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NYSERDA Program Seeks to Spark Surge in Fuel Cell Use

Authority offers $21.6 million for fuel cell technology installation

March 16, 2011

ALBANY, NY — The New York State Energy Research and Development Authority (NYSERDA) has announced an incentive program for businesses, hospitals or other large power consumers interested in installing fuel cells.

The technology allows users to generate some of their own power with clean-energy technology, using less energy from the electric grid.

NYSERDA's Customer-Sited Tier Fuel Cell Program will provide as much as $21.6 million through 2015. The program provides an incentive toward the cost of fuel cell installation, plus payments over the first three years of operation based on power produced.

Companies can collect a total payment of up to $1 million for fuel cells, based on the size of the project. Funding is awarded to applications received on a first-come, first-serve basis.

“Fuel cells present a promising technology that NYSERDA strongly supports,” said Francis J. Murray Jr., President and CEO of NYSERDA. “If more large power consumers install fuel cells to offset some of their power needs, this will further our progress toward growing clean energy in New York State while taking some of the strain off the electric grid.”

The program is funded under the state's Renewable Portfolio Standard (RPS). The RPS, created by the state Public Service Commission in 2004 to reduce dependence on fossil fuels, is administered by NYSERDA and collected from utility ratepayers. The fund is used to help pay for dozens of clean-energy projects every year, ranging from large-scale wind farms to photovoltaic panels on private homes.

The funding is available to New York ratepayers who pay the RPS charge, but intended for businesses, government facilities, apartment complexes or other large enterprises. Extra incentives will be available to sites that serve a public benefit, such as hospitals, police stations or disaster shelters.

Fuel cells function similarly to a battery, although on a more complex level. In a process called “reforming,” natural gas is converted to a hydrogen-rich fuel. This is then combined with oxygen in an electrochemical process to produce electricity, heat and water. The heat can be recycled through the building to reduce heating, cooling or manufacturing costs. The technology can also work during a blackout.

Fuel cells emit about 60 percent less carbon dioxide than conventional combustion engines, and give off virtually none of the harmful pollutants associated with burning fossil fuels. And because fuel cells are located where the power is being used, there is no energy loss through transmission. About 8 percent of energy produced by large plants is lost due to resistance on transmission lines.

Fuel cells vary in price. A small fuel cell that generates 10 kilowatts would cost about $35,000 for the cell itself, and about $68,000 including installation, before incentives are applied. Large fuel cells have the ability to provide a significant portion of the electricity to run a major business or apartment complex, but can be expensive to install. For instance, a 400 kilowatt system installed at the 500-apartment Octagon complex on Roosevelt Island in New York City cost $2.4 million and is about the size of a small truck.

A variety of facilities around the state are installing or operating fuel cells funded partially by NYSERDA, including:

  • Price Chopper Supermarkets, Colonie, Albany County and Glenville, Schenectady County. Mona Golub, (518) 379-1636
  • Coca-Cola Refreshments, Inc., Elmsford, Westchester County. Toney Anaya, (914) 648-0956
  • Fox News, New York City. Public relations, (212) 301-3000
  • The Octagon Park apartment complex, Roosevelt Island, NYC. Michelle Lauterwasser, (203)-736-7019
  • East Rochester Central School District. Jose Correa, (585) 750-0981

For more information about NYSERDA's fuel-cell incentive, visit: PON 2157 Renewable Portfolio Standard Customer Sited Tier Fuel Cell Program


NYSERDA, a public benefit corporation, offers objective information and analysis, innovative programs, technical expertise and funding to help New Yorkers increase energy efficiency, save money, use renewable energy, and reduce their reliance on fossil fuels. NYSERDA professionals work to protect our environment and create clean-energy jobs. NYSERDA has been developing partnerships to advance innovative energy solutions in New York since 1975.

Last Updated: 01/21/2014