The cost of domestic fuel cell micro-CHP systems
- Document type
- Discussion paper
- Staffell, Iain Green, Richard
- Imperial College Business School
- Date of publication
- 23 July 2012
- Trends: economic, social and technology trends affecting business
- Business and management
- Material type
Numerous academic and industrial estimates place the cost of a future mass-produced small stationary fuel cell system at around $1,000 per kW, which compares well with targets set by agencies such as the US Department of Energy. Actual sale prices for domestic microgeneration systems do not fit so neatly with these targets, and are currently 30–50 times higher, even though mass production began three years ago.
This paper explores the void between academic projections and commercial reality. It presents a systematic review of cost data from manufacturers in Europe, Asia and the US, along with near-term projections from manufacturers and other relevant organisations. Using these data, the potential for cost reductions through industry scale-up and learning by doing are quantified. The minimum feasible price of a typical 1 kW natural gas combined heat and power system is then estimated from industry data.
Based on the findings, even a heroic effort by industry is unlikely to reduce the price of small domestic-scale systems to the $1,000/kW mark. By aligning the scope and boundaries of cost estimates with the realities of a practical system, we show that a long-term target of $3,000–5,000 for a 1–2 kW system is more realistic, and could feasibly be attained by 2020 at the current rate of progress.
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