Fuel Cell Costs

Understanding the costs of fuel cells can be relatively complicated due to the fact that there are multiple different types of fuel cells and multiple applications in which they can be used. To understand their commercial viability, it is best to look at the cost of fuel cells based on their intended usage and the technology that they employ. We will look at several estimates for the cost of fuel cells including those from the U.S. Department of Energy and the European Union.

U.S. Department of Energy

According to the United States government, the primary reasons for the high cost of fuel cells are the premium fuel required and the components of the systems themselves. Fuel cells developed for the space program in the 1960s had a price tag of nearly $600,000 per kilowatt. However, during the last three decades, the SECA Cost Reduction Program has been put into place to bring the cost of using fuel cells in line with more conventional methods of generating electricity by the end of 2020.

The DOE estimates the current cost of generating electricity with the average fuel cell at approximately $100 per kilowatt. In order to become competitive with conventional means of generating electricity, the costs will have to drop $35 per kilowatt.

In industrialized nations, consumers pay between 5¢ and 10¢ per kilowatt hour for electricity obtained through the utility grid. Consumers pay slightly higher costs for gasoline engines for mobile use at 14¢ per kilowatt hour. By contrast, fuel cells from mobile use and transportation cost between $1.10 and $2.25 per kilowatt hour and for stationery use cost between 45¢ and 55¢ per kilowatt hour.

There are 10 core areas in which the U.S. government is attempting to reduce costs as follows:

  • Cathodes
  • Anodes
  • Coal contaminants
  • Interconnects
  • Seals
  • Contact pastes
  • Cross cutting materials and manufacturing
  • Fuel processing
  • Power electronics
  • Modeling and simulation
  • Balance of plant

The purpose of dividing research and development into these 10 court areas is to ensure that resources are used efficiently and industry teams do not engage in separate applied research programs on the same problems. This approach was also designed to ensure that only major issues are addressed.

The U.S. government is also using tax incentives to encourage private industry to invest in fuel cell technology. The Energy Policy Act of 2005 provides tax incentives for fuel cells with an efficiency greater than 30% and which generate at least 0.5 MW of electricity. These fuel cells have to be placed in service before January 1 of 2009 that will allow the taxpayer to claim the 1.5¢ per kilowatt hour credit for a five year time frame, indexed for inflation. In addition to tax incentives from the Federal government, there are also tax incentives from state and local governments. These tax incentives are relatively meager, encouraging the implementation of highly efficient and cost effective fuel cells. There are no restrictions as to the type of fuel the cell uses.

European Union

Since 1986 the EU has funded over 200 projects involving hydrogen and fuel cell technologies. This amounts to a total investment of over €550,000,000. The European Union has focused mostly on hydrogen fuel cells to not only meet the energy requirements of member nations but also to reduce the net output of greenhouse gases. The current cost of producing fuel cells in the European Union is estimated at €100 per kilowatt. The European Union as an 11 step research program focused on the following:

  • Cost reduction
  • Materials choice and utilization
  • Design and manufacturing
  • Balance of system components
  • System integration
  • Fuels, fuel quality and fuel processing
  • Hydrogen production, distribution and storage
  • System performance (durability, efficiency)
  • Testing, evaluation, characterization, product
  • Standardization
  • Socioeconomic research

The purpose of the EU plan is similar to that of the U.S. Dept of Energy. They wish to avoid redundancy and contain costs while ensuring forward progress. Unlike the United States, the focus of the European plan is on hydrogen fuel cells specifically as part of their goal is to reduce carbon emissions as much as possible. The plan looks to move from a fossil fuel based economy to a hydrogen oriented economy by 2050.

International Partnership for the Hydrogen Economy (IPHE)

The IPHE is a joint partnership between the governments of Korea, Japan, the United States, and the European Union. Their goal is to achieve cost effective fuel cell systems for transportation.

The IPHE has broken down the cost of fuel cell production into five categories, with a price range for each category factoring into the total cost per kilowatt of producing 500,000 units per year. In other words, the cost of producing 500,000 fuel cells per year is broken down in the following list by the cost of each category based on 2008 technology. The value of 500,000 is used because it provides efficient economy of scale.


Cost Range (USD)/kilowatt

Balance of stack (Support components)

1 to 15

Bipolar plate (cathode and anode)

5 to 15


10 to 30


3 to 11

Gas diffusion layer (GDL)

3 to 6


22 to 77

The actual price of production turns out to be much closer to $77 than $22, meaning the IPHE is still relatively far from its goal.

Zero Emissions Vehicles (ZEV): Battery Powered Vehicles (BEV) vs. Fuel Cell Vehicles (FCV)

In making comparisons, is often useful to compare apples to apples. However, before looking at the merits of BEVs versus FCVs, it is necessary to take a look at how each compares to the common internal combustion engine (ICE).

BEV vs. Internal Combustion

It is well known that battery powered vehicles are more expensive than traditional internal combustion engine vehicles. The primary reason is the high cost of batteries. By way of example, the Nissan LEAF is the most affordable electric vehicle currently available. Without subsidy, it has a total cost of 33,000 USD, which is roughly double the cost of a similarly sized gasoline powered vehicle. Besides the outright purchase price of the vehicle, battery life is generally estimated at five years, with an operating cost of 1800 USD per year. This compares favorably to the cost of operating a gasoline vehicle, which is 6000 USD per year. However, at the end of five years the battery we will need to be replaced. The U.S. government estimates the cost of purchasing a battery with a 100 mile range at approximately 33,000 USD. Clearly, the cost of a battery powered vehicle is substantially more in both short and long-term considerations than a gasoline powered vehicle.

FCV vs. Internal Combustion

In considering fuel cell vehicles it is important to note that only hydrogen power fuel cells fall under the zero emissions category. Fuel cells running on anything other than pure hydrogen may qualify as ultra low emissions vehicles, but not a zero emissions vehicles. With that in mind, it is necessary to compare the hydrogen fuel cell costs with those of an internal combustion engine. In doing so, it will also be interesting to compare the cost of an internal combustion engine running on hydrocarbon vs. an internal combustion engine running on hydrogen. Thus, there are three comparisons to be made:



Hydrogen Fuel Cell

$1.50 - $3.82

Hydrogen Internal Combustion

80¢ - $1.20

Hydrocarbon Internal Combustion (Gasoline)

 20¢ - 30¢


5¢ - 15¢
(this only includes electricity for charging)

It is important to note that the cost estimates in the chart above do not take into account anything other than the direct cost of fuel for these specific engines. Cost comparisons are inherently difficult due to the fact that the technology is constantly changing and there the vested interest on the behalf of various parties in presenting agreeable figures. As it stands, the total current cost of fuel cell vehicles is approximately the same as that of battery powered vehicles, both of which are substantially more expensive than internal combustion vehicles.


There is ongoing research by major government entities to make fuels cells competitive in terms of cost with other methods of energy production. The current goal is $35 per kilowatt for hydrogen fuel cells, which is roughly one third of the current cost. This does not factor in either the cost of producing pure hydrogen fuel or the cost of the infrastructure for delivering it. It is estimated that hydrogen fuel cells will not be competitive with internal combustion engines until least 2020.