Fuel Cells Are Not The Hydrocarbon Option You Might Think

Currently, the only way to get sufficient quantities of hydrogen for fuel cells for commercial purposes is to use methane gas. The process combines methane gas and steam at a certain pressure and temperature range to create pure hydrogen gas and carbon dioxide. The tax credit for fuel cells will expire in December 2016. Electricity produced by Fuel Cell Energy is about $2,250/kilowatt. The price needs to come down at least 20% before it becomes comparable to that from Capstone Turbine.

Fuel cells are not an alternative energy solution -- it still uses the same natural gas that many other power-generating options use today. Unless there are some significant changes to carbon emissions regulations or a continuation of fuel cell tax credits, it will be very difficult for fuel cells to compete on the open market in any power generation market. Some niche markets will exist such as Plug Power's battery replacements for material handling equipment such as forklifts and potentially in electric hybrid delivery trucks, but fuel cells will struggle to gain market share as long as the costs are still high.