Fuel Cells: Costs and Markets
Because fuel cells today are still in the research and development phase, the production of fuel cell systems is extremely expensive. As the government, major market forces, and new entrants to the market continue to explore and refine the technology, fuel cell prices may come down and markets could expand.
Technology expenses
The biggest hurdle for fuel cells is cost. Although some fuel cell systems are in use today, very few are currently cost effective. For stationary fuel cells, typical capital costs for installed systems exceed $5,000 per kilowatt (kW)—well above the target capital cost of $1,000-$1,500 per kW used by most energy generation developers.
Fuel cells are currently more expensive because of research and development costs, as well as the costs of the materials themselves. Some types of fuel cells require expensive catalysts like platinum, or are highly sensitive to chemical impurities in hydrogen and/or oxygen, which are costly to purify.
The lack of a hydrogen delivery infrastructure also makes commercialization of fuel cells prohibitively expensive.
Early technology risks
Fuel cells are still in a relatively early stage of development and even the few commercially available models have limited fleet operating experience. This emerging technology requires risk-taking early adopters as end users in order to ultimately expose more consumers to the benefits of fuel cells. As the technology matures, adoption risks will decrease.
Many technologies that are currently mass-produced began as expensive research endeavors. Costs can decrease rapidly as more technological advancements are made. This can also be true for fuel cells; government and private funding for fuel cell research allows scientists to continue optimizing the technology to make it better and more cost-effective.
Job creation
An increased governmental and corporate interest in making fuel cells commercially viable will lead to the expansion of fuel cell research and development, manufacturing, and installation services. New companies may enter the fuel cell market or provide peripheral products and services, and jobs for engineers, manufacturing workers, contractors, and other professionals may expand. Educators who can instruct students in application of fuel cell technologies may also be in higher demand.