The potential environmental and economic benefits of fuel cell technology extend well beyond the automobile industry. A recent study commissioned by Ballard Power Systems and Plug Power and independently verified by the Center for Energy Efficiency and Renewable Technologies (CEERT) show that global greenhouse gas (GHG) reductions through the year 2025 from hydrogen and fuel cell technologies could be in the range of 30,000 to 115,000 kilotonnes. The analysis focused on fuel cell applications most likely to achieve near-term commercialization, including residential cogeneration, distributed generation, and backup power systems.

There are fuel cells installed in stationary applications all over the world, in a wide variety of locations, including hotels, hospitals, schools, telecommunications towers, breweries and in some parts of the world, notably Japan, in houses and apartment complexes.

Japan, in an effort to reduce its fossil fuel imports and lower GHGs, was the first country to undertake a large-scale hydrogen fuel cell R&D program – a ten-year, ¥18 billion effort that was completed in 2002. Since then, the Japanese government has continued funding numerous programs that focus on demonstrations, as well as research into the technical obstacles including hydrogen storage, codes and standards and components such as membranes and balance of plant. Japan is confident that, with continuing strong financial support, hydrogen fuel cells can become competitive within the next two decades.

The Ministry of Economy, Trade and Industry (METI)’s New Energy and Industrial Technology Development Organization (NEDO) has overseen a lot of the funding for fuel cell and hydrogen research, development and demonstration in Japan. Several of the programs focus on the stationary and residential markets, with demonstration programs that place fuel cells at the homes of utility customers for testing. The Demonstration of Residential PEFC Systems for Market Creation program allocated billions of yen from FY2005-FY2008 to install fuel cells at homes in cooperation with utility companies around the country. This program is collecting data – operating, failure, and efficiency, as well as customer input, to address technical problems, reduce cost and improve durability which will accelerate the commercialization of fuel cells. The targets set are lowering the price to ¥1.2 million per system and installing 10 gigawatts (GW) of power by 2020. A big draw towards fuel cells is the cogeneration factor – capturing the heat emitted by the unit for hot water and space heating – a process also called combined heat and power (CHP).

In the first three years of the program, more than two thousand low-temperature 1-kW fuel cells were installed in homes all around Japan, each with a period of operation of 2 years. The subsidy decreased every year, in 2005, it was ¥6 million per unit dropping down to ¥3.5 million per unit in 2007. Numerous utilities participated in the program and five fuel cell manufacturers - Ebara Ballard, Sanyo, Toshiba, Toyota, and Matsushita Electric Industrial Co. Ltd. (Panasonic subsidiary) - were all involved as well. Some units used LPG as the hydrogen feedstock, others natural gas and some kerosene. A survey of customers by Tokyo Gas showed that the majority of the participants were excited to be able to generate electricity on-site at their homes as well as for the environmental and economic benefits. The program has led to a price reduction of 20% so far and has generated more than 7 million hours of power.

The Demonstration of Residential PEFC Systems for Market Creation program ends in 2008, but government support will continue via the Strategic Development of PEFC Technologies for Practical Application project. Between 1,000 and 1,300 additional fuel cells are planned to be installed in FY 2009. The location area and scope are expanding, too. The Fukuoka prefectural government (located on Kyūshū Island), with partners Nippon Oil and Saibu Gas Energy Co., is set to install fuel cells in two housing complexes, one hundred in all, to provide power to 150 households.

Another benefit to these large-scale installations is to the fuel cell manufacturers. One of the main obstacles of fuel cell commercialization is cost, which can be driven down with larger orders and streamlined manufacturing processes. Many of the companies participating in these programs see the sales and revenue potential of the technology within Japan’s competitive energy market and are announcing large-scale production within the next few years. Matsushita recently announced they would offer units to homeowners in April 2009 for a price below ¥1 million and by March 2011, it expects to sell between 3,000 and 5,000 units, with a target of between 60,000 and 100,000 planned for March 2016. Ebara Ballard is expanding its Fujisawa plant to be equipped to produce 1,500 units beginning in 2009, ramping that up to 10,000 units a year by 2011. Toshiba has also announced plans to increase its production volume to more than 10,000 fuel cells a year by 2012.

Tokyo Gas has a model home on-site that showcases exactly what its customers have installed at their homes. Tokyo Gas works with both Matsushita and Ebara Ballard and packages the units as LIFUEL. LIFUEL’s specifications are 37% electrical efficiency and 50% heat recovery for a total efficiency of 87%. The units store 200L of hot water and are fueled by city gas. The model home, much bigger than a typical Japanese house, had both a Matsushita and an Ebara unit installed outside – the actual customers only have one. A remote controller inside the house shows all of the vital statistics in real time, including how much energy is being utilized. Upstairs Tokyo Gas created a mini-museum with posters and displays of the technology and its evolution. The décor and design of the entire house was amazing, I wanted to sneak away and hide so I could live there. Tokyo Gas also has a hydrogen fueling station on-site, as well as a few fuel cell vehicles.

Companies based in the U.S. or focused on commercializing products here aren’t targeting the residential market like Japan. The subsidies from the Japanese government are not only enabling the companies to manufacture units on a larger order scale, but also educating the public about fuel cell technology, reducing greenhouse gas emissions and reducing dependence on foreign oil. Hopefully other countries will follow the lead.