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A home fuel cell, one of the available technologies for micro combined heat and power (microCHP) or microgeneration, is a residential-scaled energy system. A home fuel cell is an alternative energy technology that increases efficiency by simultaneously generating power and heat from one unit, on-site within a home. This allows a residence to reduce overall fossil fuel consumption, reduce carbon emissions and reduce overall utility costs, while being able to operate 24 hours a day.
Combined heat and power (CHP) fuel cells have demonstrated superior efficiency for years in industrial plants, universities, hotels and hospitals. Residential and small-scale commercial fuel cells are now becoming available to fulfill both electricity and heat demand from one system. Fuel cell technology in a compact system converts natural gas, propane, and eventually biofuels—into both electricity and heat, producing carbon dioxide (and small amounts of NOx) as exhaust. In the future, new developments in fuel cell technologies will likely allow these power systems to run off of biomass instead of natural gas, directly converting a home fuel cell into a renewable energy technology.
Most home fuel cells fit either inside a mechanical room or outside a home or business, and can be discreetly sited to fit within a building's design. The system operates like a furnace, water heater and electricity provider—all in one compact unit. Some of the newer home fuel cells can generate anywhere between 1 to 5 kilowatts (1.3 to 6.7 hp)—optimal for larger homes (370 square metres (4,000 sq ft) or more), especially if pools, spas and radiant floor heating are in plans. Other uses include sourcing of back-up power for essential loads like refrigerator/freezers, electronics/computers and wine cellars.
Deploying the system’s heat energy efficiently to a home or business' hot water applications displaces the electricity or gas otherwise burned to create that heat, further reducing overall energy bills. Retail outlets like fast food chains, coffee bars and health clubs gain operational savings from hot water heating.
Because fuel cells generate electricity and heat on site, the chemical conversion of hydrocarbon fuels into energy is substantially more efficient than comparable grid-connected systems and heating by burning fuel. Fuel cells provide a significant net reduction in CO2—about one-third lighter carbon footprint is possible when both heat and electricity are used. The system also reduces other harmful emissions produced by burning fuel at conventional power or heat generation sources. The lower carbon footprint supports many state goals and initiatives to address climate change impacts.
Home fuel cells are designed and built to fit in either an interior mechanical room or outside—running quietly in the background 24/7. Connected to the utility grid through the home’s main service panel and using net metering, the home fuel cells easily integrate with existing electrical and hydronic systems and are compliant with utility interconnection requirements. In the event of grid interruption the system automatically switches to operate in a grid-independent mode to provide continuous backup power for dedicated circuits in the home while the grid is down. It can also be modified to run off-the-grid, if desired.
20 companies have installed Bloom Energy fuel cells in their buildings, including Google, eBay, FedEx. . The eBay CEO said to 60 Minutes, that they have saved $100,000 in electricity bills in the 9 months they have been installed. 
Most home fuel cells are comparable to residential solar energy photovoltaic systems on a dollar per watt-installed basis. Home fuel cells can generate eight times more energy per year than the same size solar installation, even in the best solar locations. For example, a 5 kW home fuel cell produces about 80 MWh of annual combined electricity and heat, compared to approximately 10MWh generated by a 5 kW solar system. However, these systems are not directly comparable because solar power is a renewable resource and natural gas is not.
Operating costs for home fuel cells can be as low as 6.0¢ per kWh based on $1.20 per therm for natural gas, assuming full electrical and heat load utilization.
Solar panels have minimal operation cost because they only occasionally need to be cleaned.
In the U.S.A., home fuel cells are eligible for substantial incentives and rebates at both the state and federal levels as a part of renewable energy policy. For example, the California Self Generation Incentive Program (SGIP) rebate ($2,500 per kW) and Federal Tax Credits ($1,000 per kW residential and $3,000 per kW commercial) will significantly reduce the net capital cost to the customer. For businesses, additional cash advantages can be realized from bonus and accelerated depreciation of fuel cells.
The Database of State Incentives for Renewables & Efficiency (DSIRE) provides comprehensive information on state, local, utility, and federal incentives that promote renewable energy and energy efficiency.
In California in particular, utilities charge higher per kWh rates as energy consumption rises above established baselines – with the top tier set at the highest rates to discourage consumption at those levels. Home fuel cells reduce customer exposure to the top tier rates, saving homeowners as much as 45% in reduced annual energy costs.
Home fuel cells is a new market and represents a fundamental shift in the sourcing of energy. An individual home fuel cell system installed in a US home becomes a part of the bigger picture of U.S. energy independence. An ultimate benefit of home fuel cells will be to eventually create networks of micro-CHP systems distributed throughout communities and business parks. This self-generation of energy in a distributed generation approach that will secure and increase US power generating capacity, enabling unused electricity to be sent back to the grids without having to add new power plants and transmission lines. Putting a home fuel cell system into homes has the potential to get people off-the-grid, play a significant role in energy efficiency, and reduce US dependence on foreign energy imports.