For decades, hydrogen fuel cells have been a dream energy source, combining the abundance of hydrogen as an element with the clean conversion of it to and from a source of stored energy. But on a practical level, the technology has never really gone mainstream. 

That's changing slightly as automakers begin to launch hydrogen-powered vehicles, but they're going up against the highly popular electric-vehicle market. Is hydrogen a fad investors should look past, or the next big thing in energy? Three of our energy analysts debate. 

Adam Galas
In my opinion, as Tesla Motors (NASDAQ:TSLA) founder and CEO Elon Musk has said, hydrogen fuel cells always have been, and will always remain, "the fuel of the future." Specifically, there are three reasons I think this technology will never assume a major role in the world's energy mix.

First, there's simple physics. Hydrogen isn't an energy source, but an energy carrier. In other words, fuel cells, which generate electricity by combining hydrogen and oxygen to create water, are nothing more than an overly complex battery.

To use fuel cells to power anything, whether it be electric cars, homes, or industries, first requires energy to make hydrogen. Next, more energy is required to compress and store the gas, as well as transport it. Each step has unavoidable losses that result in less energy efficiency and higher costs than simpler, conventional batteries.

Hydrogen fuel generating equipment.

Image source: Getty Images.

Next, to create a hydrogen future would require immense investment in extraordinarily expensive infrastructure. For example, California, one of the world's leading proponents of automotive fuel-cell technology, has pledged to invest $100 million to build just 100 hydrogen fueling stations by 2020.

The state is supposedly working with numerous car makers, including Toyota Motor Corp. (NYSE:TM). Toyota just launched its Mirai fuel-cell car via eight dealerships in L.A. and San Francisco, and hopes to sell 3,000 of these vehicles through 2017.

The problem is that the state has been making such promises for almost 20 years, and thus far California doesn't even have 20 hydrogen fueling stations, despite having spent tens of millions of dollars.

Musk calls fuel cells "mind-bogglingly stupid" and claims that car companies such as Honda, Toyota, and Mercedes are pushing this technology purely as a low-volume compliance measure to meet California's strict zero-emission requirements.

Granted, Musk has a vested interest in a competing technology, but given that EV charging stations cost as much as 100 times less than hydrogen fueling stations, it's hard not to agree with Musk that hydrogen fuel cells are a woefully uneconomical technology.

About the only advantage fuel cells have over simpler, cheaper, and more efficient battery technology is faster refueling time. However, given that consumer electronics are advancing battery charging technology quickly thanks to billions in annual R&D spending, it's likely that one day soon even that advantage will vanish.

In fact, Tesla is working on new technology that in a few years could charge its cars in as little as five to 10 minutes. Combined with the large breakthroughs in cheaper batteries that are likely to result from the company's $5 billion Gigafactory and the $35,000 Model 3 it plans to launch in 2017, I just don't see how fuel cells can ever catch up, much less surpass the simpler, cheaper, and more reliable technology that is conventional batteries. 

Travis Hoium
Hydrogen fuel cells for automobiles create an interesting competitor to pure electric vehicles (fuel cells create electricity, so many components of the vehicle are similar). But the reason I'm becoming bullish on hydrogen fuel cells is the much broader impact they could have on energy.

As Adam pointed out, hydrogen is an energy carrier -- and a clean one at that. For energy sources that might be clean but don't provide consistent or controllable sources of energy -- think wind and solar -- hydrogen can fill the gap by allowing energy storage and dispatch ability when it's needed. Better yet, it can be stored in mass quantities, as opposed to batteries that can only store a limited amount of energy.

It's also more likely that an electrolyzer, a hydrogen storage system, and a fuel cell will combine to make off-grid applications possible before people would install a massive bank of batteries in their homes or businesses. The same goes for filling your vehicle with clean hydrogen fuel created while you were at work.

The challenge hydrogen has always faced is that it was a high-potential technology without a practical application. Why would you generate electricity in a natural gas plant, send it through power lines to an electrolyzer, store the energy, and then use a fuel cell to turn the energy back to electricity? Worse yet, why would you want to fuel an electric vehicle with hydrogen from natural gas, where a vast majority of the world's hydrogen currently comes from?

What was needed to create this revolution was clean forms of energy that were cheap enough to justify storing their energy for later use. With wind and solar now costing less than $0.05 per kWh, it's now becoming economically viable to store their energy for future use on the grid.

It'll take decades for this hydrogen vision to play out, but I see more upside there than with batteries. Elon Musk may love the battery, but it's a toxic device and does little to wean the world off fossil fuels in the long term. Storing energy in mass quantities with a clean, transportable fuel could change the world of energy as we know it. And that's why hydrogen is the next big thing in energy. 

John Rosevear
Is hydrogen a fad or the next big thing? It's still too early to tell, at least when it comes to autos. There are automakers (like Toyota) that insist that fuel cells make more sense for electric cars than batteries, and some (like Tesla) that insist that fuel cells are an expensive waste of time.

Toyota, which recently brought the fuel cell-powered Mirai sedan to market, thinks that recharging time will prove to be a difficult obstacle to mass-market adoption of battery-electric vehicles. Toyota executives say that fuel cells, which can be "recharged" with a fresh tank of hydrogen in just a few minutes, are a "better battery."

Of course, not everyone agrees. For starters, while just about every home in America has electricity, there's next to no hydrogen refueling infrastructure. Current industrial processes for making hydrogen gas (from natural gas, typically) aren't all that green. And as anyone who has ever heard of the Hindenburg disaster knows, transporting and storing hydrogen requires some precautions. 

There are some signs of an emerging consensus, though. General Motors (NYSE:GM), which is working with Honda (NYSE:HMC) on affordable fuel cells for vehicles, thinks the technology has an important role to play.

In a presentation last month, GM product chief Mark Reuss said that fuel cells make sense in some applications, such as larger vehicles that would otherwise require a big, heavy, and expensive battery pack, or vehicles in situations that require fast-turnaround recharging.

A slide from a recent presentation by Reuss. As GM sees it, fuel cells and batteries both have roles to play in its future vehicle portfolio. Image source: General Motors.

In the near term, fuel cell-powered electric vehicles will probably continue to be an expensive novelty. But it's very possible that in the long run, when nearly all of the vehicles on the road are powered by electricity, fuel cells will be standard for vehicles such as pickup trucks and emergency vehicles, while batteries will be the default for smaller cars. 

The answer is clear as mud
As you can see from our answers, hydrogen is a toss-up for investors. It clearly has high potential, but its adoption will depend on technology and infrastructure advancement over the next decade. For now, it's playing catch-up against electric vehicles and electric infrastructure, which is well established and easy to incrementally improve upon. 

The billion-dollar question is whether technology and cost reductions will advance fast enough in fuel cells to make it a viable alternative worthy of creating an energy revolution. There's no easy answer today. 

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.