Fuel Cells in Spotlight but Hurdles Still Exist

Bloom Energy Corp.’s innovative, inexpensive Bloom Energy Server has garnered quite a bit of attention since its unveiling in February of this year—as has its list of high-profile customers, from Wal-Mart to eBay and Google. Still, say some, the technology might not quite be ready for prime-time.

For starters, there will be the challenge of manufacturing the devices in high volumes. Second there are cost concerns: while California subsidies make it cost-effective to use a fuel cell to generate power, in the absence of those subsidies fuel-cell power still costs more than conventional power.

Plus, the commercial lifespan of fuel cells is largely un-tested, meaning that manufacturers have had to include service in sales contracts, to induce customers to take a chance on the technologies.

Other developers of stationary fuel cells have run up against parallel problems. High materials costs, for example, have made it difficult for companies to turn a profit—though steadily increasing demand will tend to help reduce manufacturing costs over time.

FuelCell Energy Inc., which has been selling industrial-scale fuel cells since 2003, still loses money (around $800,000) on each 1 MW fuel cell it sells, reported the Wall Street Journal. But between 2007 and 2009 it saw its shipments triple and its costs go down by more than 50 percent—indicating that further volume will put it on the path to profitability.

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