In 2010, the Bloom Energy fuel cell, powered by natural gas, $400 million in cash from Kleiner Perkins Caufield & Byers, and a 60 Minutes piece sucked most of the air out of the fuel cell market space, column-inch wise.
Natural gas fuels the Bloom Box with low-carbon emissions and efficiencies in the range of a natural gas genset. But the pricing of the Bloom Box could be considerably more expensive if you consider the NG genset as the competition.
Bloom claims its "server" generates power for 7 cents to 10 cents per kilowatt-hour after incentives, a calculation that includes fuel, maintenance, hardware expenses and, most importantly, government incentives. Sometimes the cost is even lower. Adobe installed 12 Bloom Boxes and produces power for 8.5 cents per kilowatt hour -- and it uses more expensive biogas. Adobe traditionally has to pay PG&E 13 cents a kilowatt hour at its headquarters.
But how do you get to that figure?
The unit cost usually mentioned for Bloom's 100-kilowatt solid oxide fuel cell (SOFC) is approximately $700,000. The company will have shipped in the neighborhood of 100 pieces by the end of 2010 to marquee customers such as Walmart, Google and FedEx. That's a significant amount of revenue for a young company, possibly on the scale to get to an IPO in 2011. An SEC filing for a proposed IPO would reveal how much the Bloom Box costs to build versus its selling price.
We've received a bit of clarification on the price from a trusted source who has seen a price quote from the firm.
According to the source, the price for a multi-100-kilowatt system including installation, shipping and California sales tax is $10 per watt. Add to that a ten-year warranty that will run you $2.50 per watt for a total of $12.50 per watt before incentives. And you'll need a warranty because the fuel cell stack is destined to foul and will require replacement in five to ten years. (It is interesting that the warranty is priced separately. We weren't aware of that.)
In the U.S., fuel cell incentives include a federal tax credit for 30 percent of the cost of a fuel cell. California kicks in another $2.50 per watt. That gets the Bloom Box down to about $6.25 per watt, or $625,000 for 100 kilowatts, not including sales tax. (Wiggle room on numbers exists here -- we've called Bloom but have not yet heard back.) Put another way, without incentives, it's one of the more expensive sources of energy around. With incentives, it's more expensive than solar but can provide baseline power and run data centers, something solar couldn't do without battery packs or other energystoragetechnologies.
In addition to natural gas gensets, the competition for the Bloom Box could be considered to be the microturbines from firms like Capstone Turbine, which have a sales price of less than $1.00 per watt and are about $1.25 per watt installed, according to advocates. Capstone had a backlog of orders totaling $83 million in November, but microturbines also remain a work in progress.
Declining prices, government incentives, demand for cleaner power and improving technology have begun to revive the fuel cell industry. But until carbon is aggressively priced, it would seem that Bloom -- like some other alternative energy technologies -- has a long way to go on competitive pricing without incentives.