Can someone discuss if fuel cells are working on their price point in the market. I want to purchase a fuel cell for carbon reduction to provide my electricity but we are up against a financial hurdle when comparing technologies. Are fuel cell distributors working to reduce costs?
Good question. Fuel Cells are generally more expensive than engines or turbines. You can do a quick price comparison using the CHP Payback Tool under the Resource area of this website. It is worth noting that the Federal tax Credit is currently 30% for fuel cells. This larger tax credit should help overcome some of the capital costs. The 30% credit does have a phase out period and construction needs to begin before 1/1/2020 for the full 30%. The credit goes to 26% if construction begins after 12/31/19 and before 1/1/21, then drops again to 22% if construction is between 12/31/20 & 1/1/22. That tax credit ends on 1/21/24.
Remember that you can also use the bonus depreciation under section 179 of the tax code to write off 100% of the capital cost in the first year. The typical business is paying around 21% federal tax, so if you can write off 100% of the capital cost against income, this will save you 21% in tax you would have had to pay. Assuming that your business has income that exceeds the combination of the 30% tax credit plus 21% of the capital cost, you can fully realize both of these credits. Its 51% of the total cost coming back to you with the first tax return after the system is installed. This certainbly helps with the higher system cost.
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