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Fuel Cells Lose Out In Latest Round of Connecticut's Clean Energy Picks

FuelCell Energy, Inc.
A 1.4 megawatt fuel cell built by Danbury-based FuelCell Energy. Fuel cell projects were overlooked in the latest round of clean energy proposals selected by the DEEP.

Connecticut is home to several fuel cell manufacturers whose products are competitive on the global market, but state officials still overlooked fuel cell technology in the latest round of picks for clean energy development.

The big winners were wind and solar.

Connecticut's Department of Energy and Environmental Protection gave the green light to proposals in Connecticut, New York, Massachusetts, Vermont, Maine, and New Hampshire.

But no fuel cell projects were selected, despite Connecticut being home to a number of internationally-recognized manufacturers.

In a statement, the DEEP said selection criteria was "weighted" toward price, which in a market filled with cheaper wind turbines and solar panels, made it "difficult for fuel cells to compete."

But Jeff Osborne, a research analyst covering clean energy at Cowen and Company, said it's possible "the rates of return of these projects might not be that high."

That's because demand for solar is growing, he said, and developers of solar farms might be forecasting price dips for panels that are unrealistic, which could create scenarios where developers need to borrow money -- as interest rates go up.

"Some of the projects that are being aggressively bid around the world, and maybe in Connecticut, likely won't get built," Osborne said. "Either because the projects become upside down -- meaning the developer won't make money, or the developer doesn't get access to the land -- and that's quite frankly the biggest problem with solar."

Joel Reinbold, with the Connecticut Hydrogen-Fuel Cell Coalition, said reliability is another problem.

While solar and wind are beneficial, when it comes to selecting clean energy projects, Reinbold said selection criteria should be refined beyond immediate cost.

"We're using low cost without considering the backup needed for some of those other power supplies," he said.

The 25 projects recently selected by the state will still need regulatory and siting approval to move forward.

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