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

This appendix provides a financial viability analysis of 'export-only' electrolyzer projects in the United States, which utilize co-located new clean energy resources and allow for opportunistic electricity sales to the grid. The analysis concludes that such projects, which comply with the three principles of additionality, deliverability, and hourly time-matching, are competitive across large portions of the U.S., suggesting that rigorous 45V tax credit guidance regarding lifecycle greenhouse gas emissions would not hinder industry growth.

• Export-only electrolyzer projects—defined as those buying power from co-located new clean energy resources rather than the grid while allowing opportunistic sales of clean energy to the grid—are competitive across large areas of the United States. This suggests that rigorous 45V guidance measuring lifecycle greenhouse gas emissions would not harm the development of the clean hydrogen industry.
• The financial modeling for these projects assumes three primary revenue streams: selling hydrogen at a fixed rate of $1 per kilogram (plus a $3/kg tax credit), selling excess clean electricity to the regional power market, and shutting down the electrolyzer to sell all available electricity when market prices exceed $80/MWh.
• Hydrogen sales, including the $3/kg tax credit, are the dominant source of income for the analyzed projects, accounting for 72% to 79% of total revenue. This high proportion of revenue from hydrogen encourages the oversizing of renewable resource build-outs to increase electrolyzer load factors.
• Analysis of three test sites shows that projects are generally profitable except when high-price renewable energy and high electrolyzer capital costs are combined. West Texas showed the highest net profit margins, which could fund hydrogen storage and transport, while sites near Houston and Southwest Minnesota have tighter margins but better proximity to existing pipelines and industrial users.
• The viability of these projects depends heavily on wind availability, as wind resource quality varies more than solar. Projects are likely viable in U.S. regions where the average levelized cost of electricity (LCOE) for wind and solar is $25/MWh or less.

APA

ESPOSITO, D., GIMON, E., & O’BOYLE, 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 O’BOYLE. 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=O’BOYLE |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 O’BOYLE, 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} }