CLEVELAND, Ohio, 25 July 2007. Commercial demand for fuel cell products and services -- including revenues associated with prototyping, demonstration, and test marketing activities -- will expand nearly sixfold to $2.5 billion in 2011 and reach $8.5 billion in 2016.

Despite the small size of fuel cell technology's current commercial footprint, a number of viable markets are expected to develop over the next 10 years as technological advances and economies of scale help drive costs down to competitive levels.

High energy prices and environmental concerns will also contribute to fuel cell commercialization activity and market gains. As additional products enter the marketplace, commercial sales will make up an increasingly large share of total fuel cell expenditures. However, it will take time for fuel cells to penetrate markets now served by other power sources, and commercial demand will continue to account for less than half of all fuel cell spending in 2016. These and other trends are presented in "World Fuel Cells," a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.

With a number of products now on the market, electric power generation applications accounted for well over half of all commercial fuel cell sales in 2006. However, the portable electronics market is forecast to register the strongest growth through 2011 and beyond, rising from what are presently extremely low levels of demand, as commercialization activity picks up. Demand for fuel cell-powered motor vehicles will also rise at a healthy rate, driven by increases in prototyping, demonstration and test marketing activity as fuel cell technology continues to improve and manufacturing costs decline.

In 2006, five countries -- the U.S., Japan, Germany, Canada, and the U.K. -- accounted for four-fifths of all commercial fuel cell demand. These and other developed nations will continue to account for the vast majority of product and service sales over the next decade, with a few notable exceptions, like China. Most developing countries are not expected to become sizable fuel cell markets until some time later, due both to less evolved end-use sectors and a scarcity of capital to invest in early-generation fuel cell systems. However, fuel cells will find some use as a source of electricity in developing nations with inadequate central power grids.