Fuel cell maker Bloom Energy will open a factory on the site of a mothballed auto plant in Delaware and begin to sell fuel cells in that state.

Delaware has a portfolio standard that seeks to get 25 percent of the state's capacity from renewable sources by 2025. Governor Jack Markell is pushing to get fuel cells added to the definition of "renewable." It's not impossible. President Obama in his State of the Union speech argued for a "clean" energy standard that includes nuclear, clean coal and gas, instead of a "renewable" standard. Bloom's fuel cells convert gas to electricity onsite and are more efficient in most cases than converting gas at a central power plant and delivering the power through the grid.

Local utility Delmarva Power has signed a contract to buy 30 megawatts worth of Bloom boxes. Thirty megawatts will mean 100 Bloom Energy Servers. Bloom has been selling the servers for around $700,000 to $800,000 each.

The Delaware experiment will be an interesting test for fuel cells. Right now, Bloom largely -- in fact, almost exclusively -- sells its fuel cells in California because cumulative federal and state credits can come to a whopping $8.25 a watt. Delaware likely won't match that: some of the California incentives were put in place before the current era of austerity. Some estimate that Bloom's boxes cost close to $12 a watt. Thus, the price will have to come down to become commercially viable, even with a reasonable level of subsides from Delaware. If the company can sell them there, it will be an indication that the economics of mass manufacturing are helping to reduce the cost.

Last month, Bloom also appointed Girlish Paranjpe to head up international sales. Additionally, Bloom has begun to sell its fuel cells as a service to take some of the sting out of the initial investment.

The 200,000-square-foot plant is an old Chrysler plant. Delaware has two old auto plants. Fisker Automotive took over the other. Hence the nickname "The Old Factory State" you see on those new license plates. It's also probably not a coincidence that both Bloom and Fisker come out of the portfolio of Kleiner, Perkins, Caufield and Byers. Once a VC firm links one deal with a state, others follow. Three Khosla Ventures portfolio companies have inked manufacturing deals laced with incentives with Mississippi.

UPDATE: The Delaware plant is additive. In April, Bloom announced it was expanding its Sunnyvale, Calif. facility to 210,000 square feet. The expanded facility would employ 1,000, the company said. (Earlier, we theorized that Delaware might replace California.) With these two plants, Bloom will have substantial factory capacity.

At the time, Bloom said that 120 boxes had been deployed around the state. We have calls in and will keep you posted.

Tags: american manufacturing, bloom energy, delaware, energy efficiency, fuel cells, grid power, manufacturing, subisides