Bloom Energy CEO: Fuel Cells for Home Power Will Hit "Grid Parity" Within 5 Years

For Kleiner Perkins-backed startup Bloom Energy, the vision is to have its refrigerator-sized fuel cell devices eventually powering transportation — ideally within a decade. But according to a new interview with CEO KR Sridhar, an important milestone will come years ahead of that goal. Within 3-5 years, Sridhar tells BusinessWeek, the so-called Bloom box could reach “grid parity” for home use, or competitive pricing with conventional electricity sources.

The 5-kilowatt device involves a fuel cell system that can generate electricity using a range of liquid fuels, such as natural gas or ethanol. Installed at the University of Tennessee in Chattanooga in 2006, one of the earliest Bloom box units (running on natural gas) was reported in the New York Times last year to deliver enough power at twice the efficiency of a standard gas-burning boiler system, with 60 percent fewer emissions, for a 5,000-square-foot home (about twice the size of an average single-family home in the U.S.). Bloom marketing and product management chief Stu Aaron confirms those results in this latest report.

Really competing with conventional energy sources in the residential market, however, will depend on much more than efficiency and energy savings. Several variables will factor into the success of these devices as they become available — reportedly within the next year or two. Key issues could include the upfront cost of the devices, reliability and the relative ease of the process for installing them (largely in rural areas of the developing world currently lacking a grid connection, but also for use in conjunction with other power supplies in the developed world).

Initially, Bloom plans to target businesses, “that want to explore whether they can get reliable green energy at the same price or less than they now pay the electric company,” writes BusinessWeek, noting rumors that tech companies including eBay and Google have already started testing the system.

At least one thing is certain: Bloom’s investors have a lot riding on the startup’s ability to parlay a promising technology into a profitable business. According to recent comments from Kleiner Perkins leader John Doerr, Bloom now has “substantial revenues and orders,” but they haven’t come cheap. Doerr said 8-year-old Bloom, with its $250 million in financing, has “required ten times as much capital,” compared to other venture companies (Google took only $25 million to get to an IPO), and he predicted the company remains at least a year away from an initial public offering.

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