Here's What's Behind the Fuel Cell Mania

NEW YORK (TheStreet) -- Renewable energy shares, like those of energy and computing stocks, exhibit a pattern of boom and bust.

Like energy stocks, the macro picture is defined by the price of energy. When oil prices fell in the 1980s, the renewable energy market collapsed with everything else. Its recovery today isn't just about climate change, but the ability of renewable companies to keep costs falling while fossil fuel costs keep rising.

Like computing stocks, renewable energy booms come in technology waves. A boom followed by a bust is followed by a shakeout that creates true investments.

I have seen the pattern repeat in areas from PCs to software to multimedia, the Internet, the cloud and the social Web. When a boom hit five years ago in solar panels, it seemed to be a necessary prelude to a shakeout.

Sure enough, most solar panel makers failed to make it through the bust, but a few including First Solar (FSLR), SunPower (SPWR) and China's Yingli Green (YGE) have bounced back, their values doubling over the last year.

But solar power, like wind power, has a problem. It's intermittent. For the field to grow, there needs to be ways to match intermittent supplies to variable demands.

That's what the current boom is about. Companies like Plug Power (PLUG), FuelCell Energy (FCEL), ZBB Energy (ZBB), Hydrogenics (HYGS) and Ballard Power Systems (BLDP) are all offering technologies that promise to integrate renewable energy supplies into electric demand.

Most of these companies are unlikely to survive. Just as there were multiple approaches to the solar panel market, each with its own cost structure, so there are multiple approaches to this market, and only those companies that can perform will make it.

Plug Power is pushing hydrogen fuel cells, which reverse the process of your old electrolysis experiments, combining hydrogen and oxygen, yielding energy and water. Plug Power units are portable and can even be integrated into forklifts.

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