March 1, 2005

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North American fuel cell experts are regarding the launch of Japan’s - and the world’s - first commercial government-subsidized residential fuel cell program last month as emblematic of the country’s worldwide leadership. Last month, Tokyo Gas Co. Ltd. inaugurated the program in which it will install 200 1 kW co-generation units, developed jointly with Ebara Ballard Corp. and with Matsushita Electric Industrial Co. Ltd., this year. Another 200 units are expected to be installed by other companies, sources say. Japan’s government is making Yen 25 million ($24 million) available in subsidies for this initial program. As announced earlier by Tokyo Gas, customer charges will be discounted 3% for the first three years of the contract in exchange for cooperation in collecting data. The upper billing limit has been set at Yen 9,500 ($91) per month, equal to 80 m3 of natural gas, according to the Tokyo Gas release. “This is pretty important,” says a Washington-based fuel cell watcher. “It seems to indicate that the Japanese really want to subsidize this deeply.” John Harris, Ballard Power System’s managing director for Asia Pacific, tells H&FCL that about half of Japan’s 46 million households are connected to the natural gas grid. Additionally, Ballard is developing together with Nippon Mitsubishi Oil a low-sulfur kerosene based version of the same co-generation system for households not connected to natural gas. Noting that Japan has one of the highest electric grid costs in the world, Harris believes this one could turn out to be even cheaper than natural gas. “From our perspective, Japan is a role model for the entire world in terms of the structured development of fuel cell markets, including government strategy and subsidies,” says Harris. “Nowhere else is government so vitally committed to the success of fuel cells.”