Solid Oxide Fuel Cell (SOFC) Market Analysis By Application (Stationary, Transportation, Portable), By Region (North America, Europe, Asia Pacific, MEA, CSA), And Segment Forecasts, 2018 - 2025

Industry Insights

The global Solid Oxide Fuel Cell (SOFC) market size is expected to reach USD 1.42 billion by 2025. Rising awareness about alternative energy sources is a major factor fostering the market growth. SOFCs are widely gaining momentum as an important source for the backup power options, primarily due to their ability to generate electricity by using a variety of fuels such as hydrogen, natural gas, and biogas. The energy crisis has been a long-standing global issue and governments around the world are supporting the technological developments to tackle the issue. 

SOFCs are becoming an attractive option for energy-efficient power generation resulting in the rising demand for the product in combined heat and power applications. The U.S., since the past five years, is attempting to actively collaborate with private companies through government bodies such as the U.S. Department of Energy and Environmental Protection Agency. In Canada, private players along with government agencies are ameliorating their position on FC induced energy reliance and considers it as a prime source of energy security for the future. 

Market development is anticipated to remain ambiguous as the industry trends are largely influenced by support policies. In the next few years, industry growth is likely to be dependent on the concrete steps undertaken by industry participants as well as the policy makers.

The industry is likely to witness strategic partnerships to strengthen their position in the emerging markets. Public-private partnerships are predicted to be critical for attaining an economically viable technological shift. The introduction of green technologies as an alternative to existing practices is anticipated to lead to high costs, which in turn is projected to challenge the innovations carried out by the key players. Majority of industry participants need to address the shortcomings regarding technical aspects such as stack degradation rates for SOFCs. 

Application Insights

Stationary application was the largest segment in 2016, while transportation is likely to be the fastest-growing segment over the forecast period owing to the increasing adoption of solid oxide fuel cells in automobiles, marine, and trucks. 

In terms of capacity and revenue generated, the stationary application is expected to witness the highest growth over the forecast period due to the vast scale of proposed projects to power homes with solid oxide fuel cells. Portable SOFCs are still in the development stage and likely to witness lowest growth rate due to the pricing and durability issues.

SOFCs have significant growth opportunities in the residential as well as the commercial sectors. In the U.S., stationary SOFCs are widely used in data centres and as a power source for various other commercial purposes. Stationary solid oxide fuel cells are also finding a potential market in military applications.

Countries such as Germany, Japan, and South Korea are strengthening their regulatory framework which acts as a catalyst for the utilization of solid oxide fuel cells in residential applications. France and the UK are funding extensive amount for fuel cell research purposes due to the rising electricity prices.

Regional Insights 

Companies in the North America region are witnessing a series of mergers and acquisitions by end-users. Players in the industrial segments (automobile, pharmaceutical, heavy industries, oil & gas, and others) along with technology & data service sectors are showing credible participating interests in companies pioneering the SOFC technology. However, demand in the North America region is expected to witness stalled growth following the dramatic shift in the policies of the current government toward fossil fuel-based energy.

Some of the major businesses in the U.S. such as Coca-Cola, Bank of America, eBay, Google, and Walmart have announced plans to adopt solid oxide fuel cell for consumption. The data center industry in the U.S. alone consumed over 80 billion kilowatts of electricity in 2015. The adoption of solid oxide fuel cell technology for operations is expected to reduce the electricity utilization cost of data centers by a significant margin.

Factors such as reducing greenhouse gas emissions, improving the security of energy supply, and strengthening the European economy are the essential growth drivers in the Europe region. However, a majority of the European region is marked by the presence of mature renewable energy industry. This could, however, pose a barrier to entry for SOFC’s in Europe.

Transportation is expected to be a viable mode of utilization in the region. Technological trends in Europe are aiming toward utilizing SOFCs for transportation purposes. In 2016, Hydrogen Mobility Europe launched the company’s first 100 electric cars in the UK, Germany, and France. Desta, Safari, and ENSA are some the European funded SOFC projects that generated excellent results.

Asia’s dominance is expected to increase over the forecasted period. The Asia Pacific region is estimated to account for the highest growth rate from the period 2017 until 2025. The region is expected to account for around 50% of the global demand as a large number of manufacturers are based in Japan and the region also witnesses high demand for solid oxide fuel cell.

The contribution of the solid oxide fuel cell in Asia Pacific is majorly owing to its broad application in the stationary segment. Apart from the automotive, commercial and residential sectors are one of the major avenues for solid oxide fuel cell’s demand. In recent times, SOFCs are being widely accepted as backup power option in the telecom industry which has a widespread presence in the region.

Competitive Insights

System developers and suppliers dominate the value chain. Wholesalers work in close collaboration with major suppliers, who are usually involved in the marketing activities. Industry participants are focusing on strengthening their relationships with system installers owing to their strong local presence and close ties with customers, which in turn is expected to help them expand their geographical presence. 

The research and development of cost-effective technologies is a major area of focus for a majority of the market participants. In 2015, Ballard Power Systems was reported to have the  highest R&D expenditure, whereas Plug Power almost doubled its research spending in the same year. This trend highlights the importance industry participants’ grant to research and development activities. 

Upcoming projects focused on hydrogen energy storage, especially in Europe, are predicted to help market participants expand their product portfolios. The introduction of cleaner technologies is estimated to lead to high costs, challenging the innovations carried out by most of the market participants. These market players are likely to witness forward integration to cash in on their growth potential and enhance their economies of scale. Therefore, as the industry stabilizes, several players are expected to move toward process innovation techniques, further intensifying the competition in the market.

Report Scope 

Segments covered in the report

This report forecasts revenue growth at a global, regional & country level, and provides an analysis on the industry trends in each of the sub-segments from 2014 to 2025. For the purpose of this study, Grand View Research has segmented the global solid oxide fuel cell market on the basis of application and region:

• Application Outlook (Volume, Units; Capacity, Kw; Revenue, USD Thousand; 2014 - 2025)

  • Stationary

    • Distributed Energy Generation

      • Residential Applications

      • Commercial Applications

      • Natural Gas Compression Station

      • Data Centers

      • Military & Defense Applicationss

      • Grid Support

      • Industrial

      • Remote Applications

      • Others

    • EPS/UPS

  • Transportation

  • Portable

• Regional Outlook (Volume, Units; Capacity, Kw; Revenue, USD Thousand; 2014 - 2025)

  • North America

    • U.S.

  • Europe

    • Germany

    • UK

    • France

  • Asia Pacific

    • China

    • South Korea

    • Taiwan

    • Japan

  • Central & South America

  • Middle East & Africa