Boston, MA 04/03/2014 (wallstreetpr) – Few sectors are as intriguing as alternative energy, and more so the fuel-cell segment where FuelCell Energy Inc (NASDAQ:FCEL) is a player. Shares of fuel-cell companies have soared in the past two months as investors jump in to bet on the sector prospects. Supply deals being signed left right and center by major players like Plug Power Inc (NASDAQ:PLUG) are forming the basis on which to judge most fuel-cell stocks.
Talk about Plug Power Inc and the company inked a major deal with giant retail operator Wal-Mart Stores Inc (NYSE:WMT). The deal spanning several years allows Plug to supply fuel-cell energy to power forklifts at about six distribution locations of Wal-Mart. The company also recently announced a deal with a major auto company.
Generally, the reality that fuel-cell stocks are getting business especially from major companies like Wal-Mart is leading to confidence among investors. Yet, the question that remains is whether FuelCell Energy Inc (NASDAQ:FCEL) and its peers in the fuel-cell alternative energy business can break from just serving niche market to becoming mainstream source of energy with substantial revenue.
While there is no doubt that fuel-cell companies provide ultra-clean energy, the cost of that energy is being scrutinized.
Need for platinum
Platinum is an important component in the production of fuel-cell energy. The noble metal is used as a catalyst and some experts have claimed that the future might be gloomy for FuelCell Energy Inc (NASDAQ:FCEL) and peers in the business of converting hydrogen and natural gas into power. They cite the cost and supply of the metal.
The experts claim that platinum being such an expensive metal, with an ounce going for about $1,400, big fuel-cell projects are likely to come at a cost to fuel-cell companies. Thus, this will hinder the boom of the technology in becoming a mainstream source of clean energy. The experts also cite that available platinum in the world is no able to support usage in fuel-cell technology for the long-run.
Further from the truth
However, insiders at FuelCell Energy Inc (NASDAQ:FCEL), Plug Power Inc and the emerging producers of fuel-cell power are not worried about cost of platinum and potential supply constraints. The companies have put in place systems to ensure that platinum-related costs are very minimal to their operations. Furthermore, they are able to reuse about 90 percent of the platinum in new products. Thus, there is no risk of platinum hampering growth of fuel-cell companies or supply being a great concern.
