[BETA] Fortnightly

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Looking for Fuel Cell Technology's Future.

As of Oct. 1, the 52-week high on the stock of Plug Power Inc., perhaps the highest-profile fuel cell company of the last few years, was 39.125 per share. The price-per-share on Oct. 1? $9.50. Assumedly, the plummeting stock was the result of the shareholder lawsuits against the company following a combination of heavy insider trading and announcements of delayed product launches. But Plug Power isn't the only fuel cell company whose stock has sunk. Some recent price histories for other fuel cell stocks:

• H Power Corp.'s 52-week high: $34.50; its Oct. 1 closing price: $3.10
• FuelCell Energy Inc.'s 52-week high: $54.375; its Oct. 1 closing price: $15.62

By definition, fuel cell stocks fall in the technology sector. Therefore, such is the plight of a technology stock, an observer from outside the industry might say. But fuel cells have nothing to do with the Internet, nor do fuel cell companies sell their wares to other technology companies. So what gives? Has the fuel cell lost its luster for good?

That might depend on how you define luster. There is no question that past hoopla over fuel cells when looking at the near-term was overblown. Power technology stocks, in fact, also are down in general. Anyone who three or five years ago was expecting at least some of his or her next-door neighbors to be owning a fuel cell generator by now is certainly disappointed.

But those people apparently did not consider that most products take time to truly penetrate a market. The most common lexicon dominating the fuel cell discussions these days are words such as "niche," "creeping," and "special need." In order for any mass market to develop, consultants and fuel cell company executives alike say, a product has to start small, take root, and then blossom. Consumer electronics, for example, typically start out as high-end products, with a small percentage of the population making purchases, allowing prices to be driven down gradually. And so it will go with fuel cells.

"I think the reason why most companies in this space have their stock price down right now is obviously that it's taken longer to commercialize the technology than people had originally hoped," says Paul McNeill, vice president, business development at H Power. "I do believe that fuel cells [are] going to be a huge industry in the course of the century. It's taking a little bit longer to get this product out to market than people had hoped."

In this ? That is suggesting a much longer-term commitment than most any investor is willing to wait. McNeill, though, is not saying that fuel cells won't make inroads in the near-term. He is only suggesting that the proliferation of fuel cell usage will be a gradual phenomenon-a concept that the markets apparently didn't consider when, say, Plug Power's stock was approaching $50 per share.

Fuel cells are going to start contributing to power needs almost immediately, experts say, but that contribution will start in little ways. Today fuel cell companies look to exploit