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.
From the CHP Blog…
Understanding CHP and the Cost of Installation
A growing desire to conserve and preserve the environment, combined with the ever-present desire to cut costs and improve efficiency, has organizations in every industry considering alternatives to conventional electrical and thermal energy production. In addition to...
Finding Success in Remote Locations with Combined Heat & Power
Problem statement Similar to other integrated natural gas utilities, ATCO has numerous natural gas regulating stations in remote locations throughout the province of Alberta. These stations have onsite instrumentation but seldom have access to grid-tied...
How to get almost 1/3 of the cost of your Combined Heat & Power (CHP) capital costs back in the first year of operation through tax incentives
CHP or Cogeneration is simply the generation of electricity and use of the waste heat that is created during the process of making electricity. Businesses love CHP for the money saved on energy costs, energy independence and resiliency. There are capital...