Commercial Demand for Fuel Cells to Triple by 2015

Global fuel cell spending -- including research and development funding and investment in fuel cell enterprises, as well as commercial sales -- is forecast to climb 10.9 percent annually to $10.2 billion in 2015 and then nearly double to $19.0 billion in 2020.  Commercial demand for fuel cell products and services (including revenues associated with prototyping, demonstration and test marketing activities, as well as actual product sales) will more than triple to $2.9 billion in 2015 and then triple again to $9.3 billion in 2020.  As a result, the share of total fuel cell expenditures accounted for by commercial demand will rise from one-eighth in 2010 to nearly half of all outlays in 2020.  Market gains will be driven by continuing technological advances, helping bring costs down to competitive levels in a growing number of applications, and bolstered by improved economies of scale as fuel cell manufacturers increase production. These and other trends, including market share and product segmentation, are presented in World Fuel Cells, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.

Commercial sales of fuel cell systems, which totaled 23,000 units in 2010, will expand exponentially through 2015 to about 1.6 million units and then rise another sevenfold to 11.3 million units in 2020.  Market gains are projected to be strong for most applications, but virtually all of this increase will be attributable to an explosion in demand for portable fuel cell systems, which will account for 97 percent of all unit sales in 2020.  The market for portable electronics fuel cells, most of which are currently utilized in niche applications like defense and educational toys, will be spurred by user frustration over the shortcomings of batteries as a power source, and declining costs will help make fuel cells an affordable alternative source of portable power.

Although fuel cells used in motor vehicle applications will account for only one-half of one percent of the total number of systems sold in 2020, they will make up the largest single share of demand in dollar terms.  A number of major automakers have announced plans to begin offering fuel cell vehicles commercially in 2015 or before, and sales are forecast to ramp up from what are currently extremely modest levels, consisting mostly of revenues associated with prototyping, demonstration and test marketing activities.  With a number of products already on the market, electric power generation applications accounted for well over half of all commercial fuel cell demand in 2010.