Recent inclement weather and government laws mandating the installation of environment-friendly systems are bolstering sales of small fuel cells.
New analysis from Frost & Sullivan (energy.frost.com), North American Small Fuel Cell Market reveals that the market earned revenues of $234.6 million in 2006 and estimates this to reach $1.69 billion in 2013.
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Numerous government measures, including the extension of federal tax credits to industries implementing projects that use renewable energy and energy-efficient devices, are driving end users to seek fuel cell power. Fuel cells facilitate the transition to renewable energy sources by offering energy security and high efficiency.
By skipping the intermediate step of combustion, these devices provide a clean, quiet and highly efficient method for generating electricity and thermal energy from natural gas and other fuels. Moreover, the absence of mechanical devices such as turbines and pistons ensures that they run continuously for long periods and are far less prone to breakdowns.
“Meanwhile, fuel cell systems are receiving increased attention from the consumer’s sector because of the country's fragile power grid system,” says Frost & Sullivan Research Analyst Lucrecia Gomez. “The heavily taxed electric utility service is losing credibility, paving the way for fuel cells.”
Customers are willing to invest substantially in reliable and durable power devices to alleviate power fluctuations and outage damage. Fuel cells provide an effective solution to all their needs by ensuring reduced downtime and lessening the associated risks.
Fuel cell manufacturers will have to stay ahead of customer demand at all times and offer technically sound products to keep pace with evolving end-user applications. With major participants expanding into specific industries, they need to find ways to cater to the niche demands of vertical markets.
It is important to prioritize valuable development resources since different industries will be competing for the same. Developing and expanding the necessary technological functionality are critical when dealing with possible adverse market conditions.
Mere technological improvements will not sustain the market for fuel cells. Manufacturers will have to make concerted efforts to lower the high initial costs of the product to gain substantial uptake. To entrench themselves in the market, manufacturers have to produce cost-competitive and extremely efficient products.
Since the complexity of creating an affordable fuel cell reduces its general commercial viability, its uses are usually confined to specialized applications. Fuel cell companies are exploring new chemical formulations and innovative materials to facilitate the production of a viable commercial product. These companies are also looking to develop a global supply chain to deliver these benefits to consumers, as the demand for a single supplier for all battery needs is intensifying. Manufacturers need to choose a collaborator and build the required structure in the chosen country.
“Manufacturers can do this either by being acquired or by building their own international network to supply global companies,” notes Gomez. “As soon as companies have global presence, they will realize benefits of having standard business applications across those operations.”
The North American Small Fuel Cell Market is part of the Energy & Power Growth Partnership Service, which also includes research services in the following markets: distributed and centralized generation, alternative and renewable power, transmission and distribution, batteries and power systems. All research services included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants. Interviews with the press are available.
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