NYSERDA Introduces Program to Support Fuel Cell Use

The New York State Energy Research and Development Authority (NYSERDA) has announced an incentive program for businesses, hospitals or other large power consumers interested in installing fuel cells.

The technology allows users to generate some of their own power with clean-energy technology, using less energy from the electric grid.

NYSERDA’s Customer-Sited Tier Fuel Cell Program will provide as much as $21.6 million through 2015. The program provides an incentive toward the cost of fuel cell installation, plus payments over the first three years of operation based on power produced.

Companies can collect a total payment of up to $1 million for fuel cells, based on the size of the project. Funding is awarded to applications received on a first-come, first-serve basis.

The program is funded under the state’s Renewable Portfolio Standard (RPS). The RPS, created by the state Public Service Commission in 2004 to reduce dependence on fossil fuels, is administered by NYSERDA and collected from utility rate payers. The fund is used to help pay for dozens of clean-energy projects every year, ranging from large-scale wind farms to photovoltaic panels on private homes.

The funding is available to New York rate payers who pay the RPS charge, but intended for businesses, government facilities, apartment complexes or other large enterprises. Extra incentives will be available to sites that serve a public benefit, such as hospitals, police stations or disaster shelters .

Fuel cells function similarly to a battery, although on a more complex level. In a process called “reforming,”  natural gas is converted to a hydrogen-rich fuel. This is then combined with oxygen in an electrochemical process to produce electricity, heat and water. The heat can be recycled through the building to reduce heating, cooling or manufacturing costs. The technology can also work during a blackout.

Fuel cells emit about 60 percent less carbon dioxide than conventional combustion engines, and give off virtually none of the harmful pollutants associated with burning fossil fuels. And because fuel cells are located where the power is being used, there is no energy loss through transmission. About 8 percent of energy produced by large plants is lost due to resistance on transmission lines.

Fuel cells vary in price. A small fuel cell that generates 10 kilowatts would cost about $35,000 for the cell itself, and about $68,000 including installation, before incentives are applied. Large fuel cells have the ability to provide a significant portion of the electricity to run a major business or apartment complex, but can be expensive to install. For instance, a 400-kilowatt system installed at the 500-apartment Octagon complex on Roosevelt Island in New York City cost $2.4 million and is about the size of a small truck.

For more information about NYSERDA’s fuel-cell incentive, visit http://www.nyserda.org/funding/2157pon.asp.

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