Bloom Energy (BE), Plug Power (PLUG), FuelCell Energy (FCEL), and Nikola (NKLA) are among the hydrogen stocks rallying today. They are surging after the Biden administration today unveiled rules that will make it significantly easier for companies to obtain tax credits for producing green hydrogen in the next several years.

The Rule Changes

Under the new criteria, green hydrogen producers will be able to obtain the $3 per kilogram tax credit through 2029 by showing that their hydrogen production is powered by renewables on an annual basis. Starting in 2030,  firms will have to show that they are using renewables hour by hour to produce their hydrogen in order to obtain the tax credit. Under the previous rule issued by the Biden administration, the latter requirement was slated to take effect in 2028.

An overhead view of an assembly line producing hydrogen-powered vehicles.

Moreover, hydrogen producers can use up to 200 megawatts of power from nuclear plants that are in danger of shutting down and still qualify for the tax credit. Under the prior rule, only power from new nuclear plants could be utilized.

Finally, also qualifying for the tax credit will be hydrogen that's produced using power from some fossil fuel plants that recently added carbon capture systems.

"The administration made significant improvements and considered industry feedback in several instances when crafting this final rule compared to the initial proposal, " Frank Wolak, the President and CEO of the Fuel Cell and Hydrogen Energy Association (FCHEA) said in a statement. "However, this rule is still extremely complex and will require intense evaluation by project developers to understand all the nuances and how they will apply to their specific facilities," Wolak added.

While we acknowledge the potential of BE, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ ALSO  8 Best Wide Moat Stocks to Buy Now  and  30 Most Important AI Stocks According to BlackRock Disclosure: The author owns shares of PLUG. He has no intention of trading them in the next 48 hours. This article is originally published at Insider Monkey.