APPENDIX B: FINANCIAL VIABILITY ANALYSIS OF EXPORT-ONLY ELECTROLYZER PROJECTS

The analysis finds that export-only electrolyzer projects—which use co-located clean energy and can sell excess power to the grid—are financially competitive across large areas of the U.S. Using test sites in West Texas, near Houston, and Southwest Minnesota, the study demonstrates that these projects can generate profits even with conservative power price assumptions and current capital costs. Hydrogen sales, bolstered by the 45V tax credit, account for 72-79% of total revenue. The authors conclude that strict adherence to the principles of additionality, deliverability, and hourly time-matching is compatible with industry growth.

• Export-only electrolyzer projects are financially competitive across significant portions of the United States, suggesting that strict 45V guidance on lifecycle greenhouse gas emissions would not impede the development of the clean hydrogen industry.
• Hydrogen sales, including the $3/kg tax credit, are the primary revenue driver for these projects, representing between 72% and 79% of all income.
• Financial modeling across three U.S. sites shows that most project configurations are profitable, with unprofitable outcomes generally limited to scenarios combining high-price renewable energy and high electrolyzer capital costs.
• Project viability is heavily dependent on wind resource quality, as wind availability varies more than solar quality.
• The analysis identifies West Texas as having high net profit margins that can support hydrogen storage and transport costs, while sites near Houston and Southwest Minnesota have tighter margins but better proximity to existing pipelines and industrial users.
• The study assumes a revenue model based on selling hydrogen at $1/kg, collecting a $3/kg tax credit, selling excess clean electricity to the grid, and selling all electricity during premium price periods (above $80/MWh).

APA

ESPOSITO, D., GIMON, E., & OBOYLE, M. (2023). APPENDIX B: FINANCIAL VIABILITY ANALYSIS OF EXPORT-ONLY ELECTROLYZER PROJECTS. Energy Innovation. https://energyinnovation.org/wp-content/uploads/45V-Paper-Appendix-B.pdf

Chicago

ESPOSITO, DAN, ERIC GIMON, and MIKE OBOYLE. APPENDIX B: FINANCIAL VIABILITY ANALYSIS OF EXPORT-ONLY ELECTROLYZER PROJECTS. Energy Innovation, 2023. https://energyinnovation.org/wp-content/uploads/45V-Paper-Appendix-B.pdf.

Wikipedia

{{cite report |last1=ESPOSITO |first1=DAN |last2=GIMON |first2=ERIC |last3=OBOYLE |first3=MIKE |title=APPENDIX B: FINANCIAL VIABILITY ANALYSIS OF EXPORT-ONLY ELECTROLYZER PROJECTS |publisher=Energy Innovation |date=May 2023 |url=https://energyinnovation.org/wp-content/uploads/45V-Paper-Appendix-B.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{esposito2023appendix, author = {ESPOSITO, DAN and GIMON, ERIC and OBOYLE, MIKE}, title = {{APPENDIX B: FINANCIAL VIABILITY ANALYSIS OF EXPORT-ONLY ELECTROLYZER PROJECTS}}, institution = {Energy Innovation}, year = {2023}, month = may, url = {https://energyinnovation.org/wp-content/uploads/45V-Paper-Appendix-B.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }