Fuel cells are already powering hundreds of installations world-wide from cell phone towers to large scale facilities. In the United States fuel cells are providing low-carbon electricity to businesses such as Whole Foods grocery stores in New England and Sierra Nevada's brewery in California. Fuel cell power systems can also be used to generate power in your home.

Potential market for residential fuel cells and combined heat and power systems.

Elizabeth Delmont | Fuel Cells 2000

While there are few commercially available residential fuel cellproducts in the U.S. yet, Japan and Germany has already seen success in this emerging market.
Fuel cells can be a great way to generate grid-independent energy for a home through “combined heat-and-power” (CHP) systems. A CHP system is a hydrogen fuel cell that generates electricity, but the so called “waste heat” generated is captured and used to heat the home and its hot water. By using the waste heat, the overall efficiency of the system is greatly improved. In Japan, where Osaka Gas in conjunction with Panasonic and other companies is offering residential fuel cell systems, the energy grid is only 40% efficient. The Osaka Gas fuel cell system is approximately 35% efficient. But, when the waste heat is captured and used for heat and hot water, the overall system efficiency is 85%. The average efficiency of the US electrical grid is approximately 35%, and Plug Power, a US company making residential fuel cell systems, estimates that the grid plus a typical home heating system runs at 44% combined efficiency, so a CHP fuel cell system can significantly increase the efficiency of the electricity your home uses.
In recent months the Japanese government has made strong commitments to reducing the nation’s greenhouse gas emissions. Japan is aiming to reduce emissions to 15% below 2005 levels, by 2020. Fuel cell systems are seen as a way to help achieve this goal. Japan has been actively pursuing fuel cell research for years, and has had a lot of technical success. Residential CHP fuel cell systems were first put into homes in 2002. Recent technological advances and increased incentives for clean energy have created more interest in the residential fuel cell market. Tokyo Gas has sold and installed over 800 CHP fuel cell systems through August of this year, and the company aims to install 2100 by years end. Osaka Gas also began offering residential CHP systems this year.
The German government has set a greenhouse gas emission reduction target of 40% by 2020. Fuel cells are set to play a large roll in these reductions. Germany has plans to invest in a hydrogen infrastructure to support fuel cell vehicles. Residential CHP fuel cell power systems are also part of the portfolio. In 2008 Germany launched the Callux program to support residential CHP systems. Phase I of the program runs until 2012 and will install CHP systems in homes across the country. The plan is that these installations will support Phase II, or commercialization of these fuel cell systems.
Currently, there are few commercial options for home-owners looking to install a CHP fuel cell system in their home in the US, but more and more companies are creating these products. ClearEdge Power offers the ClearEdge5, a compact CHP fuel cell system for homes. The system has an internal fuel processor that turns natural gas into hydrogen, which powers a fuel cell. The carbon and monetary savings depend on where you live, but a typical California user can save 39 cents per kW and reduce carbon emissions by one-third, according to calculations done by ClearEdge. The unit can be installed anywhere in, or outside of the home, and is virtually silent, making it a great option for those who wish to be more grid-independent. Plug Power offers two GenSys residential CHP systems. The fuel cell runs off of natural gas, and can generate enough electricity for the entire home. Plug Power created the system so that the waste heat captured is compatible with most radiant, forced air, or baseboard heating systems. The company advertizes energy savings between 20-40% and carbon savings of 15-25%. In July, 2009 Plug Power announced a $1.4 million dollar award from the New York State Energy Research and Development Authority. Plug Power will use the award to install and operate three residential GenSys CHP systems in homes in New York State. The installations will test how the systems work in a real world setting. Hydra Fuel Cell Corp., a company out of Oregon, has installed residential fuel cells in Texas and Florida as part of a beta test.
The price of residential CHP fuel cell systems can be high, in the short term, before energy savings are realized. To help consumers the federal government and states offer tax incentives to those who install CHP fuel cell systems. Currently, tax incentives for stationary fuel cells favor business and joint occupancy dwellings. Single family homes, or even second homes, do not receive as much of a tax credit. To lessen this disparity, Congressman David Wu and Congresswoman Mary Bono-Mack have cosponsored the Fuel Cell Tax Parity Act of 2009. This bill would amend the current tax code to create parity between residential and commercial fuel cell tax credits. The bill would also remove the requirement for residential fuel cells that the system be installed in a primary residence. The current tax credit for single-family residential systems is 30% of installation cost, up to $1,000 per kW. If this bill passes, it would mean larger tax incentives for home-owners who install fuel cell systems, to an incentive up to $3,000 per kW.1 For joint occupancy residences, the tax incentive would go up to $10,000 per kW.
States and utilities are also offering incentives for home-owners to install green energy systems. In California, the Emerging Renewable Rebate Program gives cash rebates on fuel cell systems that use renewable sources of hydrogen. California customers of San Diego Gas&Electric, Pacific Gas&Electric, Southern California Edison, and Southern California Gas are eligible for rebates from the Self-Generation Incentive Program (SGIP). The SGIP is a financial incentive for the installation of new, self-generating, equipment installed to meet some or all of the energy needs for a facility. For fuel cell systems using hydrogen from non-renewable sources the incentive is $2.50 per watt of out put. For a Plug Power system that has an output of 2.5 – 5 kW the incentive would add up to $6,250 to $12,500. In New York, fuel cells installed in a principal residence are eligible for a 20% tax credit up to $1,500. However, the systems must be a proton exchange membrane fuel cell that produces at least 25 kW of energy. Many other states have green building, renewable energy, or alternative energy tax incentives and grant programs to help consumers.
Although the initial price tag of a residential fuel cell system might be high, tax incentives and energy and carbon savings are making these CHP systems attractive to many consumers. Because CHP systems are so efficient, users can see immediate energy savings. For those people looking to make their homes greener, or be totally grid independent, CHP fuel cells systems are an attractive technology. Currently, ClearEdge is focusing on the California market, and Plug Power is testing in New York. As these early adopters show the benefits of fuel cells, hopefully we will start to see residential CHP fuel cell systems in homes across the country.
1 If you would like to write your Congressman or Senator about this issue, visit http://www.capwiz.com/fuelcells/home/

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