Will Hydrogen Fuel Ever Make Its Way to Your Home?

The hydrogen economy has been an engineering dream for decades, and while there are companies making it happen there are huge hurdles, too.

Jan 19, 2014 at 2:05PM

For more than a decade, the thought of a clean hydrogen-based economy has been the dream of engineers and environmentalists. In theory, hydrogen seems like a logical clean-energy source that can be used to power everything from lawnmowers to power plants.

But hydrogen hasn't taken off on a large scale, and outside of big visions from Honda (NYSE:HMC) and a few other automakers the hydrogen market is pretty small today. Here's a look at where we stand now and where hydrogen fuel may go in the future.

What we use hydrogen for now
The use of hydrogen to power vehicles or other electrical devices is currently pretty limited.

Honda Fc Stack Image

Honda FCEV Concept fuel stack. Image courtesy of Honda.

Honda makes a hydrogen concept car, and over the next few years Toyota and Hyundai are expecting to join that market. Even when they're released it's expected that they'll only be available in California, where there's some hydrogen infrastructure. Autos are a high-potential market, but hydrogen isn't even as developed as electrical vehicles, so there's a long way to go.  

FuelCell Energy (NASDAQ:FCEL) and Ballard Power Systems (NASDAQ:BLDP) both make the fuel cells that turn hydrogen into electric energy. FuelCell Energy makes primarily natural gas fuel cells and is targeting larger energy-backup services and large scale fuel cells. Ballard is more aggressive in the direct hydrogen-fuel space, providing everything from backup power to bus power systems to material handling fuel cells. 

Plug Power (NASDAQ:PLUG) is using hydrogen fuel cells to power primarily indoor-material-handling equipment like forklifts. The advantage over batteries is that there's no need to constantly remove fuel cells for a recharge; you just refuel like a car. The output from the equipment is just power and water.  

The vision is to expand into other equipment like transportation-refrigeration units, ground-support equipment (think airport-baggage vehicles), and range extenders for electric vehicles. FedEx recently gave some credence to the EV concept, ordering 20 fuel-cell range extenders for delivery trucks. Transportation is where a big opportunity is for fuel cells, but making hydrogen affordable and readily available for the industry is a challenge.

You can see that the companies making hydrogen-fuel cells are currently focused on relatively narrow markets. Even success in forklifts and backup power aren't exactly a guarantee that larger-scale applications will work for fuel cells.

Most hydrogen comes from natural gas
One problem with the argument for broader hydrogen use is that it's not as clean as people think. Most of the hydrogen produced today comes from natural gas, with some CO2 given off as a result. Sure, the hydrogen vehicle you drive may be 100% emissions free, but the fuel you're burning still comes from fossil fuels.  

In the future, the goal would be to turn clean energy power sources like solar and wind into hydrogen by using electrolysis or another chemical method, although that's proven difficult. If made economically viable, this would help these intermittent energy sources store energy and allow for it to be transported around the country. But we're years, if not decades, from that happening.

The bottom line is that hydrogen isn't as clean as the industry wants you to think.

You still need a battery to go hydrogen
The other challenge for expanded use of hydrogen is that it isn't as easily converted into energy as gasoline or electricity in a battery. It's a chemical process that usually requires a battery to store energy for on-demand use. 

Honda's fuel-cell drivetrain includes a battery, so what's the advantage over an electric vehicle? Hydrogen is really just adding more components to the process, and when you consider hydrogen is a dirtier source of energy than electricity, in many cases it hinders the value proposition. 

What hydrogen needs to go big time
Despite the challenges facing hydrogen, this is definitely the highest potential of all alternative energy fuel sources. If technology advances far enough to allow truly renewable energy to be stored and transported with hydrogen, then the fuel cell that's available today for forklifts may be viable in your typical passenger car.

One high-potential stock for your portfolio
Investing in fuel cells is still high risk and if you're looking to balance your portfolio with some safer stocks, The Motley Fool's chief investment officer has selected his No. 1 stock for 2014. You can find out which stock it is in the special free report: "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers