Thinking Outside the Bloom Box

I must admit to not quite understanding the media frenzy over the Bloom Box--which recalls the excitement (followed by anti-climax) accompanying the debut of the Segway. Remember, that turned out to be a scooter, though the company didn't like the word.

Sunnyvale, California-based Bloom Energy certainly knows how to create buzz, and has raised $400 million. Having Colin Powell on your board helps, as does being featured on 60 Minutes and getting endorsements from California Governor Arnold Schwarzenegger and venture capitalist John Doerr of Kleiner, Perkins Caulfield and Byers, who believes the Bloom Box will produce electricity cheaper and cleaner than the grid. Also in Bloom's camp are Wal-Mart, eBay, FedEx, Coca-Cola, Google, Lockheed and Staples--companies not known for buying junk.

The refrigerator-sized Bloom Box, which may be built in Chattanooga, Tennessee, is not so much a new invention as a new iteration. A stationary fuel cell, it is a cousin to the devices that might eventually drive hydrogen cars. Many companies have been marketing non-automotive fuel cells, including Danbury, Connecticut's Fuel Cell Energy and (also in Connecticut) United Technologies.

General Electric planned to enter this market more than a decade ago with a fuel-cell partner, New York-based Plug Power, but the, uh, plug was pulled when the device could not compete with the grid.

The Bloom Box will not be in your home anytime soon: It is selling to big companies because they can afford it: The purchase price is something like $700,000 to $800,000, with a reported three-to-five-year payback.

Do you want to power your home with a fuel cell running on the natural gas line that's already there? Bloom Energy chief K.R. Sridhar thinks it can eventually be done for less than $3,000.

But a household name, Panasonic, is much closer to making that happen. Though it didn't make much of a ripple, Panasonic became the first company to offer a home-based fuel cell (in Japan) in May 2009. And they're selling briskly, thanks to a 50 percent subsidy that reduces the price to $15,000.

Panasonic, which also makes the nickel-metal-hydride battery pack for the Toyota Prius in a joint venture, and will be making battery cells (but not the packs) for the forthcoming Tesla Model S sedan, is also a fuel-cell pioneer. According to Peter Fannon, a Panasonic vice president for corporate and government affairs, "We've been selling a one-kilowatt stack for two years to residential customers. Several thousand are in use."

The 50% subsidy from the Japanese government makes Japanese sales possible; without something similar, said Fannon, Panasonic is not likely to launch anything similar in the U.S. anytime soon. Fuel cells are infinitely scaleable, so the possibility of Panasonic-branded computer or cellphone battery replacements also exists. Panasonic's lithium-ion batteries have both computer and electric-vehicle applications.

I visited Plug Power's "fuel-cell house" in upstate New York (Panasonic also opened one on Tokyo Bay last year). The small two-story, five-room "eco-ideas" house, which also incorporates solar systems, tight insulation and energy-saving glass, has a three-generation family of four living in it. Carbon emissions are 50 percent less than in a conventional home, a figure that is likely to drop further.

Where does all this leave Bloom Energy? With a lot of question marks. There is more competition, and less certainty, than the hoopla suggests. The Bloom Box could indeed turn out to be a breakthrough, but this isn't the reinvention of the wheel (that was the Segway). And Doerr invested in that, too.

Photo: Panasonic