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(JavaScript must be enabled to view this email address): February 24, 2010

Bloom vs. Solar: Which One is Best?

Corporate buyers and households will be asked to pick between fuel cells and solar. Here’s how they stack up.

Bloom Energy today formally unveiled its energy server, an industrial solid oxide fuel cell that can convert natural gas or other hydrocarbons into electricity pretty much on demand. 

And in the process, the company has ignited a debate over which of the alternatives to coal, nuclear and centralized natural gas plants might be best. Can we answer it today? No -- one of the pivotal factors will be how Bloom's servers (formerly known as Bloom Boxes) perform over time. Board member Colin Powell said at the unveiling that the company doesn't have twenty years of user data.

But we can speculate and compare. And here are some of the key things to keep an eye on.

Versatility and Up-Front Cost: A 100-kilowatt Bloom server array costs around $700,000 to $800,000, or $7,500 a kilowatt, after incentives that cover around 50 percent of the costs. The company hopes to have home versions that generate a few kilowatts and cost about $3,000 in ten years, but they don't exist now.

Bloom, however, doesn't scale down yet. It sells its 25 kilowatt boxes four units at a time. Home and small businesses need not apply just yet. Solar systems span the kilowatt and megawatt range. Ergo, when it comes to financing and flexibility, solar wins for now.

Can fuel cells scale down? Yes. Panasonic started selling home fuel cells in Japan last year that generate around 1 kilowatt, not enough to power a complete household, for $30,000 before incentives, or $15,000 if you factored in U.S./California incentives. ClearEdge Power has a 5 kilowatt fuel cell that costs $56,000 and drops to the $30,000 to $25,000 range after incentives. (Side note: Bloom's fuel cell produces mostly electricity and a little heat, while heat consists of half or more of the power from the Panasonic and ClearEdge fuel cells. Electricity is more valuable than heat, so for Bloom to be equivalent in price or less than these guys would be a victory for Bloom.) We're guessing Bloom is aiming for around $1,000 a kilowatt, which won't be easy. Ceres Power in England will come out with a fuel cell made in part with diesel components next year.

Energy costs: CEO and Founder K.R. Sridhar said the Bloom server will produce power for 9 to 10 cents per kilowatt hour after incentives in California. This price includes service, maintenance, gas and all of the other costs associated with running it. Commercial solar installations in California, when incentives and external costs are added, generate power for around 10 cents a kilowatt hour, according to Shayle Kann at GTM Research. Residential solar generates power for around 19 cents a kilowatt hour and utility-scale solar costs around 11 cents a kilowatt hour. Cutting-edge wind turbines can generate power for costs five cents a kilowatt hour after incentives, according to the American Wind Energy Association. Kann says that on average, wind costs a little less than solar.

Wind, thus, still wins this contest, and solar and Bloom are about tied. Bloom server buyers will have to contend with fluctuating gas prices: the box does not work if you don't put gas into it. If methane and biogas rise in price, so will the cost of running the box. Buyers, however, can likely insulate themselves with long-term gas contracts.

Cost reductions: This is a big question mark. Solar and wind are somewhat mature technologies. Nonetheless, incremental advancements -- better solar racking, cheaper thin films, more efficient turbines -- continue to bring down the cost of both solar and wind. Bloom is just starting out. Three years ago, the same box that now produces 25 kilowatts of power only produced 5 kilowatts. Scott Sandell, a Bloom board member and a partner at NEA, said the costs for Bloom have gone down 25x in just a few years.

Bloom, therefore, may have an advantage, because costs always drop the fastest in the beginning. On the other hand, Bloom is outnumbered. Thousands of engineers in various segments of the solar industry are working on dropping those costs. Do you believe in individual genius or crowdsourcing? That is the dynamic at play here and this will be one of the more interesting races to watch.

Maintenance. Solar wins here. Solar panels require a minimum of maintenance. Dust them occasionally and wipe off the snow and you are done. Bloom servers will be monitored closely by their initial buyers. The servers also contain fans and other mechanical objects. More handholding and repairs seem inevitable.

One of the big hurdles that Bloom will have to cross is the reliability of the ceramic/zirconium plates inside the fuel cell. These plates, which convert gas to electricity, must operate in an 800-degree Celsius environment without becoming distorted or corrupted. User data will be heavily scrutinized. Sources say that the plates have a lifetime of five years: replacement at this pace is contemplated in the 9 to 10 cents a kilowatt hour price. If replacement occurs at a faster rate, it could throw off the costs.

Warranty. Solar systems have warranties that last 20 years or more. Bloom currently offers a 10-year warranty. That discrepancy will definitely raise eyebrows.

Testing and certification. Solar and wind both have an advantage here. Underwriters' Laboratory and hundreds of utilities have tested and tinkered with photovoltaic panels and wind turbines for years. Getting a solar field approved mostly revolves around obtaining financing. Bloom will have to go through the proctology exam of utility reliability testing. That could take a few years. On the other hand, if Bloom passes these tests well, sales will zoom.

Carbon emissions. Solar and wind win again. It takes about four years to work off the carbon footprint of a solar panel. The Bloom server continually emits carbon dioxide. The Bloom server emits about half of the carbon dioxide that would be generated if you bought power from a power plant, but it's still carbon dioxide. Consumers can reduce their carbon footprint by stoking the box with biogas, but biogas remains an exotic substance. Most of the industrial gas sold and shipped in pipelines in the world comes from wells deep in the ground, not landfills or manure digesters.

Bloom's patents discuss converting the waste carbon dioxide into a methane-like fuel by running the carbon dioxide through the fuel cell and adding water. It's a fascinating but extremely challenging idea. Effectively, that would be like making energy from Gerolsteiner bubbly mineral water and some power. In today's press conference, Sridhar downplayed the carbon dioxide-to-fuel idea, which makes it sound like the idea might be on the far back burner. Still, Bloom represents a step forward compared to power plants.

Availability: This is Bloom's biggest selling point. The box can produce power 24 hours a day in a completely predictably fashion. Solar panels only produce during the day and wind turbines are only active about 30 percent of the time. Worse, wind turbines in many areas generate most of their power at night.

Storage: Advantage Bloom again. Fuel cells are by their very nature electricity storage devices. Power doesn't get made until gas gets released into the fuel cell stack. General Electric and others are trying to build sodium or lithium battery packs to store power at wind and solar fields but these are in the experimental stage.

Sridhar also mentioned that in about ten years, Bloom will add plumbing and other technology to its servers so that the boxes can convert water into hydrogen for more energy storage. Pulling this off will require electricity from an outside source, preferably from solar panels. Don't be surprised to see them team up with Sun Catalytix, an MIT spin-off with a catalyst for splitting water.

Competition: Bloom will have to face an array of competitors: General Electric, Siemens, Philips, Areva, you name it. The relatively small company will have to run fast to stay ahead of industrial giants or else face getting acquired. Solar and wind have already gone through this process. Solar and wind companies again can also license ideas and leverage partnerships. Bloom right now is sort of on its own.

Manufacturing footprint: The solar industry continues to work off a glut of excess factory capacity. Bloom needs to build its up. Solar, thus, wins for now, but for painful reasons. Although Bloom has raised around $400 million, it will need to raise more to build up factory capacity. As other companies have found, finding financing still remains tough.

56 Comments

  • Adam 02/24/10 7:25 PM

    Good grief, $7,500/kW is $7.50/W, a number solar beat a good while ago.  With cells pushing $2/W now, and zero fuel costs and near-zero maintenance costs for solar (and wind, though maintenance costs are higher), solar is currently cheaper, and reducing prices fast.

    Furthermore, this article compares apples and oranges when it comes to operating costs.  The Bloom Box costs 9-10¢/kWh for “service, maintenance, gas and all of the other costs associated with running it,” and this doesn’t count the purchase/installation cost.  The solar and wind numbers are almost entirely equipment and installation, with zero operating cost.  You would need to add depreciation to the Bloom Box cost to compare it with the 10-11¢/kWh quoted for solar (commercial/utility).

    24/7 availability is a great feature of the Bloom Box and other SOFCs relative to wind and solar.  But let’s compare apples to apples: if the SOFC operating cost equals the solar equipment/installation depreciation cost, then solar wins hands down—and wind even more so.

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      • StevePluvia 02/25/10 12:41 PM

        Adam, I’m not sure cost per watt is a fair comparison.  Solar for example may only operate an av of 6hrs per day therefore to get the avg household kwh of 31kwh/day you’d need over 5kw of PV; Bloom can run 24/7 and get 36kwh out of a 1.5kw system.  That said, I see Bloom as expensive and overreaching in their cost claims.

        Let’s reverse engineer their cost “claim” of $3k for a U.S. household:

        100kw Bloom Box cost = $750,000
        therefore 500w Box Cost = $3,250

        500w = 12 kwh/day; the avg U.S. household uses 31.2 kwh/day
        1500w Bloom Box = 36 kwh/day
        using current $750k cost of Bloom Servers:

        1500w Bloom Box = $9,750 (not $3k)

        As FDD noted, scaling down will certainly increase cost/watt, therefore it seems Bloom has a long way to go before they meet their $3k/house cost.

        One other consideration.  You’d need to run that Box 24/7 with a grid tie and net-meter utility agreement as 1.5kw system wouldn’t produce the on-demand power required for a home to operate.  To operate without a grid-tie you’d need a 3-5kw system (think $20-25k without bump for scale down.)  Even with a grid tie the utility may credit you less for power you produce off-peak as it likely won’t be used.

        All that and you’re still at cap-x cost.  Add fuel, maintenance and interest and you get a number you can break down over 10yrs to see what you pre-paid for your power.

        It seems Bloom is closer to a real product than others, assuming they don’t have massive failures, but they’d be better off not throwing out cost numbers that reek of a stockyard full of bulls chugging black coffee.
  • Michael H 02/24/10 8:55 PM

    While the grid is often maligned it is an incredibly flexible machine in terms of what type of power source it can use.  The grid can use fossil power plants, wind, solar, geothermal, nuclear. or Bloom boxes.  If you buy a Bloom Box…you gotta use a Bloom Box.  If you gotta use a Bloom Box, you gotta have natural gas (organizing a constant source of biogas is going to be a challenge except perhaps next to a cattle feed lot or a peat bog.).  Natural gas varies in its availability and can deplete very quickly.  Unconventional natural gas is dirtier in its extraction process (contaminates and uses a lot of freshwater). 

    Emissions:  In California, Oregon, Washington, Idaho and Maine, the Bloom Box is in most locations going to have HIGHER emissions than grid electricity because of the hydro and nuclear and very little coal.

    Unfortunately the Silicon Valley hype machine was in full operation, as the Google guys DO know better and the Ebay guys should know better.  BUT they all owe favors to John Doerr, so don’t raise questions publicly about this.  Innovation before everything else, including the environment.

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  • Tom 02/24/10 9:47 PM

    A combined cycle natural gas power plant is about 50 percent efficient-the same as the Bloom box. However, the Capex of a combined cycle plant is $500/KW versus the Bloom Capex of $7,500/KW. Lets see, that’s 15x. It seems difficult pencil the Bloom into any grid-connected scenario. When Sridhar refers to the Bloom as being twice as efficient as a traditional natural gas power plant, keep in mind that most new natural gas plants are combined cycle operating at the same efficiency as the Bloom,

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      • Craig 03/4/10 3:19 PM

        First let me state that I am not necessarily backing up the Bloom boxes claims, however, when comparing to Utility plants, you have to consider Transmission loss into your costs and CO2, also burning of gas produces more pollutants than the fuel cell, and with NEW Utility plants you have to consider Transmission lines must be built while they are not needed for a Bloom box and not likely for a centrally located utility mega Bloom box.  Also consider in many places, like California, how hard it is to get a new plant built (NIMBY).  I can see around 5 of these centrally located being used by Utilities to provide PEAK power and stabilization for their networks.  I can see these replacing diesel backup generators.  I could see these, with better storage solution, being behind a storage solution and turning on to take over the load and replenish the storage system before turning off again, thus making the most efficient use out of whatever fuel source you decide to use (unless of course after 10+ (20?) years) they make it economical to create your own fuel with a wind and/or solar solution. 
        Does it have a likely future?  Only time will tell. 
        Does it have a possible future?  I believe that, yes, it does. 
        Should it be given a chance?  Definitely. 
        Should it be scoured over meticulously?  Definitely
  • Bilsko 02/24/10 10:26 PM

    ” Natural gas varies in its availability and can deplete very quickly. ” Say what? Natural gas pipelines are far far more reliable than T&D wires!  Not just on an every day basis…just look at any major hurricane or blizzard in of the past few years and see which system was up and running.  Its funny that most places with natural gas fired onsite power joke about how they don’t even realize when blackouts occur… because the gas doesn’t stop even when the grid goes down.

    Emissions:  In California, Oregon, Washington, Idaho and Maine, the Bloom Box is in most locations going to have HIGHER emissions than grid electricity because of the hydro and nuclear and very little coal.
    Have you looked at ISO generation breakdowns for any of those states you listed lately?  California for one runs on a lot of coal…and Maine, ISO-NE is just as much natural gas as it is nuclear.

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  • Peter G. 02/24/10 11:37 PM

    Hey, Michael.

    I saw you on the ABC local news tonight giving a short sound bite from the Bloom event.

    That led me to your stories here, which are good, I think—they confirm what I assumed, which is that this is just another high-temperature combustion system, which makes it evolutionary rather than revolutionary. The costs are in line with other combustion methods, and far higher than larger-scale generation systems.

    So what the heck is the attraction here? The entire Bloom business plan seems to boil down to whether it’s better to distribute electricity or natural gas, and as far as I can tell by Googling around, both systems have 20%-30% in distribution overhead. In other words, there seems to be no real benefit for the customer to adopt the Bloom approach. It’s just different.

    I mention natural gas because I don’t think any other fuel is going to work in these things—oil has too many long-chain hydrocarbons, coal is obviously out of the question because gasification would double or triple the operating cost. Has Bloom said anything definite about the longevity of the system with more complex fuels?

    How can Bloom say it emits only half the CO2 of a regular power plant when it’s performing exactly the same chemical reactions at approximately the same overall efficiency? (As Tom said in his comment here.) Is this just a matter of Bloom conveniently overlooking the cost of getting fuel TO the Bloom boxes?

    And if Tom is right about the difference in capital costs between a natural gas-fired generator and a Bloom box, then this whole thing is not merely misguided, but insane.

    (Incidentally, if you haven’t looked into how natural gas is distributed, it’s a fairly hideous process for much of the country—they use natural-gas powered pumps based on internal-combustion engines with a level of technology that dates back to the 1920s or 1930s. I know a lot of people have been talking about replacing these, but I don’t know if that’s really happening or not.)

    Bloom’s patents related to reforming CO2 back into methane (natural gas) are ludicrous. That process consumes exactly as much energy as you get by burning the resulting fuel, PLUS the energy that is inevitably wasted in both directions. Otherwise it would be a perpetual-motion machine. Even if you powered the reformer from a fuel cell, you could still get better overall efficiency by just using the fuel cell as the original power source, and forget the natural gas and the Bloom box.

    Exactly the same reasoning applies to this notion of combining a Bloom box with solar panels to generate hydrogen. The Bloom box has absolutely no role to play here; there is no connection between the two concepts.

    So bottom line, for me at least, this is little more than a hoax. It’s just another way of rearranging the space, time, and money of electricity generation with no net benefit for anyone but Bloom.

    .              png

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      • Bilsko 02/25/10 12:56 AM

        Combustion?  Before making that type of comment…you should probably go take 5 minutes to check out how Fuel Cells work. Even if its just a look at the Wikipedia page.  When you get back, you’ll have learned how it is the CO2 emissions are considerably lower than a combustion process.  (Hint: Reforming CH4 to H2 + CO + CO2 doesn’t involve combustion)

        And the dated model for gas distribution is only matched by the vintage 1950s technology that we use for most electricity distribution in this country.

        There’s nothing hoaxy about this technology -SOFC have been around for 50+ years.  There’s also nothing special about this technology.
      • Peter G. 02/25/10 1:23 PM

        I appreciate the differences between an open flame and a solid-oxide fuel cell, but most people won’t, and even among chemists it’s really just a matter of convention. Both are exothermic chemical reactions. A fuel cell is only different in that it harnesses the reaction to generate an electromotive force.

        The only purpose (or effect) of calling a Bloom Box a “fuel cell” is to make people think of it as a source of clean hydrogen-based energy, which it most certainly is not.

        As for the CO2 issue, as far as I can tell, the only difference between how an open flame burns methane and how a SOFC burns methane is that the SOFC is naturally inclined to produce carbon monoxide instead of CO2. This is hardly an improvement, however, and CO is eventually oxidized into CO2 anyway. I would hope the Bloom box performs this oxidation step itself just to avoid the local toxicity problem.

        One way or another, I’m sure you’ll admit that exactly the same amount of carbon gets into the atmosphere.

        I call this a “hoax” because it appears that the company managers are deliberately trying to mislead the public about the efficiency and environmental effects of the technology. It isn’t what they say it is, thus, a hoax.
      • StevePluvia 02/25/10 1:54 PM

        Peter—VERY INTERESTING re: Bloom emissions.  It would be interesting to compare the efficiency and emissions between a Capstone CHP turbine and the Bloom Box.  I’m betting Capstone wins in cost, payback, efficiency, longevity and has relatively equivalent emissions…

        Bloom Emission Specs:
        http://www.bloomenergy.com/products/data-sheet/
        Capstone Specs:
        http://www.capstoneturbine.com/_docs/C65 & C65-ICHP NATGAS.pdf
      • Peter G. 02/25/10 2:51 PM

        Steve,

        Thanks for the link to the Bloom data sheet. It shows that the Bloom box emits very little carbon monoxide. Essentially all of the emissions are CO2, so that’s good. If I’m running the numbers right, Bloom’s rated CO2 output is exactly the same—to three figures—as the rated CO2 output of every other natural gas-powered generator.

        Which is no surprise, because where else is the carbon going to go?

        What we really need is a generator that takes in hydrocarbons and air, and emits power, water, and long carbon nanotubes in a variety of structural shapes. grin
  • Luke T 02/25/10 2:55 AM

    If Solar and wind are already cheaper than Bloom Boxes… and fuel prices are set to rise & rise then surely bloom will never compete.

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  • Don M 02/25/10 1:34 PM

    Solar and fuel cells are complimentary technologies. Duh. Solar needs a cost-effective storage system to reach it’s full potential. Fuel cells need a clean & abundant fuel source to reach it’s full potential. Soon these star crossed lovers will be getting down to Barry White and we’ll all be better for it.

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  • rooferguy 02/25/10 1:40 PM

    Fuel cells are all about ongoing costs.  Solar is all about up-front costs.  Let’s do some quick math to see how the numbers really compare.  The units are tricky, so I’d be happy if someone checks my math.

    A 100kw commercial system costs about $5/watt of installed capacity (no incentives).  In a year this system will generate about 1.5 kwh per watt of capacity.  Panels are guaranteed for 25 years.  So over 25 years the $500,000 system will generate 3,750,000 kwh, or $0.13/kwh.  For now let’s assume zero maintenance and zero salvage value.  Also assume an energy escalation rates about the same as the discount rate.

    A 100kw Bloom Box costs $15/watt of installed capacity (no incentives).  Let’s assume natural gas prices of $1/therm, 50% efficient operation (half electric output, half heat), and 29.3 kwh/therm.  On an ongoing basis, the fuel cell produces electricity at $0.02/kwh (1*.5/29.3).  Over the 10 year life of the fuel cells, assuming operation at 50% capacity and zero salvage value, the capital costs are $0.09/kwh (15/10*.5/365/24*1000).  Let’s also arbitrarily assume (since we have no other data), that maintenance costs are $0.02/kwh over that 10 year period.  Total costs are then $0.13/kwh.

    Coincidentally, commercial solar costs and commercial fuel cell costs are about the same — assuming no incentives.  There are two big differences, as Michael correctly points out.  First, costs of fuel cells will decline — but so will costs of solar.  It’s a crapshoot as to which costs will decline faster.  Second, costs of fuel will definitely go up — the advantage is clearly towards solar.

    Finally, based on my experience installing commercial and residential solar power systems, I expect that installation costs for small fuel cells (residential scale) will be much higher than expected because they may not always be integrated to the grid.  Unlike solar power inverters that shut down when grid power is interrupted, fuel cell generators will probably need to be installed so they power local loads only.  In other words, you will need to re-wire circuits so that the fuel cell cannot possibly backfeed the grid — it can only directly power appliances and lighting in the home as these appliances are used.

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  • Ski Milburn 02/25/10 1:46 PM

    I’ve got 4 kW of PV on my roof, and looking forward to putting a ClearEdge 5 kW fuel cell CHP unit in my basement someday.  I’ll harvest electricity in the daytime, manufacture electricity and hot water at night, use the grid to buy and sell the difference, and have heat and power when the grid is down (which is fairly often where I live).  So I see these technologies as complementary.

    Today, fuel cells are uneconomic, but costs are coming down rapidly and we expect them to reach grid parity in less than a decade.  Wind and solar are closer, have a ways to go, and their costs are coming down too.

    My issue with Bloom is not “Does it work?”  Of course it does.  There’s close to 100 companies around the world that are ahead of Bloom, not that you’d know it from their announcement.  Right now the Japanese are years ahead, and will most likely dominate global fuel cell commercialization if the Koreans don’t beat them to the punch.  Then there’s a bunch of Europeans nipping at the Asian’s heels.  Even though America is not leading this race, we’ve got a half-dozen or more companies that Bloom has to catch to have a chance at a Bronze medal.  Good luck to them.

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  • Chuck I 02/25/10 1:50 PM

    Several thing.  1. if the aim to move away from fossil fuels the answer is easy, solar.  2. Where is the plant located - is it in an area where solar or wind resources are adequate.  I firmly believe that it is not smart to leave the grid totally - you can use solar and wind and even fuel cell technology as the conditions dictate.  Solar and wind work both at a micro and a macro level, I do not know if a fuel cell can be scaled to a macro level.  The house that I am presently designing is based upon solar, wind with an assist from geothermal.

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  • Peter Williams 02/25/10 2:08 PM

    What happens to Bloom’s numbers, I wonder, if you scavenge some of the heat - even if you just run a water pipe through the middle of the thing…?

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  • XYZ 02/25/10 2:09 PM

    Curious: how can we be interested in both “cloud computing” (centralized) and “distributed generation” (decentralized) at the same time?

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      • Bilsko 02/25/10 3:16 PM

        Cloud Computing is the *exact* opposite of centralized.
      • Cedric B 02/25/10 4:02 PM

        Cloud computing was only made possible by huge technology advances in high-speed internet network infrastructure. In the energy world, transmission costs remain very high so distributed generation is very effective. Central power plants can be very efficient in producing energy, however if you include transmission losses DG becomes very appealing.
  • jcat 02/25/10 2:34 PM

    @XYZ. What? This question makes little sense to me. Centralized cloud computing and distributed power generation have little if not nothing to do with one another.

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  • Everton Jackson 02/25/10 3:03 PM

    Michael I think you overlooked one of the greatest advantages that the Bloom Box/Server will have over solar, especially at the utility-scale depoloyment; it will require far less space than solar. 

    Solar won’t be going away anyhow anytime in the future.  Integrated Solar-Bloom Boxes may be the next advance to further lower the cost of renewable energy.  Bloom Boxes may yet prove to be the best thing that ever happened to solar.

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  • Bilsko 02/25/10 3:15 PM

    rooferguy-
    Your solar estimates are pretty reasonable. 5,000/kw may be a tad low, but not by too much.  17 for the solar output is OK for most places in the country, but a bit high for some northern states. Overall, the solar assessment is fine.

    You’re off on the Fuel Cell analysis, though. (In a way that actually strengthens your case, but better to be accurate right?)  According to Bloom, there is no Thermal Output from the Fuel Cell.  The 50% efficiency figure is electric efficiency *and* its overall efficiency. So in fact, all you can rely on is kWe. The $10/MMBTU figure is a tad steep considering todays prices (and in most states where you’d want to install one of these, Gas
    Delivery Charges are waived as one type of DG incentive)

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      • Peter G. 02/25/10 3:59 PM

        Well, of course there’s some thermal output. There just has to be. The cell operates at high temperature and the reaction is exothermic. Even if there’s a big Thermos bottle around the whole thing (which might be a good idea), there still has to be some way to extract waste heat. The fact that Bloom doesn’t address this issue seems to be just one more way in which they are hiding unpleasant facts about their technology.
      • rooferguy 02/25/10 6:47 PM

        Thanks Blisko.

        The 50% efficiency factor I used reflects the fact that half of the energy released from the natural gas converts to electricity, and half to heat.

        Other posters correctly mentioned that this heat could be captured.  It’s a good idea, but would require some kind of heat exchanger around the fuel cell — increasing costs.  But if this heat were used for DHW or space heating, it would increase the usable efficiency of the fuel cell.

        Still, at the end of the day, a natural gas fuel cell has about the same environmental impact as a natural gas power plant — and probably about the same costs.  Solar is renewable and cheaper to operate.
  • XYZ 02/25/10 3:46 PM

    Apologies for posting this question in this article’s “comments” section - intended to post this in another GTM Bloom article, but it was too late to change, so am sticking with it.

    @Bilsko - If I use the term “centralization” to mean “outsourcing primary hardware and/or software requirements to a third party instead of taking the responsibility for these activities myself”, then cloud computing can be thought of as centralized, e.g., a handful of IT service providers, instead of thousands of individual IT departments with the end-user. Replace “hardware/software” with “electric power” and you have the current model for utilities.
    The key issue is: who is responsible for maintenance and troubleshooting? With distributed generation (Bloom and others), it may be the end-user taking care of providing the fuel and other resources necessary for maintenance.  Of course, if utilities themselves take care of the distributed generators, then the question is moot…

    @jcat - I understand that they are not directly related to each other. I was questioning the underlying philosophy behind anyone simultaneously pursuing a centralized approach towards one service (software), alongside a decentralized approach towards another (electric power), and how each approach could be justifiable.  The same arguments that are held up in favor of cloud computing could easily be used (with minor contextual modifications) to argue against distributed generation. Note that I am not in favor of one over the other, just curious to see what people think.

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  • jcat 02/25/10 4:06 PM

    @XYZ - Fair question, but first I’d say that the variables in any given complex end-to-end system may be quite different from those of other complex systems (computing vs. power generation, in this case). There are technical, cost, performance and other trade-offs when trying to evaluate centralized versus distributed for any system, most likely. Look at telecom routing/signaling systems, for example. It may be technically easier to store the network path information in a centralized server and then remotely populate the network nodes with that information to set up a data path, but the trade-off may be performance (i.e., slower than storing the information locally (distributed) in the control cards of the network nodes, which may also be more expensive). Point is that you have to look at these different systems based on what they’re tying to achieve and then engineer an architecture that is optimal given all the variables.

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  • Bill 02/25/10 5:13 PM

    Can I just say this article has it’s wires crossed? There is no point in comparing solar to bloom or and other fossil fuel technology based on cost per watt without taking into account the CO2 production of the bloom system.
    IF you want to compare Bloom boxes to something make it WhisperTech’s Co-generation systems or Captechs Turbines - both of these are more efficient ways of burning fossil fuels, unlike solar which is a renewable energy source.
    I was actually expecting this article to cover the CO2 production over the lifespan of the two systems (taking into account CO2 produced during manufacturing) not a bean counters back of envelope calculations.
    P.S. Bloom has the look of someone wanting to make money out of the green tech bubble with slick marketing - I hope it comes to more than that.

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  • Adam Baudelaire 02/25/10 6:20 PM

    Why do US houses use on average SO MUCH power? Here in Australia, electricity is even cheaper than in the US, we are predominantly building 4-5 BR homes these days, yet the average home uses only 15kwh/day here? It might get colder there in many parts but it gets HOT here. It can’t be environmental? Are Americans just really wasteful with power? It’s frankly embarrasing to here how much power they use. Perhaps the homes are just stupidly large? I think they need to start fixing this more than any other issue. You can live perfectly well in a 25 square house. Look at the average Japanese home. Whole families in tiny dwellings.
    As for the which tech wins argument, has everyone forgotten Ballard Fuel cells? They have been making coGen units for years (supplying power and heat from gas). From memory they were 1.5kw. I don’t know cost but they have been well funded for two decades or so. If this type of tech is able to be cost competitive, that’s the company to look at.

     Reply
      • Peter G. 02/25/10 7:10 PM

        Older US homes were built in the days of cheap gas and electricity; many had no insulation at all. Through inertia and custom, some of the same inefficient building technologies continue to be used today. For example, there is a strong prejudice against prefab housing in the US, in spite of the fact that modern prefab methods are both cheaper and higher-quality than the traditional methods. So you’re right that there are much better technologies available, but getting them adopted is way outside the scope of this discussion. grin
  • Deano 02/25/10 8:18 PM

    No mention of energy density in the Bloom vs. solar/wind comparison? If you can get 100 kw, 24/7 out of a set of boxes that look to take up maybe 150 sf, that’s a big advantage since it offers much more siting flexibility than any solar/wind application I’m aware of.

     Reply
  • Mark Miller 02/25/10 8:28 PM

    My wife and I went solar about 4 years ago (6.12kw system STS rating, 5.2 kw CEC rating, and an actual system output of 9600 kw per year).  We live in Northern California (PG&E land) and we were paying close to $.40 a kilowatt for our marginal energy usage back in the summer of 2005.  The California Public Utilities Commission (PUC) is currently evaluating a General Rate Increase (GRC) for PG&E for 2011.  “The bill for a typical customer using 850kw per month would increase by $17.44, or 10.6%, from $164.15 to 181.59.”  A typical 550 kw per month user is only going to see a 3.2% increase in prices from $74.13 to $76.50.  Those extra 300 kw a month cost a typical PG&E user an extra $105 a month (or $.35 a kw).  From a make/buy perspective any alternative energy system has a lot of opportunity here in Northern CA.  The current TOP tier for E-1 rate users (300%+ of baseline usage) is $.474 a kw.  So if Bloom, or a solar firm, can develop a system for residential users that will generate electricity at less then half what folks are currently paying PG&E the ROI would lead to a make choice. 

    We have a well on our property and I would be more then interested in a fuel cell to provide me back up power (say a 3000 kw true output capable system) that can operate on propane.  PG&E E-1 tarriff reference http://www.pge.com/tariffs/tm2/pdf/ELEC_SCHEDS_E-1.pdf 

    I think it’s great that Bloom is getting their product out in the field.

     Reply
  • Carl Hage 02/25/10 10:30 PM

    Comparing solar and fuel cell $/kW gets misleading quickly. As mentioned in the video, they really don’t compete. One of the main differences is that the cost/kWh given for the fuel cell assumes gas prices stay low, and the units are run 24x7. But the cost/kWh for solar assumes the panels work for around 5 hours/day. But demand is high during the day and inefficient peaker turbines generate power at expensive rates., and demand is low at night when there may be extra baseload power from more efficient plants that need to run at a steady power level. If you ran the fuel cell only 8 hours/day, the economics get skewed.

    So solar cells generate their kWh during the day with $.12-18/kWh rates (even more for residential time-of-day, up to $.41/kWh), but the Bloom box generates most of it’s kWh during off-peak. On the other hand, the fuel cell generates power when needed, independent of the sun and wind, so is very different. Add $1/W to solar and you can pay for batteries that would extend the peak solar usage time into the evening. That’s probably cheaper and 2x more efficient than a future Bloom box electrolyzer. Storage is not a feature of a fuel cell, and if used in reversible mode, it’s really inefficient. It’s cheaper to buy a real battery (e.g. NaS).

    The Bloom box uses natural gas, and that’s a substantial part of the total cost (I calculate $.06/kWh with 2008-9 average, but $.10/kWh fuel-only at peak 2008 rates). If there is a price on CO2, it’s even more. The Bloom marketing is wrong—Bloom box CO2 emissions are 48% higher than PG&E electricity (the supplier of Bloom/Google/eBay). (OK Bloom is less than coal electricity, but that’s not true for the installations cited.)

    Competition—being acquired is usually good for investors if the company is a success. The competition not mentioned, and most comparable to a Bloom box, is probably internal combustion engines or microturbines. For backup generators, biogas generators, and small combined-heat-power, ICEs are currently it. They are cheap enough so they don’t need to be used often.

    Cost reductions are the biggest question mark for solar and fuel cells, but also an opportunity.

    Also not mentioned—the big application is Combined Heat and Power.

     Reply
  • Mark Miller 02/26/10 11:32 AM

    Carl,
    Your are 100% correct that fuel cells and solar systems provide their energy in different ways (essentially constant rate for fuel cells and very time dependent for PV).  Back when we put our PV system in I found some excellent tools at the California Energy Commission web site to estimate the output of any combination of panels, inverters, by site specific locations.  To get a handle on the economic benefit a system would provide I found the Sharp web site below to be of great value.  There are a lot more choices from PG&E these days on what rate schedule you can select (we went with an E-7 net meter as it provided us the best return). 

    We were not allowed to have a battery back up system if we wanted to get the state rebate as the CEC/PUC and PG&E were supporting adding peak time capacity to the grid.  PG&E was to act as the battery .  Having lost power for a few days this winter- leading to lots of damage to my water system-  I am looking into ways to provide some energy to my PV system (which will not run if PG&E is down) so that I can access the energy that I do make.  Thanks for the comments on back up power. 

    http://sharpusa.cleanpowerestimator.com/default.aspx

     Reply
  • Craig Dwyer 02/26/10 11:35 AM

    The price of solar panels beat 7.50/W, but not including installation.  We’ll have to see where bloom goes from here.

     Reply
  • russ 02/26/10 12:32 PM

    1. Look at the photo on Blooms web site http://www.bloomenergy.com/products/resources/ 
    not much heat escapes if that is correct. They have several photos where there is no barrier between the public and the box at all - cool exterior then
    2. These things take time to come on line - not meant as an emergency generator
    3. İ didn’t see nay mention of turn down capability. When you are dumping power on the grid at a loss at night how much has to be dumped?
    4. John Doerr invested in it so everything is OK? That is a totally foolish statement - look at the mess Khosla has made in the ethanol area the past years. The investment pattern of a VC has as much meaning as chicken tracks. Doerr is pushing it now hoping to get other fools in so he can cash out maybe. He, like Khosla, is from silicon Valley - he must know a lot about energy? Come on!
    5. İf a 100 kW unit costs 700,000 USD then a 1 kW unit will cost what? 10% of that - it certainly will not be 1%.

     Reply
      • Peter G. 02/26/10 3:57 PM

        No, I’m sorry, I don’t care what it says on the Bloom website. This system generates both heat energy and electrical energy in roughly equal amounts. The heat has to go somewhere. The exterior of the box may be cool to the touch (as I mentioned earlier, it could be a big Thermos bottle) but that just means there’s some other exit path for the heat—an exhaust pipe, something. Maybe the CO2 comes out hot? I don’t know, but I know there’s heat coming out because the laws of physics require it.

        As for John Doerr, the complete answer may be summed up in one word: Segway.
      • ke6gwf 02/26/10 7:04 PM

        @Peter G. According to Bloom, the major difference between them and the other fuel cells is that they don’t produce large amounts of waste heat. They said that they run at higher temperatures than most for efficiency, but have found a way to reclaim the heat energy.
        If the chemical reaction is kept efficient through the plate chemistry combined with the reaction temperature, then the amount of heat released could be kept low enough to match what is needed to bring the fuel/air mixture up to cell temperature. Obviously the exhaust is going to have some heat to it, but it is stated it is no warmer than a car exhaust.
        Remember, they claim to have made a jump in technology, so until it is proved otherwise, I am going to believe their statements.

        Oh, and to the people trying to do the math about true costs for a home-sized unit. I believe what they said was that they are working on bringing the cost down through scaling the size, but also through production volume. In other words,  right now 100KW is $700k but they aren’t making very many. If they start mass producing them, the cost per unit will drop a lot, and then they can make the smaller ones affordable.
  • Be_Anon 02/26/10 1:16 PM

    I am waiting for the final verdict on this technology, which might take many more years. There is a lot hidden from us.

    This investment will either be the final nail in the coffins of John Doerr and Vinod Khosla or I will be doing some soul searching.

     Reply
  • Aaron 02/26/10 4:01 PM

    Interesting technical conversations but I think you have to keep in mind that Bloom is only a few years old. Remember solar when it first came out? It could barley power a light bulb and was VERY expensive. The Bloom Server will get even better and not to oversimplify but as it sits right now for their target customer i.e. corporate clients you are buying your own power plant not an add on like solar or wind. You can now power your company or data center 24/7 in the middle of winter. With other technology you still rely on the grid paying utility company prices when there is no wind or sun. The trial companies have reported already saving huge amounts of money and the servers are still in their infancy.It’s not meant for your mom and dad’s house just yet but give them time.

     Reply
  • Paul 02/26/10 5:32 PM

    I don’t buy their math.

    100KW x 24 hr x 365 days * 10 yr * 0.10 = $876,000 in electricity.

    If this thing costs $1,400,000 ($700,000 only after rebate), it would be almost cheaper to buy the power than to buy the unit alone, and I’m not even counting maintenance OR fuel costs in this.

    I used a lifetime of 10 years, per the warranty.  If the plates really have to be replaced after 5 yrs as suggested, and not >10, then this statement MUST be false:  “Sources say that the plates have a lifetime of five years: replacement at this pace is contemplated in the 9 to 10 cents a kilowatt hour price”

    100K * 24* 365 * 5 = 4,380,000 KWh

    $1,400,000 /  4,380,000 KWh = $0.32/KWh and we haven’t even added the gas cost yet????

    Either the numbers are wrong, or the economics don’t make sense.

    In order to get $0.10/KWh, including rebates, the unit needs a lifetime of $0.10 = ($700,000 + $6 * X hrs) / (100 * X)

    x = 700,000/4 = 175000 hrs = about 20 yrs (40 yrs without rebate)???????

     Reply
  • Rich 02/26/10 6:41 PM

    Remember the Delorean in “Back to the Future”. The engine ran on anything with carbon and hydrogen(garbage). Bloom’s device sounds a lot like that.

     Reply
  • Mark Miller 02/27/10 2:49 PM

    The firms that are the beta sites for the Bloom boxes are currently paying PG&E about $.23 a watt for their energy.  So a benifit calculation would be .23-.12 (it costs to get a kw from a Bloom Box) or it is $.11 cheaper per kw.

     Reply
  • Cordell 02/28/10 6:44 PM

    The entire comparison of wind/solar vs. Bloom fuel cell technology is specious.  For the next decade at least, Bloom boxes will target diesel electric generators supporting mission critical commercial uses such as data centers, phone network central offices, hospitals and 24/7 distribution centers.  This explains why Bloom’s marketing VP hails from APC and why its initial customers are Google, eBay, BofA (datacenter), Fed Ex and Staples (distribution centers).  Compared to diesel power generation, the Bloom boxes cut the initial installation cost and recurring costs by roughly half.  Diesel power generators, because of startup time, require a battery backup.  Both units require far greater maintenance than a Bloom unit which contains little in the way of moving parts or corrosive acids.  Moreover, diesel fuel prices are more than double natural gas prices.  Meanwhile, thanks to directional drilling and fracking technology, the U.S. has added 45 years worth of natural gas reserves in just the last 5 years.  In this environment, natural gas prices will continue to fall on a constant-dollar basis over the next decade.

    After the “low-hanging fruit” of mission-critical power generation has been plucked, Bloom’s technology will undoubtedly have progressed to the point were it easily undercuts wind or solar sans tax credits.  It’s not inconceivable that Bloom’s technology will rapidly progress at the same pace as it has over the last five years.  At this pace, costs per KW could decline to the point where it’s competitive with the utilities’ combined cycle gas generators.  However, unlike with central generating plants, home/office Bloom generators can also utilize all waste heat for space heating and hot water—advantage Bloom, particularly since this defrays a portion of HVAC equipment costs.  More significantly, residential rates currently average over $0.12/Kwh, a price which exceeds Bloom’s current generating costs.  With stable or falling natural gas prices likely in the decade ahead, (as explained earlier), one could see a scenario of rapid consumer uptake of this technology in new construction.

     Reply
      • Bill 03/1/10 4:05 PM

        An excellent point. Although they can also replace off-grid solar systems. These may not be that common in the US but Solar with battery storage is a popular method of generating electricty in Australian houses that are more than a couple of kilometers from the grid. If the price comes down far enough they could be installed in developing countries to provide first line electricity to the billions of people in the world who have never had it before. Similar to the Tata Nano?

        So the market could be huge! And, if it works to eliminate off-grid solar and could introduce a huge new market to something that still uses petrochemicals, fuel cells should be very popular with the oil and gas companies.

        To be more positive, they would make a nice alternative to an ICE in range extended electric cars like the Chevy Volt since they are very efficient and sound like they can burn a wider variety of fuels.
  • Fred 03/1/10 12:35 PM

    Agreed, in California especially,  the mission critical power that a Bloom box provides is a HUGE selling point.

    Plus with massive shale gas capacity coming online in the next decade, gas prices look to be more stable than grid power prices.

    The cost of a Bloom box will plummet after their “massive” factory in India starts production in late 2011.

    Looking for work? Bloom is hiring in India:

    “Khosla pointed to fuel-cell startup Bloom Energy, which is building a “massive” facility in Mumbai, and said that companies are building testing centers in India to take advantage of the country’s engineering talent.”

     Reply
  • martin 03/1/10 6:26 PM

    Interesting would be to combine PV and fuel cells. PV produces more electricity in summer and in winter fuel cells can produce power and heat. In summer it can produce power for evening peak and heat for hot water.

     Reply
  • James 03/1/10 11:43 PM

    Russ / @Peter G.
    I work right down the street from E-Bay. They do give off some heat. But nothing much.

     Reply
      • chester birchwood 03/2/10 1:23 AM

        Solar technologies can work for a lot of applicationd,but there are some jobs i encounter everyday that i am called to give estimates that solar could not work.I own new york solar systems llc in new york city and i can see applications for fuel cells on jobs that have too many solar shading
  • bob Freeston 03/2/10 11:54 PM

    Fuel Cell Technology makes a molten carbonate fuel cell that is 75% efficient, incorporating CHP.  It’s 300 KW scalable to 1 MW.  I think it is more advanced than the Bloom Box.  I think Engineered Geothermal Systems (EGS) may be the base load of the future.

     Reply
  • W Ross Williams 03/5/10 3:36 PM

    Has any one recognized that the Bloom Box operates at lower fuel efficiency than many nat gas fired small generators that can be purchased today for about 1000-1500/ Kw rated output? Other than the quiet operation, I’m not sure I get the advantage.

     Reply
  • Bo Varga 03/30/10 12:30 PM

    Two comments and two questions, (1) solar today is selling for $4/WP INSTALLED in Tokyo at the low end, $5 mostly, some $6 so some of the comments on solar costs are not correct and (2) what is the basis for assuming that Bloom works 24/7/365 (3) and for residential or other use is Bloom UL approved? How do you get insurance on a box that runs consistently at 800 C?  Assuming it runs consistently. and (4) what is the energy required to crank up to 800 C operating temperature - I assume this takes energy and relates to (2), if this Box turns off and on presumably power is required to get to operating temperature.  Finally the O&M for wind is non-trivial, I have seen numbers running from 8% to 20% annually of CAPEX, solar for large farms runs at 1%.  Interesting to see the real O&M for Bloom - a little sulfur in the natural gas? etc.

     Reply
  • Joseph Johnson 05/26/10 1:27 PM

    It sounds nice but remember, We are trying to cut and eliminate the carbon footprint all together on the planet.

     Reply
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