Industry background article. Will FuelCell Energy Be The First...

Industry background article.

Will FuelCell Energy Be The First Profitable Company In The Industry?
Dec 15 2011, 07:08
By Eric Wesoff

I have gotten an enormous amount of mileage from the following list. It is a list of profitable fuel cell firms, and it goes like this:

We may soon have an entry for this perennially empty list. In fact, FuelCell Energy (Nasdaq:FCEL) has had two consecutive quarters with positive gross margins ($0.4 million in the fourth quarter), revenue that beat expectations, and a strong backlog.

FuelCell Energy builds molten carbonate stationary fuel cell power plants deployed at wastewater treatment plants, schools, pump stations, and sites that need low-emission baseload distributed generation.

Going by headlines, one would think that Bloom Energy invented fuel cells and pioneered their commercialization. In reality, fuel cells were invented in the 1800s and there is a large crowd of fuel cell firms going after the same stationary fuel cell market as FCE. They have in common a strong technological focus, a dependence on subsidies, and a tendency to lose enormous sums of money. Vendors in this sector include Bloom, Acal Energy, Ceres Power, UTC, ClearEdge Power, and Idatech.

FuelCell Energy's largest customer is POSCO Power, an independent power producer based in South Korea. But FuelCell Energy has also sold two 1.4-megawatt power plants to California utility PG&E and has three new plants in Southern California.

http://seekingalpha.com/article/314043-will-fuelcell-energy-be-the-first-profitable-company-in-the-industry