Tax Credits and Hydrogen Production: How 45V and 45Q Shape Project Profitability in the US

Author

Alexander M. Economides, in collaboration with Enerdatics Energy Analytics Team

Purpose

This article was written in collaboration with Enerdatics Energy Analytics o examine how U.S. tax incentives—particularly 45V and 45Q—impact hydrogen project valuation and investment modeling. It supports Enerdatics’ mission to clarify the true economic drivers of hydrogen production using standardized, data-driven analysis tools.

Summary

This Enerdatics article by Alexander M. Economides explores the critical differences between two common approaches for calculating the levelized cost of hydrogen (LCOH): the simple cost-based method and the NPV-zero or “breakeven price” approach used by DOE and NREL.

It highlights how methodological choices can dramatically alter results, potentially leading experts to opposite conclusions using identical data. By clarifying the financial assumptions behind each model, this piece underscores why transparency in hydrogen cost modeling is essential for investors, analysts, and policymakers. The series adopts the NPV-zero framework to align with existing data and ensure consistency across global hydrogen cost comparisons within Enerdatics’ analytics platform.

Tags: Hydrogen, 45V Tax Credit, 45Q Tax Credit, Inflation Reduction Act, Enerdatics, Levelized Cost, Project Economics, Energy Transition