Canadian Fuel Cell Commercialization Roadmap
Markets

Markets for fuel cells are diverse and the revenue potential is substantial.

Although these markets will not be constrained by geographic borders, developed regions such as Europe, North America and Japan are expected to be the early adopters for a number of reasons, including: 

• Energy costs
• Large consumer demand
• Environmental pressures to change energy consumption behaviour
• Advanced regulatory environments
• Consumer awareness and willingness to be early adopters
• Willingness to pay a premium for energy reliability and security

During the early part of the projected time horizon, much of the demand is expected to come from institutional and government buyers willing to pay a premium to support the fuel cell industry's development and promote alternative energy sources. This includes demonstrating the benefits for society and the environment, as is already being done in Japan and Europe.

Longer-term uses, particularly for stationary and portable power, could be extensive in underdeveloped countries with less access to conventional energy sources and infrastructure.

The following series of figures shows the projected demand by market segment and timeframe.

Figure 6. Global Fuel Cell Systems Estimated Demand

							CAAG (Cumulative Average Annual Growth)
Source: PricewaterhouseCoopers
Market Segment	2001	2003	2005	2007	2009	2011	2003–2011	2007–2011
Stationary (MW)	75	225	675	2 025	7 088	15 947	70%	67%
Portable ('000 Units)	0	50	2 000	50 000	290 000	470 000	214%	75%
Mobile (Units)	10	3 523	7 608	31 680	275 520	1 610 080	115%	167%

Figure 7. Global Fuel Cell System Market Projections

Source: PricewaterhouseCoopers

Figure 8. Global Fuel Cell Systems Estimated Demand
$ (millions)

							CAAG (Cumulative Average Annual Growth)
Source: PricewaterhouseCoopers
Market Segment	2001	2003	2005	2007	2009	2011	2003–2011	2007–2011
Stationary	$397	$886	$1747	$2734	$7974	$17940	46%	60%
Portable	0	3	94	1 875	10 875	17 625	193%	75%
Mobile	1	79	123	311	1 746	10 257	84%	140%
Total Market	$398	$968	$1 963	$4 920	$20 595	$45 822	62%	75%

Growth rates for the industry are projected to average in excess of 60 percent between 2003 and 2011. While detailed projections were not taken beyond 2011, all indications show that the market will continue to grow at high levels beyond this point.

For the period 2007 to 2011, the industry is projected to grow at a 75 percent compounded average annual rate. The figure below illustrates the impact of a 10 percent, 25 percent and 50 percent compounded average annual growth rate to 2021.

Source: PricewaterhouseCoopers

Market Stages

The long-term potential of fuel cells is generally recognized, but the immediate challenge is identifying and securing early adopters of the technology. For most companies, the move into mass markets will be a gradual process.

Defining Commercialization

For many technology companies, including those in the fuel cell industry, the line between product development and commercialization is a grey area. For the purposes of this Roadmap, commercialization is defined as the third of a three-phase new product process.¹²

• Pre-development — From the idea stage up to, but not including, product development
• Development and testing — Product development, as well as in-house and customer tests of the product
• Commercialization — Market launch and production start-up

The commercialization phase is divided into four stages related to market development.

• Demonstration — Fuel cells are produced in small numbers for demonstration purposes. This phrase illustrates market-readiness in specific applications in terms of product quality which includes performance, reliability and durability.
• Early Markets — Fuel cells are produced for sale in early adopter markets. These early adopters will be sophisticated buyers who have specific needs, such as performance and reliability, that are best met by fuel cells. These buyers are also prepared to pay a premium price. Early markets require the development of full-scale manufacturing capabilities and the development and implementation of supply chains.
• Mid-Markets — Fuel cells are produced in larger numbers for markets that are beyond early adopters but not yet mass markets. Price will be a more important consideration in the purchase decision in the mid-markets than in the early markets. Buyers will still tend to be relatively knowledgeable in their purchase decision. Manufacturing capabilities are similar to the early markets stage.
• Late Markets — Fuel cells are sold in large volumes to mass markets and are widely accepted by consumers. Buyers will be less sophisticated in their product knowledge. Price will be the major factor in the purchase decision for most buyers, with reliability and performance having been clearly proven in the early and mid-markets.

These commercialization stages reflect a typical fuel cell company, based on application area and unit size (see Table 1). Ranges are intended to be general and specific applications will differ. Every product will proceed through the four stages in a somewhat different way.

Table 1. Commercialization Stages for a Typical Fuel Cell Company — Annual Number of Units Sold¹³
Stationary

Stage	Unit Size
	less than 25 kW	25–150 kW	more than 150 kW
Demonstration	10–100	10	10
Early Markets	1 000	100–1 000	10–100
Mid-Markets	1 000–10 000	1 000–10 000	100–1 000
Late Markets	10 000	10 000	1 000

Table 1. Commercialization Stages for a Typical Fuel Cell Company — Annual Number of Units Sold¹³
Portable

Stage	Unit Size
	less than 25 Watts	25–100 Watts	more than 100 Watts
Demonstration	100–1 000	100	10–100
Early Markets	1 000–10 000	1 000–10 000	1 000
Mid-Markets	10 000	10 000	10 000
Late Markets	100 000	100 000	10 000–100 000

Table 1. Commercialization Stages for a Typical Fuel Cell Company — Annual Number of Units Sold¹³
Mobile

Stage	Unit Size
	less than 25 kW	25–125 kW	more than 125 kW
Demonstration	10–100	100	10
Early Markets	1 000	1 000	100
Mid-Markets	10 000	10 000	1 000
Late Markets	10 000–100 000	100 000	10 000

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¹²Adapted from Robert G. Cooper, Winning at New Products
¹³This table shows the number of units that a typical fuel cell company might sell in a year at each market stage. It does not show what the industry as a whole might sell annually.