Fuel Cell Microgrids Expected to Get a Boost From Trump’s Domestic Policy Bill, While Some Other DERs Suffer
While solar, wind and electric vehicle (EV) industry members are decrying the loss of Inflation Reduction Act (IRA) tax credits as a result of President Trump’s so-called “Big Beautiful Bill,” one technology stands to gain from the measure: hydrogen fuel cells.
Fuel cell microgrids could benefit from the new law, especially to provide power for data centers, said Jason Few, president and CEO of FuelCell Energy. That’s because microgrids could include fuel cells along with storage–which retains the Investment Tax Credit (ITC) under the law–and other distributed energy resources to help meet peak demand.
Inflation Reduction Act tax credits for fuel cells
Section 48E of the domestic policy law provides IRA tax credits for hydrogen and fuel cells–previously not eligible for the credits because of the potential to use carbon-emitting natural gas, Few said. The company expects to receive a 40% ITC on its projects, which includes a 10% bonus because 85% of the company's materials are sourced in the U.S.
The law also kept intact the direct pay provisions of the IRA, which allow nonprofits and companies with low tax burdens to receive direct payments instead of credits for fuel cell investments. The domestic policy bill also retained the ability to transfer ITC credits to entities with larger tax appetites.
Hydrogen fuel cells utilize an electrochemical process that converts the energy stored in hydrogen gas and oxygen into electrical power without combustion.
How fuel cell microgrids could power data centers
The tax incentives can help the company meet the needs of data centers, Few said.
“We can provide power where they are putting in data centers,” Few said. “We can deliver that solution in a microgrid architecture that will deliver resilience and reliability that data centers need, in combination with batteries or other assets needed for peaking demand.” The company is not now providing power to any data centers, but is pursuing some opportunities, he said.
In March, Mark Feasel, at the time executive vice president and chief commercial officer at FuelCell Energy, described a new idea to provide data center power with fuel cell microgrids powered by methane from coal mines plus distributed energy resources. He recently left the company and founded consulting firm VisRete .
FuelCell Energy is providing its system to Toyota's port-based vehicle processing facility that’s completely powered by on-site renewable energy.
The Fuel Cell and Hydrogen Energy Association said in a statement that the domestic policy law gives the U.S. hydrogen industry the flexibility it needs to grow.
Fuel cell industry growing globally
Globally, the industry is expected to reap big increases. A July 2025 report found that the global fuel cell market will climb to $18.16 billion by 2030, up from $5.66 billion in 2025, fueled by efforts to provide low-emission technologies for transportation, power generation and industrial applications.
In the U.S., Bloom Energy’s fuel cell microgrids helped out during the recent heat wave on the East Coast, which sparked grid outages. Bloom Energy supplied over 5 GWh of electricity across the region, said Bala Naidu, vice president of energy transition at the company. Bloom Energy’s microgrids include fuel cells and other distributed energy resources.
Fuel cell technologies aren’t always seen as clean because they often use natural gas. Few said FuelCell Energy can address this issue by recovering or capturing carbon dioxide.
Capturing and recovering carbon dioxide
Unlike gas turbines–which involve combustion that releases air pollution–FuelCell Energy’s fuel cells don’t require combustion, he said. In addition, the company’s platform can recover carbon dioxide, sequester it or upgrade it and use it in products like concrete, Few said.
Fuel cell microgrids will be especially helpful in meeting expected power demand increases, Few said. Driven by the need to power artificial intelligence, data centers and electrification efforts, U.S. electricity demand is expected to rise by 25% by 2030 and 78% by 2050 compared to 2023, according to ICF, a consulting and technology services company.
Fuel cell technology sidesteps the hassles of interconnection by providing baseload power behind the meter, Few said. It also avoids the long lead times–up to 7 years–that gas turbine suppliers are facing right now.
While the fuel cell industry is a winner in the domestic policy law, solar, wind and EV technologies are expected to take a big hit, hurting homeowners and businesses.
Domestic policy law will boost household and business energy costs
A report from Rapid Energy Policy Evaluation and Analysis Toolkit found that the “big beautiful bill” would increase U.S. household and business energy expenditures by $28 billion annually in 2030 and by more than $50 billion in 2035. It would boost the energy costs of the average U.S. household by about 7.5% in 2030 and over 13% in 2035. It would lower clean electricity generation in 2035 by more than 820 terawatt-hours (TWh)—more than the entire contribution of nuclear or coal to U.S. electricity supply right now.
These challenges to the clean energy industry are occurring just when every type of resource is needed to meet demand.
For FuelCell Energy, the expected demand increases present opportunities, especially with the availability of the ITC.
“We think that as a company right now we have a great opportunity to leverage this legislation to help meet the growth in demand,” Few said.
About the Author
Lisa Cohn
Contributing Editor
I focus on the West Coast and Midwest. Email me at [email protected]
I’ve been writing about energy for more than 20 years, and my stories have appeared in EnergyBiz, SNL Financial, Mother Earth News, Natural Home Magazine, Horizon Air Magazine, Oregon Business, Open Spaces, the Portland Tribune, The Oregonian, Renewable Energy World, Windpower Monthly and other publications. I’m also a former stringer for the Platts/McGraw-Hill energy publications. I began my career covering energy and environment for The Cape Cod Times, where Elisa Wood also was a reporter. I’ve received numerous writing awards from national, regional and local organizations, including Pacific Northwest Writers Association, Willamette Writers, Associated Oregon Industries, and the Voice of Youth Advocates. I first became interested in energy as a student at Wesleyan University, Middletown, Connecticut, where I helped design and build a solar house.
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