ClearEdge Power is making what it hopes is the Goldilocks of fuel cells, a power source big enough for a business or school but less expensive than larger, high-end models.
The Hillsboro, Ore.-based company today said it has raised $73.5 million from institutional investors as well as Austrian energy supplier Gussing Renewable Energy and utility Southern California Edison.
The series E round will be used to expand to the east coast U.S. and internationally, including into central Europe. The company also intends to expand its product line with a fuel cell designed specifically for data centers, a product which is being now tested with customers, according to CEO Russell Ford.
The data center fuel cell will provide power at about half the cost of grid energy and provide back up in the case power goes out, Ford said. The company is planning other derivative products from its core 5-kilowatt fuel cell, too.
ClearEdge Power makes smaller units than Bloom Energy and FuelCell Energy but the company sees the light commercial market, such as retail outlets and office buildings, as a larger available market worth about $100 billion globally, according to Ford.
A single ClearEdge unit generates 5 kilowatts of power by converting natural gas into electricity using a chemical process. Customers also use the heat generated from power production for space heating or to heat water.
With its latest funding, it intends to set up business in Eastern states, including New York, Connecticut, New Jersey, and Pennsylvania, where there's a relatively high cost of electricity. A 5-kilowatt unit, which is about the size of a refrigerator, costs $56,000. When maintenance and operation costs are figured in, the cost is lower than getting power from the grid, Ford said.
Fuel cells are a reliable source of power when power goes out and are cleaner than grid power. ClearEdge's fuel cells don't emit any air pollutants and they reduce carbon emissions by 35 percent to 40 percent, according to the company. Because they generate both heat and power, they are 90 percent efficient.
One of the big barriers to fuel cell adoption has always been the upfront cost. Return on investment depends on power and fuel prices, but the company's current commercial customers usually see a payback in around six or seven years, Ford said.
ClearEdge Power is negotiating with financial institutions so it can provide financing, which would remove the upfront cost. Solar companies are using the solar lease model to accelerate sales. Bloom Energy also offers financing where it owns and maintains its fuel cells and customers pay for the power and heat produced.
"As we get a little more mature to add financing as the solar companies have we will absolutely see an inflection in the adoption rate," he said. "I expect to have something in place in the very near future."
The company expects to sell 1,000 units next year and then double volume every year through 2015, he added.