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Energy Bill Provisions Expected to Benefit Sales of FuelCell Energy's Ultra-Clean DFC Power Plants

Posted on: Tuesday, 9 August 2005, 09:00 CDT

FuelCell Energy, Inc. (NasdaqNM:FCEL), a leading manufacturer of ultra-clean electric power generation plants for commercial and industrial customers, today publicly commented on the anticipated positive impact its business is expected to experience from the Energy Policy Act of 2005 signed into law by President Bush on Monday.

Among its provisions, the law specifically creates a 30 percent investment tax credit -- up to $1000 for each kilowatt -- for the purchase of fuel cell power plants. FuelCell Energy estimates this tax credit will translate to a savings of approximately 1.5-2.0 cents per kilowatt-hour (kWh) in typical circumstances. This is effectively an additional 20- to 25-percent cost reduction that passes directly to purchasers of Direct Fuel Cell(R) (DFC(R)) power plants. Combined with state-level incentives, and the firm's successful internal cost reduction efforts, DFC power plants are expected to become even more economically attractive in the U.S.

"We applaud the President and Congress for enacting a broad Energy Bill that recognizes the importance of fuel cells in the nation's mix of clean, efficient and reliable alternative power generating solutions," said Jerry D. Leitman, Chairman and CEO of FuelCell Energy. "This is the first tax incentive for fuel cell power plants at the federal level, and it provides a direct monetary benefit for customers who purchase our DFC power plants.

"Fuel cells provide firm, 24/7 energy and we believe the tax credit will stimulate interest in settings where intermittent power sources like wind and solar were previously the only choices," Leitman added. "Establishing a level playing field among clean technologies is good energy, good environmental and good tax policy."

The Company's ultra-clean DFC power plants provide the highest electrical efficiency -- between 45 and 47 percent -- and the lowest emissions of any firm power-generating source in its size range. In addition, the FuelCell Energy's DFC power plants can achieve overall energy efficiency of 70 to 80 percent for combined heat and power applications.

The bill also provides a production tax credit of 1.5-cents per kWh that would be available for fuel cell power plants operating on biomass renewable fuels such as digester gas from wastewater treatment plants.

Other provisions in the Bill include: approximately $2 billion in authorized spending over the next five years for research and development for hydrogen supply and fuel cell accounts program within the U.S. Department of Energy; approximately $1.3 billion in authorized spending over five years for hydrogen and fuel cell demonstration projects that includes vehicles, stationary and portable applications; and a provision of approximately $450 million in market transition programs for stationary, portable and micro fuel cells as well as hydrogen energy systems. FuelCell Energy believes these and other authorizations for fuel cells in the Energy Bill will benefit the industry overall.

About FuelCell Energy

FuelCell Energy develops and markets ultra-clean power plants that generate electricity with up to twice the efficiency of conventional fossil fuel plants and with virtually no air pollution. Fuel cells produce base load electricity where commercial and industrial customers face cost, reliability, security or environmental issues with their existing energy supplies. Emerging state, federal and international regulations to reduce harmful greenhouse gas emissions consider fuel cell power plants in the same environmentally friendly category as wind and solar energy sources -- with the added advantages of running 24 hours a day and the capacity to be installed where wind turbines or solar panels often cannot. Headquartered in Danbury, Conn., FuelCell Energy services over 40 power plant sites around the globe that have generated more than 70 million kilowatt hours, and conducts R&D on next-generation fuel cell technologies to meet the world's ever-increasing demand for ultra-clean distributed energy. For more information on the Company, its products and its worldwide commercial distribution alliances, please see www.fuelcellenergy.com.

Direct FuelCell, DFC and DFC/Turbine are registered trademarks of FuelCell Energy, Inc. All other trademarks are the property of their respective owners. The Company's sub-megawatt DFC fuel cell power plant is a collaborative effort combining its Direct FuelCell technology with a Hot Module(R) balance of plant design from MTU CFC Solutions, GmbH, a subsidiary of DaimlerChrysler.

This news release contains forward-looking statements, including statements regarding the Company's plans and expectations regarding the development and commercialization of its fuel cell technology. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Factors that could cause such a difference include, without limitation, the risk that commercial field trials of the Company's products will not occur when anticipated, general risks associated with product development, manufacturing, changes in the utility regulatory environment, potential volatility of energy prices, rapid technological change, and competition, as well as other risks set forth in the Company's filings with the Securities and Exchange Commission. The forward-looking statements contained herein speak only as of the date of this press release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statement to reflect any change in the Company's expectations or any change in events, conditions or circumstances on which any such statement is based.

Source: Business Wire

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