Fuel Cells

Using an electrochemical process discovered more than 150 years ago, fuel cells began supplying electric power for spacecraft in the 1960s. Today they are being developed to provide on-site power for military bases, banks, police stations, and office buildings from natural gas. Fuel cells can also convert the energy in waste gases from water treatment plants to electricity.

 

The Department of Energy formed the Solid State Energy Conversion Alliance (SECA) with a goal of producing a solid-state fuel cell module that would cost no more than $400/kW. At this price, fuel cells would compete with gas turbine and diesel generators.

 

The primary reason that fuel cells are not being installed everywhere is the cost of premium fuels and the cost of fuel cell systems. Fuel cells developed for the space program in the 1960s and 1970s cost about $600,000/kW and impractical for terrestrial power applications. During the past three decades, significant efforts have been made to develop more practical and affordable designs for stationary power applications. But progress has been slow. Today, the most widely deployed fuel cells cost about $4,500 per kilowatt; by contrast, a diesel generator costs $800 to $1,500 per kilowatt, and a natural gas turbine can be $400 per kilowatt or even less.

 

The Energy Policy Act of 2005 includes the first tax incentive for fuel cell power plants at the Federal level. To qualify, a fuel cell facility must be an integrated system comprised of a fuel cell stack assembly and associated balance of plant components that convert a fuel into electricity using electrochemical means; and which has an electricity-only generation efficiency of greater than 30 percent and generates at least 0.5 megawatts of electricity; and which is placed in service after December 31, 2005, and before January 1, 2009. The taxpayer can claim the 1.5 cents-per-kilowatt-hour (indexed for inflation) credit for a five-year period commencing on the date the facility is placed in service.