Benefits of Greenfield Sites in an ITC World
Plug Power customers come in many flavors – some large, some small; some retrofitting existing material handling fleets, and some building from the ground up. We call these new sites ”greenfields”. And, every day, our customers show us that making the switch to fuel cells from the start can save millions.
Battery Room vs. Hydrogen Fueling
Traditionally, a high throughput distribution center operating a battery-powered fleet requires a dedicated 3,000–5,000-square-foot battery room for which construction costs typically exceed $1 million.
By creating a hydrogen infrastructure inside a brand new facility (or “greenfield site”), companies can immediately recover more than 5,000-square-feet in valuable cubic storage space, and instead, install small-scale hydrogen fueling dispenser at strategically-located points around the building.
Facility managers also eliminate all of the associated battery room costs from day one. These professionals can now design the facility and “right-size” their fleets without having to worry about the expenses of additional batteries and forktrucks needed to manage a battery-powered fleet.
Today, almost half of Plug Power deployments are supporting new-construction greenfield distribution centers, like the Home Depot and Amazon facilities regularly being built. We see these customers as showcases for the future of distributing goods, and we believe there’s only one clear vision for powering forklift trucks in a distribution center. Plug Power customers are the proof points that Plug Power fuel cells and hydrogen fueling systems save money.
In 2018 and 2019, we expect that the reinstated investment tax credit (ITC) will help drive greenfield sites to break ground, designed with fuel cells and hydrogen in place, maybe even sooner than expected. With stronger economics, both current and new customers are enabled to adopt the productivity-enhancing solution.
The ITC will be helpful to Plug Power’s long term revenue growth, gross margin enhancements and cash flows with significant benefits in 2019. While Plug Power has demonstrated the ability to rapidly grow without the investment tax credit, as demonstrated by the Company’s 55% top line growth in 2017, the Company believes the ITC will be an additional accelerator for the business. And greenfield sites will lead the way.