Car and truck makers, and even NASA, have experimented for decades with hydrogen fuel cells, working toward the day the technology would prove practical.
That day appears to have arrived. And fuel cell companies that have suffered losses for years are rewarding investors with big gains.
Fuel Cell Energy Inc. of Danbury, Conn., stock has tripled in value since last summer, as have shares of Hydrogenics Corp., headquartered in Ontario. Shares of Canada's Ballard Power Systems Inc. have jumped nearly eight-fold in the last 12 months.
The market appears to be responding to a great leap forward by hydrogen fuel cell technology. That is, the evolution of fuel cells as a legitimate, money-saving option as opposed to a mere public relations investment, or green option dependent on government subsidies.
None other than retail behemoth Wal-Mart confirmed the market legitimacy of fuel cells when it signed an agreement to deploy fuel-cell-powered, electric lift truck fleets at six North American distribution centers.
Signed last month, the deal with Plug Power is worth about $50 million and will power 1,738 fork trucks,the company has said. Wal-Mart had previously dabbled in fuel-cell technology, which is attractive economically because employees can work a full eight-hour shift on a single tank of hydrogen, and can be refueled in three minutes. Conventional fork trucks typically require hours of down time to recharge the battery.
"We are pleased with the performance of the hydrogen fuel cells that we have been operating and are excited to expand our program with Plug Power," Jeff Smith, senior director for Wal-Mart Logistics, said in a statement.
A fuel cell converts the chemicals hydrogen and oxygen into water, and in the process it produces electricity, while emitting only water vapor. In order to generate continuous electricity, fuel cells require a constant source of hydrogen and air.
Fuel cell-powered engines do not burn fuel, which makes them an efficient, quiet and pollution-free alternative to combustion engines. The lack of emissions pleases environmental groups.
"I think fuel cells really have a huge amount of potential to cut pollution by providing a way to gather energy from renewable sources," said Adam Garber, field director for Penn Environment. "It's just another way we can end our dependence on fuel or at least cut our dependence on it."
According to the market research firm MarketsandMarkets, global fuel cell market revenue is expected to reach $2.5 billion by 2018. Shipments of fuel cells are expected to jump to 1.1 million units by then, up from 24,500 in 2012.
Engineer Joel R. Anstrom of Penn State said the economic viability of fuel cells in fork trucks might give the industry the time it needs to refine the technology for viable use in vehicles.
"It's going to give the fuel cell companies volume," said Anstrom, director of the Hybrid and Hydrogen Vehicle Research Laboratory at the Larson Pennsylvania Transportation Institute at Penn State's University Park campus.
"They get some volume and they can capitalize and invest in manufacturing of equipment and manufacturing plants and then they can get their costs down," he added. "It gives them a steady revenue stream that they can count on as they keep innovating."
Anstrom is the principal investigator of a project funded by the state Department of Environmental Protection and Department of Community and Economic Development to develop a hydrogen-fueled fleet of buses, vans and cars.
The U.S. Department of Energy is the lead federal agency for applied research and development of hydrogen fuel cell technology. The DOE set a goal of 2015 to have fuel-cell vehicles on the market, Anstrom noted.
"I think you're going to see larger numbers of fuel cell cars coming from GM and Honda," he said. "They're not going to sell hundreds of thousands of them, and they're probably still going to be expensive."
Toyota announced a goal last year to introduce a fuel cell model at a cost less than $100,000.
DOE efforts have reduced high-volume manufacturing costs for automotive fuel cells by more than 35 percent since 2008 and more than 80 percent since 2002, the agency says on its website. Analysts say costs need to drop in half yet again before fuel cell vehicles become affordable.
In addition to the Wal-Mart deal, fuel cell companies gained additional momentum in December, when the Army said it will start testing hydrogen fuel cells in conjunction with General Motors at a Michigan laboratory.
But one local investment professional urged caution when considering fuel cell stocks. Such stocks are known to attract short sellers, who ride the short-term wave before dumping the stock.
"You have to be a little careful with some of the new technology companies," said Ben Atwater of Atwater Malick, an investment advisory firm with offices in Dauphin and Lancaster counties. "There's so many new ideas out there and so many of these things fail."