Ballard to Supply 10,000 Fuel Cells to India

"This new low-cost, natural-gas fuel-cell product will be an important enabler for the acceleration of product adoption in other stationary power markets," Sheridan said in the statement.

The use of a fossil fuel might raise questions about the environmental benefits of the fuel cells. After all, natural-gas fuel cells emit carbon dioxide and sulfur, while hydrogen fuel cells' byproducts are water and heat.

But according to the Edison Electric Institute, the emissions are far lower than in other methods of converting natural gas into electricity, such as the turbines used in power plants, because fuel cells don't burn the gas.

And most hydrogen today -- 95 percent, according to a 2006 Popular Mechanics story -- is made from natural gas.

Ballard wouldn't disclose the size of the deal. But each fuel cell will deliver a gross power output of 7 kilowatts, McAree said. (The announcement said the net power level would be 5 kilowatts.)

The company has previously said it is targeting a price of about $500 to $800 per kilowatt, and -- because of the large volume of this deal -- the price will likely be toward the lower end of that range, he added.

At $500 per kilowatt and 7 kilowatts per cell, the price would be $3,500 per cell, indicating a deal size of at least $35 million.

Fuel cells produce power by mixing fuel with air and water inside a thin, reactive film membrane. They store energy, like batteries, but can produce electricity as long as they have fuel -- meaning they can be quickly refueled instead of recharged.