Latitude Media that Electric Hydrogen’s approach is to largely rely on non-dilutive capital, like the corporate credit facility it just obtained, so that it can use equity financing for research and development. To keep costs down and make itself attractive to more risk-averse investors, the company has been relying on equipment with mature supply chains, among other things.
The news comes less than two months after Electric Hydrogen announced $50 million in equipment financing provided by Trinity Capital and $46 million in a Department of Energy grant under the infrastructure law’s clean electrolysis program. Since its founding in 2020, Electric Hydrogen has secured over $750 million in financing from investors such as Amazon’s Climate Pledge Fund, BP, and Breakthrough Energy Ventures.
According to the announcement, Electric Hydrogen plans to use the new financing to advance the deployment of its 100-megawatt electrolyzer plants, which rely on proton exchange membrane electrolysis technology. The company plans to reach full production volume — 1.2 gigawatts per year — by 2025.
Electric Hydrogen is not alone in raking in financing. Its domestic electrolyzer startup peers have also grown flush with funding in recent years, and the release of the Department of Treasury’s proposed 45V hydrogen production tax credit guidelines have given the industry new clarity.
Rahul Bammi, president of alkaline electrolyzer startup Verdagy, told Latitude Media that interest in the company’s equipment has increased since the release of the guidelines. Verdagy opened its California manufacturing facility late last year and it is also planning to speed up production in 2024.
Despite these recent gains, however, the market is still relatively young. According to the International Energy Agency, in 2022 global electrolyzer manufacturing capacity stood at 14 GW. Manufacturers are aiming to reach 155 GW of manufacturing capacity per year globally by 2030, IEA found, but only 8% of the capacity has reached a final investment decision.