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.
With tax credits, it’s still cheaper to go solar or wind..