Federal Investment Tax Credit provides incentive to purchase power plants that provide Brewery with greater energy independence and reliability
DANBURY, Conn.--(BUSINESS WIRE)--Dec. 6, 2006--FuelCell Energy, Inc. (NasdaqNM:FCEL), a leading manufacturer of efficient electric power generation plants for commercial and industrial customers, today announced that Sierra Nevada Brewing Co. will purchase the four 250 kilowatt Direct FuelCell® (DFC®) power plants that have been providing base load electricity and heat to the brewery's production processes during initial operations through a power purchase agreement (PPA).
Sierra Nevada on Dec. 15 will assume ownership of the DFC power plants, which provide a significant percentage of the brewery's daily electric requirements. By purchasing the units, the company will have greater control over its energy costs while honoring its commitment to environmental sustainability by operating a green facility. In addition, earlier this fall, FuelCell Energy announced that it had completed an upgrade of these power plants -- making it possible for Sierra Nevada to use fuel created from the waste by-product of its brewing process thus reducing the company's fuel costs by 25-40 percent.
"After witnessing the environmental and economic benefits of the DFC plants first hand, I am convinced that this technology is a great fit to help us meet our energy independence and sustainability goals," said Ken Grossman, Sierra Nevada's founder. "FuelCell Energy's plants and service teams are meeting all my expectations and purchasing the power plants outright is the next logical step to secure our energy reliability and reduce costs."
The U.S. Energy Policy Act of 2005 establishes a financial incentive for Sierra Nevada's acquisition by providing a 30 percent Investment Tax Credit (ITC) -- up to $1000 for each kilowatt -- for the purchase of fuel cell power plants. FuelCell Energy estimates this tax credit will translate to a savings of approximately 1.5-2.0 cents per kilowatt-hour (kWh) for Sierra Nevada.
"The financial benefits from the ITC and accelerated depreciation are added benefits that should continue to increase our DFC sales going forward," said R. Daniel Brdar, President and CEO of FuelCell Energy. "Leading edge companies that want ultra-clean, efficient power, can substantially reduce their capital costs with these programs."
DFC power plants address significant energy issues in California -- high energy costs, strict air quality standards and greenhouse gas emissions. The high efficiency of DFC power plants not only results in less fuel needed per kilowatt hour of electricity and lower operating costs, but reduced amounts of carbon dioxide as well. In addition, DFC power plants provide greater energy reliability and energy security because they are located directly at customer sites, like Sierra Nevada.
A 2005 study by Energy Insights Inc. determined California represents a nearly 1,000 MW opportunity for locations addressable by on-site, ultra-clean power delivered by FuelCell Energy's DFC power plants. The state continues to be a strong supporter of fuel cell technology by providing financial and regulatory support. In addition, because DFC power plants meet the California Air Resources Board (CARB) stringent emissions requirements for 2007 standards, their permitting process is streamlined and they qualify for preferential rate treatment by the California Public Utilities Commission (CPUC).
About FuelCell Energy, Inc.
FuelCell Energy develops and markets ultra-clean power plants that generate electricity with higher efficiency than distributed generation plants of similar size and with virtually no air pollution. Fuel cells produce base load electricity giving commercial and industrial customers greater control over their power generation economics, reliability and emissions. Emerging state, federal and international regulations to reduce harmful greenhouse gas emissions consider fuel cell power plants in the same environmentally friendly category as wind and solar energy sources -- with the added advantages of running 24 hours a day and the capacity to be installed where wind turbines or solar panels often cannot. Headquartered in Danbury, Conn., FuelCell Energy services over 50 power plant sites around the globe that have generated more than 140 million kilowatt hours, and conducts R&D on next-generation fuel cell technologies to meet the world's ever-increasing demand for ultra-clean distributed energy. For more information on the company, its products and its worldwide commercial distribution alliances, please see www.fuelcellenergy.com.
This news release contains forward-looking statements, including statements regarding the Company's plans and expectations regarding the development and commercialization of its fuel cell technology. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Factors that could cause such a difference include, without limitation, the risk that commercial field trials of the Company's products will not occur when anticipated, general risks associated with product development, manufacturing, changes in the utility regulatory environment, potential volatility of energy prices, rapid technological change, and competition, as well as other risks set forth in the Company's filings with the Securities and Exchange Commission. The forward-looking statements contained herein speak only as of the date of this press release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statement to reflect any change in the Company's expectations or any change in events, conditions or circumstances on which any such statement is based.
FuelCell Energy, Inc.
Lisa Lettieri, 203-830-7494
Ward Hill Marketing
for FuelCell Energy, Inc.
Dan Esdale, 978-794-5441
On-Message Public Relations
for FuelCell Energy, Inc.
Jack Jackson, 781-898-9585 x-715
SOURCE: FuelCell Energy, Inc.