Bloom Box and Solar Power: Sorting Out the Hype & Controversy

It’s been several weeks now since Bloom Energy unveiled its “Bloom Box.” It’s a new and allegedly affordable solid oxide fuel cell that comes in a small package no bigger than a refrigerator. The point? To someday soon take every home off the grid. Or at least that’s the hope of company founder and CEO K.R. Sridhar. Beginning, after eight years in hiding, with an already famous 60 Minutes story and an official unveiling at eBay’s headquarters, the Bloom Energy Server has received all kinds of hype and some powerful financial backing.

eBay, Google, FedEx, Staples and other large companies (20  in total) have been secretly testing the boxes for months to apparent satisfaction. The Bloom Box, which is now only available in commercial-sized, 100-kW units, holds thousands of thin ceramic discs with specially formulated “inks” printed onto either side. It works as oxygen comes in one side of the box, fuel on the other, and when the oxygen and fuel converge on each disc they create a chemical reaction that produces electricity. Simple.

Fuel cells are nothing new but have always been too expensive for commercialization, requiring expensive elements like platinum. Sridhar and Bloom Energy’s breakthrough is the use of cheaper materials — ceramic discs made from readily available sand and a cheap metal alloy between discs. In the end, Sridhar claims he will have a small 1-kW system that could power an entire home for just $3,000, making it cheaper than leading renewable rival solar power and cheaply eliminating the need for the electric grid as we know it. With such amazing claims, it’s no wonder the Bloom Box has received so much hype. But is it really worth it? And are these claims really possible?

The Fuel

Google and eBay’s units are currently running off natural gas, a fossil fuel, although eBay plans to switch soon to biogas, making the units carbon-neutral. Even with natural gas, says Bloom Energy, its units require half as much as a comparable conventional power plant, thus making it a “low-carbon” source that also reduces transmission losses because the electricity is produced on-site.

The Bloom Box can also run off ethanol, landfill gas, traditional fuels and, apparently, solar power. But in the foreseeable future, it looks like natural gas, for which service is more readily available, is the fuel of choice. That nullifies implications that the Bloom Box is the next big renewable resource. It is merely a more efficient way of processing a fossil fuel — not bad, but not “clean” either.

24/7 Power

The Bloom Box can create electricity ’round the clock, which rival solar power cannot do without a battery backup system. The boxes work constantly, converting gas and oxygen to electricity. A residential box would sit in your backyard sucking up air or, I imagine, it could be placed in a garage with an air line running to it.

But working 24/7 at such high heat brings up reliability issues yet to be worked out. How the ceramic discs will hold up over the long term remains to be seen. Maintenance could be an issue and an expense. Bloom Energy expects that the discs would have to be replaced twice in 10 years, which is how long its maintenance contract with eBay is good for, according to Fast Company. Does that portend the expected life span of a Bloom Box? That’s only half as long as most solar panel warranties, and panels are widely accepted as lasting 30 to 40 years and longer (although at slowly declining efficiencies).

Also, the Bloom Box is to run constantly, something that works nicely for Google or eBay data centers, but perhaps not so nicely for homes that don’t require a constant flow of electricity. The Bloom Box too would need some sort of energy storage device, unless the Box itself can store energy for on-demand use. If that’s the case, then I can understand how a 1-kW box could power an entire home. Otherwise, I have to be skeptical and posit that two, three, or even four boxes might be necessary, especially in the United States. And excess power would have to be sent somewhere or go to waste, meaning that maybe Bloom Energy hasn’t found a way to eliminate the need for the electric grid (Sridhar does claim that utilities should love him because they can buy the Boxes, install them in a neighborhood and sell the electricity).

Generation versus Conversion

While solar power cannot produce 24/7 power without some storage system, it is at least an energy generating system. It seems the media and possibly Bloom Energy are enjoying this misconception that the Bloom Box is a power generator, but it is more of a conversion device — converting stored energy into usable electricity. Now that’s not necessarily a bad role for the device, especially since it can perform the conversion at twice the efficiency of a traditional power plant, but it is not inherently carbon-neutral and it may not be fair to compare it to solar power.

Sridhar himself told 60 Minutes that the Box could run off solar power (although if you watch the segment you may notice choppy editing which likely eliminated some caveats from being aired to “sexy up” the piece). Whether it can run on solar or not, the Bloom Box cannot be the renewable resource the hype would have us believe without being connected to some other power source, like solar power.

Affordable or Cheap Math?

Weirdest of all to me have been the odd claims about the affordability of the Bloom Box, accompanied by claims of a three-to-five year payback in energy savings (at least for commercial models). eBay has been quoted as saying they expect their boxes to pay for themselves in that time span, and they are already impressed by energy savings of $100,000 in nine months from the five boxes they purchased, apparently, for between $700,000 and $800,000 each.

But the math just doesn’t work out. Just using the low end, eBay’s investment into five Boxes would total $3.5 million. Doing a little math of my own, I can figure that eBay will save roughly $133,000 in its first year of “Bloom Boxing.” Without incentives, that would work out to a payback of more than 26 years.

Now the Bloom Boxes (and fuel cells in general) are eligible for the 30-percent federal tax credit and, according to 60 Minutes, a 20-percent credit on top of that from the state of California. So with a 50-percent discount, eBay’s initial investment would slice in half to $1.75 million, as would the system’s payback period, which reduces to 13 years. That is still way beyond claims made by eBay and Bloom Energy. Unless eBay secretly paid some low amount for testing the product and the media is misleading us (they never actually say specifically that eBay paid $800K per box), or I am somehow missing all the numbers.

Perhaps it would make a difference if a free fuel source like, say, solar energy, was introduced. I mean, eBay or any Bloom Box owner must still pay the price for incoming natural gas, even if they’re getting twice the electricity out of it. And when you factor in potential maintenance costs, especially if you expect the Box to last longer than 10 years, then the economics behind the Bloom Energy Server get even more muddled.

From what I can tell, solar power is much cheaper than the Bloom Box at present, or at least equal to it if eBay’s claims are only marginally off. What Sridhar is saying sounds great, and he has some reliable companies and people (including Bloom Energy board member Colin Powell) backing him up, but so far it all sounds like so much air.

Time Will Tell?

I don’t want to deny the incredible implications of Bloom Energy’s famous “Box.” I would love to see a device like this in every garage powered by rooftop solar panels — all done cheaply and without power lines. But that is a long way off, even by Bloom Energy calculations. This miracle-cure, the $3,000-dollar home-powering, itty-bitty Bloom Box is probably 10 years away from commercialization, much like a lot of solar power innovations.

In fact, in the renewable energy industry, it seems like “within 10 years” is just the de facto phrase uttered when people ask how long before a given product hits the market. Within 10 years we may see Daniel Nocera’s water-splitting, solar-powered fuel cell powering homes and electric cars without any grid power. And he already has a design and plan  laid out that utilizes solar power. Where will solar technology be in 10 years? Wind technology? Geothermal?

My point is that while the Bloom Box deserves some hype, especially if we believe the claims put out by its proponents, it deserves no more than any other budding energy technology. Furthermore, it’s been a few months since this hype began, and I know I’m not the only blogger in the world to raise these questions, but still no clarification has been received. How can three to five years be the payback period? How can a 1-kilowatt Bloom Box power a home consistently? These remain unanswered.

Mr. Sridhar is an idealist. “It’s about seeing the world for what it can be, not what it is,” he told CBS. Well perhaps he’s idealized his numbers. On the other hand, he’s raised $400 million in venture capital investments — a huge amount for a single start-up, especially one that didn’t reveal what it was up to for eight years.

Can you tell me what these investors know that I and many like myself do not?

Photo Credit: NoeLife, LA Times & blogdowntown

Posted on April 15th in Solar News by Dan.