FuelCell Energy (FCEL) Stock: Here’s Why It’s Flying

FuelCell Energy FCEL Stock News

FuelCell Energy Inc (NASDAQ: FCEL) is continuing for the top in the premarket hours this morning, following up on the gains the stock saw on Friday. The move started when the company announced a relatively modest government contract. However, the size of the contract is irrelevant and what it means for the future is big news fo FCEL, Plug Power (NASDAQ: PLUG) and others in the hydrogen fuel cell space.

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FCEL Stock Could Be A Big Win Long-Term

In a press release last Friday, FuelCell Energy announced that it was selected by the United States Department of Energy’s Office of Energy Efficiency and Renewable Energy and the Office of Nuclear Energy, for a funding award. The company will receive $8 million to support the design and manufacture of a SureSource electrolysis platform that’s capable of producing hydrogen.

The company said that once the system is complete, it will be delivered to Idaho National Laboratories for extensive testing to confirm the electric efficiency, as well as the ability to use nuclear power plant waste to heat and obtain higher efficiencies of up to 100%.

What’s The Big Deal?

In the grand scheme of things, an $8 million contract is a drop in the bucket when it comes to government contracts. So, what’s the big deal? Again, it’s not the amount, it’s what the contract signifies.

Energy from fuel cells, like those produced by FCEL, is very clean. In fact, the only waste product created through fuel cell energy generation is water. With the world pushing to clean energy, fuel cells are being touted as the next big development in the space.

However, for a fuel cell to work, you have to have hydrogen. So, in order for the fuel cell industry to take off, there needs to be a steady supply of this gas. That’s exactly what this contract surrounds. If all goes well, FCEL will be able to produce its own hydrogen at an efficient rate, essentially creating its own supply chain.

So, $8 million is a drop in the bucket, but when it comes to what the money will be used for, this is massive news for FuelCell Energy and all involved.

The Bottom Line

The bottom line is that the world is pushing to clean energy. Fuel cell technology could very well become a major part of how we get there. With FCEL working with the United States government to produce a technology that generates hydrogen, the company could quickly become a cornerstone in supply to the entire budding fuel cell industry. All in all, FCEL is a stock that’s worth paying very close attention to.

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