What happened

Fuel cell stocks are making another run higher in Friday trading, with shares of Plug Power (NASDAQ:PLUG) stock up 5.3% and Bloom Energy (NYSE:BE) up 10.9% as of 12:05 p.m. EDT. Meanwhile, FuelCell Energy (NASDAQ:FCEL) is up an even 10%.

That's probably not a coincidence -- it looks like FuelCell Energy is the one that sparked the rally.

Three colorful arrows racing straight up on a black background

Image source: Getty Images.

So what

By now you know the story. Fuel cell systems are being touted as the newest new wave of the future in renewable energy. By running hydrogen gas through a proton exchange membrane, fuel cells can generate electricity, and the only "waste product" from the reaction is water. Of course, none of this is particularly useful unless you've got some hydrogen fuel to begin with.

Aiming to get to the head of the supply chain, earlier this year first Plug Power, and then Bloom Energy, made moves to deepen their exposure to hydrogen production. Plug Power acquired United Hydrogen and Giner ELX in a move to "capture the entire hydrogen value chain" in June. Soon after, Bloom Energy teamed up with South Korea's SK Engineering & Construction to do the same thing.

Now, FuelCell Energy seems to be preparing to follow the same path. This morning, FuelCell announced that it has secured $8 million in Department of Energy funding to build a "SureSource electrolysis platform" that can produce hydrogen. FuelCell says the project "represents a key step in FuelCell Energy's path to commercialize its high efficiency solid oxide electrolysis technology," and investors seem to agree.  

Now what

More than that -- and more than just good news for FuelCell Energy -- investors today are taking the company's announcement of a really very modest-sized government contract as an indication that the hydrogen economy is just around the corner. Before you get too caught up in that hype, though, a couple of caveats need to be highlighted.

Interest in hydrogen as a fuel source is a real thing. In Canada, for example, the province of Alberta is gearing up to use its sizable natural gas reserves as a source of hydrogen for export. In Europe, governments are said to be planning to invest "hundreds of billions of euros" in hydrogen fuel cell technology. The thing is, Canada is looking ahead to 2040 as its target date for exporting the gas. Europe plans to make its investments not just in the next quarter or two, or 10 -- but "by 2050."  

In short, even if hydrogen proves to be the wave of the world's energy future (and I'd caution that it's a big "if"), there may well be decades to go before that happens. In the meantime, Plug Power, Bloom Energy, and, yes, FuelCell Energy are all losing money and burning cash in their attempts to make that future happen.

By all means, invest in the technology if you believe in it -- but beware: Gambling that these specific unprofitable companies will still be around 20 or 30 years from now to profit from a hydrogen future is a risky bet. Caveat investor.