Why are the Prices of Fuel Cells Dropping?
In recent years the price of fuel cell stacks has dramatically dropped. In 2010 a 120kW fuel cell stack had an average price of around $ 1 million, but by 2022 this had fallen to about $ 200,000. In the next decade the cost is expected to go down even more, with prices expected to be under $ 100,000. Fuel cell prices are therefore decreasing at a significant rate. Why is this happening? In this article we go through several factors that have led to the unprecedented decrease in the price of fuel cells.
1. Manufacturing Improvements
As demand for fuel cells has soared, manufacturers have innovated and improved how fuel cells are made. Most of this innovation has centred on new production techniques. As the means of creating fuel cells has become cheaper over time, the price of fuel cells has gone down significantly.
2. Increased Competition
More producers than ever are selling fuel cells. As these firms compete against each other for market share, they naturally cut prices in trying to sell more fuel cells. This increased competition has therefore resulted in an incredible decrease in the price of fuel cells. Large firms such as Hyundai and Toyota have also put significant amounts of money into R&D, which has increased the number of fuel cells that can be made and driven down the costs of manufacturing.
3. Government Incentives
Governments all over the world are doing the best they can to help drive the development of fuel cells. As the market for fuel cells is expected to grow at a blinding rate in the next decade - every country wants a piece of the cake. A good example of this is the US government. With a recent investment of over $ 7 billion in hydrogen production plants around the country, the US government created large financial incentives for private industries to invest in hydrogen fuel cells and electrolyzers (hydrogen generators). These types of incentives reduce the cost of fuel cells and make them more easily within reach of more people.
4. Decreased Cost of Hydrogen Production
Hydrogen is a vital component in fuel cell technology as it serves as the fuel that fuel cells convert into electricity. As production methods get more efficient and technology advances, the cost of hydrogen production has decreased dramatically. This means cheaper hydrogen and more demand for fuel cells, leading to cheaper fuel cells.
5. Less Need for Fuel Cell Maintenance
In recent years fuel cell technology has advanced at a brisk pace. Some of the biggest advances have been solid oxide fuel cells (SOFCs) and proton exchange membrane fuel cells (PEMFCs). These types of fuel cells offer improved performance and reliability, reducing the need for costly maintenance and increasing the lifespan of fuel cell systems. This makes buying and running a fuel cell stack much cheaper.
Overall, fuel cell prices have gone down rapidly over the past few years. Increased competition, improvements in manufacturing, government help, a reduced cost of hydrogen production and less need for fuel cell maintenance have all contributed to the existence of relatively cheap fuel cells. As the decade continues, the price is expected to decrease even more. Consumers looking to buy a fuel cell are therefore in an excellent position to make the investment for a reasonable price.
Interested in learning more about fuel cells and their different applications? Check out our Ultimate Guide to Fuel Cells in 2023.