After years of developing portable energy systems for the military, Southborough, Mass.-based Protonex Technology Corp. is close to launching a similar product for a different group of on-the-go people: the RV crowd.
The Telegram and Gazette, Worcester, reported that the 250-watt M250-B fuel cell – about the size of a microwave oven and aimed at recreational vehicle owners who want a quiet, nearly odorless way to keep their lights on at campgrounds – could be the first product of its kind to reach RV owners in the United States. But it also represents Protonex’s jump into the marketplace of ordinary consumers.
“Investors have bought into Protonex in the past few years on the premise we’re going to offer good, competitive products,” said Scott A. Pearson, Protonex CEO. “This is a good, competitive product.”
Fuel cells convert fuel to electrical energy, and Protonex has been developing them since its founding in 2000. Funded with two rounds of venture capital, two stock offerings on the AIM exchange of the London Stock Exchange and millions of dollars in government contracts, the company has created fuel cell prototypes for troops in the field. Its technology has even powered an unpiloted aircraft.
Protonex posted revenue of $7.9 million and a loss of $10.9 million in the 2008 fiscal year ended Sept. 30.
Although fuel cells are expensive to produce, they are making their way into commercial use as backup power sources for communications towers and power packs for warehouse forklifts, said Jennifer Gangi, program director of Fuel Cells 2000, a Washington, D.C., nonprofit outreach and education organization.
“They’re just better than the technology we have now,” said Gangi. “That’s the key. People aren’t going to switch to a new technology unless it’s better, more efficient.”
Protonex settled on RV owners for its first consumer product, betting that people with money to spend on a hobby and a desire to get outdoors would look at a product that, at least initially, will be a high-end purchase. Protonex has not yet priced the M250-B, but Pearson said it could initially sell for $8,000 to $9,000, with the price dropping in the future.
The Telegram and Gazette reported that the company is also planning to market the M250-B directly to consumers and sell it itself, rather than through dealers or other manufacturers that would repackage and sell the fuel cell under their own brands. Protonex, which employs about 95 people in Southborough and Colorado, plans to manufacture small quantities of the M250-B itself and find outside manufacturers to produce the fuel cell in larger volumes when necessary, according to Pearson. Protonex would even sell methanol directly to consumers so they could fuel their fuel cells.
“We’re going to start off directly controlling our own destiny, having reasonable margins, and we will probably expand into dealers,” Pearson said. “In today’s day and age, the Internet and UPS (United Parcel Service) allow us to do it.”
Housed in a black plastic shell, the M250-B weighs in at about 40 pounds and is designed to run for about eight hours on one gallon of methanol. Protonex adapted the product from a fuel cell for soldiers in the field and developed the M250-B to plug directly into an RV’s existing power system, providing enough electricity for a limited number of appliances but not air conditioning. The fuel cell recharges a battery which in turn powers the appliances.
According to the Telegram and Gazette, the size of the market for an RV fuel cell is unclear. An estimated 8.2 million U.S. households own at least one RV, according to the Recreational Vehicle Industry Association (RVIA), which sponsors the annual industry trade show where Protonex unveiled the M250-B in December.
RVs can use batteries, generators or connections to power sources at campgrounds. With fuel cells, “you’d have to have a big enough compartment to carry this thing, and you’d have to worry about carrying the fuel,” said Ron Barratt of West Warwick, R.I., president of the North American Family Campers Association, a group with chapters across New England.
Other “green” power sources for campers are also emerging. Barrett said some are installing solar panels on the roofs of their vehicles or rigging up wind power systems that cost less than $700.
Yet for signs that RV owners might embrace fuel cells, Protonex needs look no farther than Europe. SFC Smart Fuel Cells AG of Germany recently reported that 37 international motorhome manufacturers will make the company’s fuel cells available in 2009 models.
That kind of arrangement can be helpful for selling fuel cells, said David Redstone, editor and publisher of The Hydrogen Fuel Cell Investor, a Detroit-based newsletter.
“The advantage of having it in the RV is it kind of hides the price of it,” Redstone said.
David Coffin, director of motor home product development for the RV Group at Fleetwood Enterprises Inc. of Riverside, Calif., said in an e-mailed statement that RV consumers are ready for the benefits of fuel cells — no noise, no pollution, no additional weight and only a slight size increase.
But the cost of fuel cells and the availability of fuel, notably hydrogen for hydrogen fuel cells, remain stumbling blocks, he said.
“The key is to introduce fuel cell technology in areas that require the benefit of low noise and no pollution, such as military and remote home sites,” Coffin wrote. “As this occurs, the volume of fuel cell production will go up, the price will come down and at some point in the near future, the price will make sense for the RV consumers.”