CFU has the only Fuel Cell approved under the mCHP program in...

CFU has the only Fuel Cell approved under the mCHP program in the UK. But it isn't the only product approved for the program.

So all the other products will also benefit from this announcement.

As is always the case, these types of incentives create major distortions in the market. That is there aim. The problem for CFU is simple - it product might simply be too good and too expensive to benefit. .

While CFU's Fuel cell will use far less gas than the alternatives to produce each KW of electricity, its high efficiency means it also produces less hot water per KW. If it doesn't produce enough to replace the Hydronic heating it might not be as attractive than less efficient alternatives for two reasons: available space and capital costs.

Space probably isnt as critcal as capital costs, but it may be a factor for some.

But if the punter looking at the options sees that they have to buy, maintain and run a hydronic heatings systems in conjunction with their high efficiency fuel cell, they might well go for a less efficient unit that does everything.

Further, a significantly higher capital cost will be a major disadvantage as it is likely take many years of lower running costs to make it an economical alternative. Most punters installing these units wont be thinking with such long horizons.

Also, the FiT will attract a whole group of "make a buck" entrepreneurs to the sector. They will focus on the cheapest units and look to move them in huge volumes. So the first beneficiaries of the economies of scale will most ikely be the makers of the less efficient cheaper technologies.

So while the announcements from the UK govt are great, CFU still faces huge challenges.