Fuel cells create a chemical reaction to produce electricity and heat. They look like large industrial refrigerators filled with stacks that are lined with catalysts (a metal, sometimes platinum), and a fuel (commonly natural gas) is inserted in one side and runs over the stack. Electricity and heat flow out the other side. Utilities and industrial and commercial businesses are sometimes interested in the technology because it is cleaner power than fossil fuels, and it’s distributed.

However, as Bottone explained in an interview, the overall fuel cell industry has over promised and under delivered for a good two decades. Prices have largely remained too high to be competitive with grid power. FuelCell Energy itself saw its stock close at below $1 per share on Monday.

But FuelCell Energy also says that it’s at a point where it’s making money off of the individual fuel cell power plants that it sells (it generated a gross quarterly profit from products and service for the first time last quarter), and when it ramps up its manufacturing capacity to 80 to 90 MW per year (it’s currently at 56 to 60 MW) it will be profitable. That could make it a record-holder as the first profitable fuel cell company.

To get to those profitable goals, FuelCell Energy has been selling fuel cell power plants at the size of megawatts — the bigger installation the better the economics are, says Bottone. The company has installed 182 MW to date (Updated: this is actually both installed and in backlog), and sells its fuel cells at around $3,000 per kilowatt. When it ramps up its production to that 90 MW, it will be able to sell the fuel cells closer to $2,000 per kilowatt.

FuelCell Energy has it has already installed the most fuel cells in the world, and that its stack — the place where the chemical reaction occurs — can last five years. Stack replacement is one of the pain points for the younger fuel cell companies like Bloom Energy. FuelCell Energy operates the power plant for the customer, including doing maintenance and replacing parts. Eventually the company thinks it can get its stack to last 7 years.

If more utilities and businesses across the world start to look to fuel cells as one way to create more clean power, particularly now that nuclear is becoming less supported, it could help FuelCell Energy reach that profitable point. Fuel cells, like nuclear, offer base load power (not fluctuating throughout the day like the sun and wind). But of course, nuclear power plants have been built to offer gigawatts of power, instead of a few megawatts.

In the U.S. utilities have moved pretty slowly when considering fuel cell tech. According to a report that consultants Black & Veatch released in June, utilities in the U.S. think that fuel cell technology will have one of the least impacts on their businesses in comparison to other types of green technology.

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But in fact, stationary fuel cells — devices that chemically convert hydrogen into electricity and water, or hydrogen-containing fuels into power, water and various byproducts — are already a highly-populated industry. Players such as United Technologies, Ballard Power Systems, Plug Power, FuelCell Energy and Panasonic are churning out stationary fuel cells, mainly to provide backup power, generate electricity for remote applications or meet a company’s low-emissions energy production goals. But making fuel cells that can produce electricity as costs that are competitive with grid power — Bloom Energy’s goal — has remained out of reach so far.

That challenge, of course, is a siren’s song for venture capitalists looking for the next fuel cell startup with technology that can bridge that critical gap. And while Bloom Energy has raised more VC investment than many of these startups combined, it isn’t unique in aiming its sights at the holy grail of grid parity. Here are 10 startups that could be hot on Bloom Energy’s trail:

ClearEdge Power: The Hillsboro, Ore.-based startup has spent 7 years developing a stationary fuel cell that runs on natural gas or propane, aimed at providing both electricity and heat to homes and small businesses. It’s raised about $55 million in venture capital, and most recently landed $11 million in January, with investors including Kohlberg Ventures, Applied Ventures, Big Basin Partners. ClearEdge has reported initial shipments of a $50,000, 5-kilowatt fuel cell unit aimed first at the California market.

Combined heat and power (CHP) generation, or creating both useful heat and electricity from a single source, is the goal of Bloom Energy, as well as many other fuel cell makers. Particularly companies like Bloom that use solid oxide fuel cell technology, are looking at CHP because that technology runs hotter than the polymer electrolyte membrane (PEM) fuel cells, which are more typically aimed at vehicular or portable applications.

Ceres Power: Ceres Power is an Imperial College London spinout based in Redhill, U.K., which has raised about $75 million to develop stationary fuel cells that generate electricity and heat for homes using methane, that is, natural gas. In May, it announced the successful test of a 1-kilowatt unit with British Gas, a milestone that came with a £2 million ($3.10 million) payment from the utility with a promise of more to come. In December Ceres announced the start-up of a manufacturing line it hoped to bring to commercial-scale production through the course of this year.

Neah Power Systems: The Bothell, Wash.-based startup got started with U.S. Navy money, raised investment from backers including Intel Capital, Alta Partners, Novellus Systems, Castile Ventures and Frazier Technology Ventures, and went public as an over-the-counter traded company via a reverse merger in 2006. In  January it announced a $10 million funding commitment from Ebeling Heffernan and First Equity Trust, and also bought lithium-ion battery charger CyVolt Energy Systems. Neah says it has replaced traditional proton exchange membrane (PEM) technology with a more reliable, longer-lived silicon-based design, and while it’s concentrating on portable applications, it has also identified the stationary backup power market as a potential target.

ReliOn: This Spokane, Wash.-based startup was spun out of utility Avista Corp., and makes proton exchange membrane-based fuel cells in the 300-watt to 12-kilowatt range for commercial and industrial backup power. It most recently raised $23 million in a Series C round in April 2008, and its investors include PCG Clean Energy & Technology Fund, Robeco, Oak Investment Partners, Chrysalix Energy Venture Capital, Enterprise Partners Venture Capital and Wall Street Technology Partners. It had shipped more than 1 million watts of devices as of December 2007, and in February 2008 announced a partnership with Emerson.

P21: The Munich, Germany-based hydrogen-powered fuel cell maker was spun out of Vodafone in 2001, and unsurprisingly is aimed at providing backup power to telecommunications networks — a common target market for fuel cell makers. It raised €10 million ($13.6 million) in May from Yellow&Blue Investment Management, Target Partners and Conduit Ventures, and says it has been testing its fuel cells in the field since 2004. (For more research on fuel cells and other tech to make telecom networks greener, check out GigaOM Pro).

ACAL Energy: This U.K.-based startup makes membrane exchange fuel cells with cathodes that use about one-fifth the platinum of traditional membrane fuel cells — a bonus, given the high cost of that precious metal — and is targeting the stationary power market as well as automotive applications. It raised £3.3 million ($4.8 million) in December 2008 from CT Investment Partners, Rising Stars Growth Fund, NorthStar Equity Investors, Porton Capital and Synergis Technologies. In January it announced plans for its first working model of its FlowCath technology in a stationary power setup at a Warrington, U.K. industrial site, with installation set for the second half of 2010.

CellEra: This Israeli startup is also working on a stationary fuel cell that does away with platinum, with the aim of cutting costs by up to 70 percent compared to platinum-using fuel cells. It has developed proprietary electrode technology and is working with partners to develop its platinum-free catalysts. It raised $2 million from Israel Cleantech Ventures last year, and in February raised another $2 million in part of what CEO Ziv Gottesfeld said was a larger round of funding.

Intelligent Energy: This London-based maker of hydrogen-powered fuel cells has also focused its efforts on automotive applications, with partnerships with Suzuki for fuel cell scooters and with Lotus for fuel cell taxicabs for the 2012 Olympics in London. But the company also says its fuel cells have been used for stationary combined head and power generation since 2003, and in 2008 it launched a CHP joint venture with utility Scottish and Southern Energy. In July it raised $30 million, bringing its total haul to some $130 million from investors including Meditor European Master Fund and F&C.

Electro Power Systems: This Italian startup is making a stationary fuel cell, aimed at the mobile phone backup power market, and raised $6.8 million from 360 Capital Partners and others in the first quarter of 2009, according to Greentech Media. Its innovation is to make the process reversible — the fuel cells would convert hydrogen to electricity when grid power is down, then convert water back to hydrogen via electrolysis using grid power once it’s back on. Electrolysis is often touted compared to the more economical — yet fossil fuel-hungry — method of “cracking” natural gas into hydrogen, which supplies the lion’s share of the world’s hydrogen supply today.

EnStorage: This Israeli startup is aiming its sights on regenerative fuel cells to help the power grid load balance and firm up intermittent solar and wind power generation. It raised $2 million in January 2008 from Greylock Partners, Caanan Partners and Siemens Venture Capital, and says its regenerative fuel cell technology, developed by Tel Aviv University Professor Emanuel Peled, is optimized to provide high efficiency at low cost. (This and other regenerative fuel cell systems share some characteristics with flow batteries, which convert storage chemicals to energy — flow battery startups include Deeya Energy, ZBB Energy Corp, Premium Power and EnerVault.)