Author: Richard Martin

For the fuel cell industry, 2011 was a decidedly mixed year. On the positive side, total shipments broke the 20,000 barrier for the first time, thanks to a 2009-2011 compound annual growth rate (CAGR) of 83 percent. This aggregate figure, however, hides the fact that the fuel cell industry has continued to exhibit a growth/contraction pattern.

In 2011, for example, system shipments in the portable fuel cell sector contracted by 16 percent on a year-over-year basis, and the sector lost a large number of companies. According to a new report from Pike Research, a part of Navigant’s Energy Practice, the fuel cell industry, including all applications in the stationary, portable, and transport sectors, will reach $15.7 billion in 2017. A number of challenges must be overcome for that figure to be achieved, though.

“Many companies in the portable sector have exited the space or are diversifying to bolster revenue. The transport sector continued to grow in 2011, but the continued movement towards the launch of fuel cell light-duty vehicles in the 2015 timeframe has created a gap between today’s ambitions and tomorrow’s potential.”

“While the fuel cell industry posted growth last year, vendors still face significant headwinds,” says research director Kerry-Ann Adamson. “Many companies in the portable sector have exited the space or are diversifying to bolster revenue. The transport sector continued to grow in 2011, but the continued movement towards the launch of fuel cell light-duty vehicles in the 2015 timeframe has created a gap between today’s ambitions and tomorrow’s potential.”

The 2014-2015 timeframe remains critical in terms of transitioning from a niche industry to moving into the mainstream, Adamson adds. Costs for fuel cell stacks remain much higher than those of incumbent technologies. The industry is at the beginning of the cost curve, and major cost reductions are to be expected over the next 5 to 10 years. At present, however, the report concludes that fuel cell producers are largely limited to subsidy-strong markets (e.g. California for stationary power) or high-value early adopters (e.g. business users who travel frequently and carry external battery rechargers).

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