“Will fuel cell micro-CHP ‘make it’ by 2020?”. This was the first question we posed to our contacts and network in the European fuel cell micro-CHP industry.
“What does ‘making it” actually mean?”. This was the second – and arguably more interesting – question we asked the same group.
We have our own view. But what did the industry say?
Well, there was some consistency with the majority defining ‘success’ as at least 70k - 100k annual sales by 2020.
At Delta-ee, our own annual sales forecasts out to 2020 put fuel cell mCHP sales in Europe closer to the low tens-of-thousands.
To get to the bottom of the more likely truth, we focussed our analysis on 3 main points:
- the market growth rates in the increasingly successful market of Japan,
- a close study of the cost curves,
- and an assessment of manufacturer/developer plans.
Gradually it became clearer that something “out-of-the-ordinary” would need to happen if fuel cell mCHP was to reach annual sales in the region of 70 – 100k.
But what exactly?
Here is our list of the top 3 things that would tell us that the residential fuel cell market
is about to take off in Europe…
1. Innovative business models appearing and thriving
There will need to be some success stories soon if the products are to be incorporated into a successful model in time. There are still doubts about how much value is actually in virtual power plant and utility ownership models. However, if we see one business model taking off, this could quickly spell a wave of similar offerings and get to volume sales very quickly.
2. Low cost product hitting the market
A race to volumes will help bring cost down – but there remains the tricky step of transforming from a ‘high-cost, low-volume’ product into one that will appeal to the wider market – not just the innovators. If we see a proven low-cost product (from Europe, Japan, US, or elsewhere) hitting the market, this could be a sign that a market is about to take off.
3. Seeing European Energy companies /and or Governments throwing their full
weight behind the technology
Energy companies and the national Government have been a major factor behind Japan’s success with fuel cell mCHP. In Europe, energy companies certainly have the ability to tap into their customer base and use their resources to drive fuel cell mCHP into people’s homes. But European Governments are becoming sensitive about backing a “single technology”, while most energy companies are remaining cautious and are still waiting to see what the others do. If an energy company makes a success of mCHP – or if a Government decides to introduce policies to stimulate the market (for example, a fuel cell micro-CHP specific incentives or legislation) - this could be the spark needed to start something promising for fuel cell mCHP in Europe.