7.2.1. Current Sale Prices
Since the beginning of this project, one aim has been to find actual prices that manufacturers would be willing to sell their systems for – as opposed to projected, estimated or target costs. It should be of little surprise that this data was most readily available for ENEFARM systems, as their commercial development has now reached the state at which prices are openly displayed on distributors’ websites, and orders can be placed by those with enough money.
Price data has also been published in two other field trials of PEMFC systems, however only anecdotal evidence is available for the other technologies, as pre-commercial manufacturers remain secretive. Industrial-scale PAFC systems have been sold for decades and their prices are well known, however these do not give a valid indication of what micro-CHP systems would cost due to the non-linear economies of scale. The cost per kW for smaller scale systems is expected to be several times higher, as seen with other microgeneration technologies.[20]
Table 7.1 collates the actual sale prices of seven modes of fuel cell system which were found during the course of this work. No clear trend can be seen between technologies, as the differences in price are currently dominated by production volumes and system capacity.
Excluding the larger PAFC and AFC systems, it is clear that ENEFARM are offered at the lowest price, which is understandable as they are the most commercially developed micro-CHP system.
System Year Price Description Ref.
P
EMFC
ENEOS, Toshiba (0.7kW ENEFARM)
Sep. 2009
€22,500 Current sale prices in Japan, including local taxes. System includes a backup boiler and hot water tank, plus other ancillaries.
[81] Panasonic
(1.0kW ENEFARM) €23,900 [93]
GS Fuel Cell, Fuel Cell Power,
Hyosung (all 1kW systems)
2008 €80,000 Given as the current system price in 2008. (only available in limited trials in South Korea) [289] 2007 €70,000 Given as the individual price for the 70 demonstration units delivered in 2007. [112] Plug Power
(5kW) 2001-03 €55,000- 85,000 The average purchase and installation costs during the US Department of Defense field trials. [116, 290, 291]
SO
FC
Kyocera
(0.7kW) 2009 ~€70,000 per kW Mentioned in the METI technology roadmap and by Kyocera during the demonstration project. [88, 292] Sulzer Hexis
(1kW) 2000-05 ~€55,000
Mentioned as the cost of demonstration systems. The later Galileo model was described as “less
costly”, but no price was given. [148]
P
A
FC UTC and Fuji
(100+kW) 2001-08 €2800-5400 per kW The average sale price of industrial CHP systems.
[47, 193, 195, 293, 294]
A
FC (5-10kW) 2006 €10,000 per kW Quoted price from an anonymous manufacturer for a hydrogen fuelled CHP system. –
Table 7.1: Known sale prices for fuel cell micro-CHP systems. All prices have been converted to 2009 Euros with the following exchange rates: ¥145, $0.80, 1325 won to €1, and 2.5% annual inflation.
7.2.2. Breakdown of Manufacturing Costs
None of the above manufacturers were willing to give a breakdown of their current prices into materials, manufacturing, overhead and other costs due to obvious commercial sensitivities. The best approximation to current manufacturing costs was therefore found in a forward- looking cost estimate produced in 2004 by the group of ENEFARM manufacturers. This was made at a time when systems retailed for €84,000, and considered the reductions that could be made by up-scaling production volume to 10,000 units per year. The estimated manufacturing cost of the main generator unit is given in Figure 7.1, which includes the major systems integral to the fuel cell, but not the auxiliary boiler and hot water storage.
Figure 7.1: The breakdown of the projected manufacturing cost of ENEFARM systems at a volume of 10,000 per year, made by the five active manufacturers at the time. Adapted from [98, 295].
Two aspects of Figure 7.1 immediately stand out. The manufacturing cost of €14,345 is much higher than suggested by any other bottom-up cost estimate, and it is the trivial balance of plant rather than the stack or any major components that contributed the majority of this cost.
The level of cost reductions appears to have been predicted reasonably well, as sale prices have fallen from around €84,000 to €23,000 as annual production volumes rise towards 10,000. It is not unreasonable to expect that current sale prices are founded on a manufacturing cost around the €14,000 mark, as with the additional cost of a gas boiler and hot water tank this would give mark-up rates of around 45%,106 which is close to the typical low-volume mark-up rate given by Directed Technologies in [141].
The balance of plant consisted of the 30 or so valves, pumps, blowers and sensors that were depicted in Figure 2.2, plus pipe-work and other miscellaneous items.[89, 90] Other cost estimates have not ascribed such importance to these components, as they are thought to be trivial in comparison to the major systems. Directed Technologies were alone in estimating high costs for the non-stack components – suggesting €3,000 for a 3kW system, compared with €200-600 from the other sources listed in Table 3.3.[141] The majority of this cost was for hydrogen regulators, sensors, safety valves, water filters, pipes and pumps, which were “felt to reflect the significant cost contribution of multiple minor components”.[141]
106 Based on the estimated component costs given later in Table 7.8 – giving a total manufacturing cost of around €15,800. 17% 12% 5% 12% 8% 47%
Fuel cell stack Fuel processor Inverter Heat exchangers Assembly Balance of plant €14,345 total cost (at volume)
7.2.3. Projected Future Prices
In addition to publishing current prices, the manufacturers and agencies involved in the leading fuel cell demonstrations have laid out their expectations and targets for each technology, which are summarised in Table 7.2. It could be argued that these manufacturers are best placed to make predictions as they currently have the most experience with commercialising micro-CHP systems.
Systems Year Cost / Price per system Production volume Description Ref.
P
EMFC
South Korea
2008 €56,000 100 Expected price during the third and final year of the current demonstration project.107 [112] 2010 €12,000 Target cost stated in the Korean national action plan. [112] 2012 €8,000 cumulative 10,000 Target price set by the Ministry of Knowledge Economy. [289]
Japan
2004 €14,500 10,000 p.a. Estimated manufacturing cost for ENEFARM systems made by the manufacturers. 295] [98, 2012 €5,000 – 8,000 50,000 p.a. The METI technology roadmap for production
cost of residential cogeneration systems. [88] 2015 €3,500 – 5,000 500,000 p.a.
2015 €3,500 200,000 p.a. Panasonic’s target price for systems set in 2008. [296] 2020-
2030 €2,750 The METI technology roadmap for production cost of residential cogeneration systems. [88]
SO
FC Japan
2008 ~€3,800 production Mass Kyocera’s expected retail price for systems (including hot water tank). [297] 2015 €7,000 / kW thousand p.a. The METI technology roadmap for residential Several
cogeneration systems. [88]
2020-
2030 €2,750 / kW
Table 7.2: Expectations and targets given by the manufacturers and government bodies involved with world-leading fuel cell demonstrations.
The projections in Table 7.2 are substantially higher than those given by other sources; they are both closer to current sale prices, and have far less aggressive timetables for cost reduction. A striking feature is that neither the Japanese government, nor the manufacturers of PEMFC or SOFC systems expect prices to fall below ¥400,000 (€2,750), even in ten to twenty years’ time.
These differences can be explained by the scope of the targets and cost estimates previously mentioned, which do not consider all of the components required for a complete micro-CHP system. By focussing only on the fuel cell stack and/or other major components, these estimates do not give the total cost to the consumer, much of which comes from relatively simple mass produced components for which substantial cost reductions are not possible.
If a ‘system’ is defined as what the customer must purchase in order to receive a functional and controllable energy output (as it was in Section 2.3), then it cannot be restricted to just the stack, fuel processor, power conditioning and thermal recovery systems. Current pre-commercial and retail micro-CHP systems unanimously include an auxiliary boiler, hot water tank, ‘intelligent’ system controller, remote feedback systems for the user, and internet based communications for the manufacturer.108 While none of these components are essential, functionality would be seriously inhibited without them.