According to many metrics, Plug Power (PLUG -7.73%) is on a roll. Since the start of 2021, sales have skyrocketed by 2,000%. Plus, the company operates in what could someday become a trillion-dollar industry: hydrogen fuel.

It's reasonable to be optimistic about Plug Power. But does all this promise make the stock a buy? You may be surprised by the answer.

Hydrogen is going to be huge for this reason

Before we get into the stock, let's cover what exactly Plug Power does. The company designs and manufactures hydrogen fuel-cell systems, a promising technology that could help the world transition away from fossil fuels.

For electricity, alternative power sources like wind and solar work well, especially when supplemented by backup storage options like utility-scale batteries. There are, however, many industries that are deemed "difficult to decarbonize."

These include industries that require exceptionally high levels of heat, like cement and asphalt production, in which electricity cannot act as a drop-in replacement for fossil fuels. And there are the industries where weight is a crucial factor, like aviation. Currently, the weight of batteries needed to power a large jet make it simply unfeasible.

This is where hydrogen comes in. Not only can it be produced in a climate friendly manner -- at least in comparison to fossil fuels -- but it also has the energy density to power all of these difficult-to-decarbonize industries. In summary, if we want to transition the world's economy away from oil, coal, and gas, hydrogen could end up being a gigantic opportunity.

According to the consultancy McKinsey, "global clean hydrogen demand is projected to grow significantly to 2050, but infrastructure scale-up and technology advancements are needed to meet projected demand."

This is where Plug Power comes in. Founded in 1997, the company has been building hydrogen fuel systems for decades, with several successful pilot projects. Last week, it received a $1.7 billion loan guarantee from the U.S. government, highlighting hydrogen's importance for our long-term energy future. Its management is expecting big things over the next decades, but there's just one problem.

PLUG revenue (TTM), data by YCharts; TTM = trailing 12 months.

The issue with Plug Power stock

Hydrogen is a promising fuel source. But right now, it's not cost competitive with competing alternatives. That could change given technological improvements as well as rising regulatory constraints on the use of fossil fuels.

But a world in which hydrogen fuel systems dominate hard-to-decarbonize sectors remains years away, if not decades. That's a big problem for Plug Power considering it's still losing a ton of money every quarter.

Over the past 12 months, the company has lost roughly $1.4 billion. It has a market cap of only $2.2 billion, so at this pace, it will burn through its entire valuation in just 18 months.

To survive, management has aggressively pursued government grants and loan guarantees, similar to what it received last week. The company has also consistently sold more and more stock, heavily diluting its shareholders in return for financial stability.

Put simply, Plug Power is a promising company but a terrible investment. A future powered by hydrogen remains far away -- but its mounting losses are a reality today. Unless there is a seismic shift in regulations, don't expect the equation to change anytime soon.

The company will remain reliant on one-off subsidies and ongoing share sales to survive. Even a step change in hydrogen's cost competitiveness may not help if that technological breakthrough is achieved by a competitor. With minimal excess funds to divert to research and development, the possibility of the company's technology moving toward obsolescence is a true risk.

Is Plug Power an exciting business to monitor? Absolutely. But is it a good investment? Not for now.