Plug Power, a stationary fuel cell maker valued at just over $300 million, has just brought on a new interim CFO - David Waldek.

Tomorrow, the company reports Q4 and annual 2006, so recent executive departures do not augur well for these results. According to this Motley Fool entry;

"Public filings alone show that gross margins have continued to deteriorate all year long. As for operating and net margins, they remain so negative as to not be worth calculating."

Back in 2004, it was anticipated that their GENSYS system would cost below $1500 in 2007/8 - a price at which it could compete in the market without a government subsidy. Like many fuel cell companies, lower costs sadly remain on the horizon and a price breakthrough has yet to materialize.

So let's see what the results are like tomorrow . . .

FuelCell Energy, a manufacturer of high temperature hydrogen fuel cells for clean electric power generation, has 2 distinguishing features as a fuel cell company;

i) They are firmly in the stationary power market from 250 KW to 3 MW
ii) They think hydrogen is far-off, so their fuel cells run on off the shelf fossil fuels like gas or even diesel and jet fuel

And whilst the company is loss-making according to an analyst at Ardour Capital . . . “If you're going to be in fuel cells . . . this is the only company you should be looking at right now.”

The fuel cell sector has not done well of late. But what has changed are rising government incentives which may at last herald better fortune. The Income Tax Credit was recently extended until the end of 2008 and some think it could run until 2016 when next renewed. Whilst I don't in principle agree with subsidies because of the opportunity costs they generate, it's clear that it is in the self-interest of alternative energy technologies which are not quite commercially viable to get them. This has generated quite a boom in the solar and wind industries. If the fuel cell sector did even half as well as those two, we would all take a lot more interest in the fuel cell industry very quickly.