For those who want the punch line first, I am very bearish on MKTY because I think Plug Power will fail to come up with a product that has appeal to more than the tiniest niche market. There are a number of interrelated reasons:
1. Cost: PP has talked about the product retailing for around $10,000 initially, and then getting down to $3500 in mass production. There is excellent evidence that PP will never come even remotely close to those cost targets.
For example, the one company selling commercial fc's today is UTX's ONSI unit. It offers 250 kW phosphoric acid fc's for about $4000 per kW (before government subsidies) and reputedly loses a good bit on each one. It is not obvious how PP will come up with a lower cost per kW than UTX, which is considered one of the top engineering companies in the world (UTX includes Pratt & Whitney, Otis Elevators, Carrier AC, etc.). While phosphoric acid fc's by themselves might cost more than PEM fc's, they can get away with a much cheaper reformer, since they can live with a much greater percentage of CO impurities in the hydrogen stream than a PEM fc can. ONSI's reformer alone probably costs more than $500 per kW, and that is at a big 250 kW size; PP's will have be smaller in scale and much more complex, and thus will probably cost more than that per kW.. So looking at PP's 7 kW household unit, that is at least $3500 in costs for the reformer alone, before they have put a nickel into the fc itself.
Moreover PP is, IMO, wildly overstating the benefits of mass production. Much of a fc system are things like sheet metal, wires, pumps, heat exchangers, fans, etc., that are already mass produced for other applications, and won't get much cheaper per kW no matter how many fc's PP makes.
Don't forget to add in the cost of the battery backup, the electrician to hook the fc up to the electrical system and the plumber to hook it up to the natural gas supply. All in all, I think PP/GE will be lucky to ever get the installed cost down below $2000 per kW, and it would take massive demand to get there. 7 kW times $2000 equals $14,000 per unit, and that is without any profit margin for anybody.
Another way to look at it: The power generation technology of choice today is the gas turbine, which goes for about $500 per kW in massive 200+ MW sizes. The economies of scale vs. the household fc are staggering, yet PP claims it is going to make tiny, inherently more complex and expensive fc's at the same per kW cost. Not in this world.
GE's agreement with PP is essentially "Hey, if you can make 'em at certain cost targets, then we will sell them." GE will figure out sooner or later that the cost targets won't be met, and will walk, IMO.
2. Demand: Let suppose that I am completely wrong about everything above, and some number of years down the line one can buy a 7 kW PP unit for $3500 installed. Even so, I believe the demand will be minuscule compared to what people think it will be.
Essentially, this product has two target markets: users with no or expensive grid service, and regular homeowners who might want to replace their grid service.
If the price is low enough, the first group (people in third world countries, people in isolated farm houses, etc.) could be good customers. But that isn't a mass market, and the distribution and installation costs would be expensive, especially overseas. Solar systems already exist for these markets, so there is a limit as to how much can be charged for the fc.
As to the mass market of homeowners, that is almost certainly doomed. I don't believe there is anybody who lives close to the grid who wants to generate their own electricity. The grid is 100% reliable for most people; it will take a long time to convince them that a fc is too. And remember, if the fc goes down for any reason, its not like your VCR is on the blink - loss of electricity is serious - you won't have any heat in the winter or AC in the summer, not to mention everything else, until it gets fixed.
And if you think that a deregulated utility will let you just automatically switch to grid power, forget it - unless you pay some hefty ongoing fee and a huge cost for the electricity that you do buy from them. Why should they charge an ex-customer who bought their own fc the same as a good customer who hasn't? There go the savings.
So I don't think any normal household will want one, unless they are considered absolutely 100% reliable forever, and the savings in electric costs are huge. Most people's electric bills aren't high enough that even 100% savings would be enough to make them switch.
And without the mass market, it will be impossible to get the costs down enough to develop much of the isolated customer niche market.
3. Competition: Now, let us suppose I am wrong about points #1 and #2. Even so, I don't see PP making much money. PEM fc's are an easy entry business. Numerous other companies can and do make them. Competition will be fierce and margins slim.
Why hasn't Ballard, for example, announced a 7 kW size household unit? Is it because it doesn't know how to do one? No, it is because it knows that it is a stupid idea that will never be cost effective. But if it were, you don't think Ballard could? As far as I can tell, the only thing that PP has proprietary is the audacity to assert that household size fc's will ever make sense.
This goes for automotive applications as well. Yes, PP can make a fc that can be used in a car, but so can a lot of people, and there is no evidence that I have seen that PP has much or any proprietary advantage.
So I see PP as ultimately failing, dragging down MKTY with it. All this is just my opinion, of course, and I would be delighted to read intelligent commentary to the contrary.
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