In an article in Law360, Pillsbury Renewable Energy practice leader Mona Dajani and Energy Industry Group leader Sheila Harvey analyze three typical questions clients are asking about hydrogen.
Are There Enough Tax Incentives?
Experts say the current tax perks available for clean energy projects weren't designed with hydrogen in mind and clarity would have to come from Congress.
However, Dajani told Law360 some hydrogen developers aren't waiting for a silver bullet in the form of a tax credit from Congress. “Instead, they're looking to pair hydrogen with solar projects that are eligible for the federal investment tax credit.”
"Whatever you can do to reduce those costs and have more deal certainty, the better it is for the project having viability and attracting some financing," Dajani said.
Will There Be a Carbon Tax?
"We get questions like, 'Do you think there is going to be a carbon tax, and if so, what do you think the terms of the carbon tax will be?'" said Harvey. "It would certainly help the economics of any of the new technologies that are being developed as part of the energy transition to address climate issues."
How Do I Protect and Develop My New Hydrogen Technology?
Future large-scale hydrogen development will rest on the creation of new technologies that help lower the cost of producing and using it, much like what has occurred with other clean energy resources such as wind and solar power, Law360 reported.
Harvey said that has prompted a flurry of questions from clients in two familiar categories when it comes to new hydrogen technologies: protecting the intellectual property underpinning it and securing the startup cash to develop it.
"How can they get financing? Where do they look for that? What issues do they need to be alerted to when they go out and look for money to develop their new technologies?" Harvey said.
But one wrinkle in answering these questions is that it's still unclear what types of government incentives there will be for new hydrogen technologies. That goes back to the broader question of whether there will be sufficient government support to make hydrogen development viable, Harvey added.
"We are discussing with clients and contacts what those government incentives might be," she said. "These will be important for the development of some of these technologies, particularly pending the development of a viable hydrogen market."