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Home Fuel Cells to Sell in Japan

The outlook is iffy for cost reductions and consumer dividends

3 min read

After a number of false starts in the United States and elsewhere, fuel cells scaled to home heating and electrical needs may be nearing a commercial debut--at least in Japan. During the last four years the Japanese government has spent more than US $100 million on a program to demonstrate such systems, supporting the work of five companies, including Toyota and Toshiba. Now Matsushita Electric plans to start mass production of the system it developed in the program, with an admittedly modest sales target of 1000 units in 2009. Two other participants, Ebara Corp. and Eneos Celltech, are also reportedly preparing for full-scale manufacturing and marketing in 2009.

Fuel cells are environmentally friendly electrochemical devices that combine hydrogen and oxygen to produce electricity, leaving heat and water as byâ''products. (Typically, they can generate hydrogen from natural gas, propane, or kerosene.) Each cell has two electrodes, separated by an electrolyte. Hydrogen gas reacts at the anode, releasing hydrogen ions and electrons. The ions pass through the electrolyte to the cathode, while the electrons, blocked by the electrolyte, flow to an external circuit after an inverter converts them to alternating current.

The companies participating in Japan's program from 2004 to 2008 all concentrated on proton-exchange membrane fuel cells, in which a polymer serves as electrolyte. The advantages are compactness and low operating temperature, but their reliance on a costly platinum catalyst is a disadvantage.

Matsushita bills the 1â''kilowatt fuel cell it is commercializing as a cogeneration system to provide both heat and power, boasting that the system can generate electricity with a record-setting efficiency of 39 percent. In practice, however, the system is so small and produces so little power that initially it will be used primarily for water heating. Matsushita expects that in the usual household it would be operated once daily, to heat a 200-liter hot water tank. Nevertheless, scaledâ''up and improved versions may someday supplement the home's electricity significantly and even provide surplus energy that can be sold back to the grid.

Matsushita has yet to set prices for its fuel cells, which are sold to power companies that then lease to consumers, but to judge from Japan's experience with the proton-exchange systems so far, they will be a pricey way to warm water. According to Atsushi Yamamoto, a deputy director with the Ministry of Economy, Trade and Industry (METI), distributors of the fuel cell systems were given a subsidy of roughly $55 000 for each unit installed in 2005, the first year of the project. The amount has subsequently decreased each year and is now about one-third that figure. ”With commercialization beginning next year, we are entering a new phase, so how best to continue subsidizing is under discussion,” says Yamamoto. ”But it will be less than the current subsidy.”

Even at the present level of subsidies, a Matsushita system might pay for itself only in 10 years or so. So for home sales of fuel cells to really take off, costs must come down rather sharply. The project's road map calls for a price tag of around $9000 by 2010 or 2011; Matsushita says it hopes to get its selling price to energy companies down to approximately $5500 by 2015.

So far, Japan's regional energy suppliers have installed just 3700 units for field testing in the METI program. By 2010 METI expects from 20 000 to 100 000 systems to be installed, but Yamamoto concedes that, due primarily to higher-than-expected costs, those targets are much lower than original predictions. He thinks that Kyocera may have a better chance of reducing costs in a solid-oxide fuel cell it's been developing, also with METI support, because that system does not use platinum.

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