The cost of domestic fuel cell micro-CHP systems

The cost of domestic fuel cell micro-CHP systems
Document type
Discussion paper
Author(s)
Staffell, Iain Green, Richard
Publisher
Imperial College Business School
Date of publication
23 July 2012
Subject(s)
Trends: economic, social and technology trends affecting business
Collection
Business and management
Material type
Reports

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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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