What happened

For several weeks now, fuel cell stocks have been rocketing higher, but few have moved higher, faster this week than energy-in-a-box company Bloom Energy (NYSE:BE), which was up 44% in the past four days alone.

This morning looked like it might be yet another big day for Bloom Energy, with the stock up a sharp 9.6% in early trading. As noon approached, however, Bloom seemed to be losing some of its energy, although it was still up about 1.3%.

Schematic outlining how renewable energy is converted into hydrogen and then back into electricity.

Image source: Bloom Energy.

So what

Investors' excitement about Bloom is partly, I suspect, a side effect of enthusiasm for peer fuel-cell company Plug Power (NASDAQ:PLUG). Plug experienced a boom last month when it announced a pair of acquisitions aiming to "capture the entire hydrogen valuation chain" from production to conversion into electricity, as one analyst put it.

But partly, this is also about how Bloom is responding to the competitive threat from Plug. After Plug purchased United Hydrogen (a producer of the gas), Bloom responded by tying up with South Korea's SK Engineering & Construction to develop a product for renewable hydrogen production so that in future years it will be able to compete with Plug in hydrogen production.

Now what

After seeing how much Plug shares went up on its hydrogen announcement, I'm honestly not surprised to see Bloom's stock react similarly this week. Bloom does, after all, have the technology to make this work.  

Its boxes at major American tech companies already use a sort of reverse electrolysis to fuse hydrogen with oxygen from the air to generate electricity (with water as a by-product). Its new venture will just reverse the process -- using electricity from wind turbines and solar panels to split water into pure oxygen and hydrogen, with the latter then fed into fuel cells to "recreate" electricity.

Still, while I understand the excitement, I can't get excited about the tech. Seems to me this whole "hydrogen economy" idea of electricity-becoming-hydrogen-becoming-electricity-again is a bit circular. It would make more sense to me to just generate the electricity (from wind or solar) and then capture it in batteries to be used as needed, cutting out the hydrogen intermediary as it were.

I could be wrong about this (and once one of these fuel cell companies starts generating consistent, growing profits, I promise to admit that). For now though, if you ask me, there's a reason Elon Musk calls fuel cells "fool cells." And it's not because hydrogen is an efficient way to power a renewable economy.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.