In recent years, the energy landscape has undergone notable transformations, with a marked shift towards distributed energy applications. Among various technologies, Solid Oxide Fuel Cells (SOFC) stand out due to their impressive energy conversion efficiency and flexibility concerning fuel options. SOFC technology is being regarded as a pivotal player in diverse applications, including combined heat and power (CHP) systems for data centers, marine power solutions, and gasification electricity generation. Countries such as the United States, parts of Europe, and Japan have largely transitioned to the commercial operation phase for SOFC technologies. Meanwhile, China finds itself in a transitional stage from industrial demonstration to commercial deployment, with significant potential growth evidenced by companies engaged in the production of SOFC materials, single-cell manufacture, and comprehensive system design, such as Sanhua Group and Weichai Power.

One of the insights from Guojin Securities highlights that Solid Oxide Cells (SOC) — which encompass both SOFC and Solid Oxide Electrolyzer Cells (SOEC) — are set to be a cornerstone of future energy systems. SOCs are high-temperature, all-solid-state devices that can convert chemical energy from fuels like hydrogen and natural gas into electricity, while also storing renewable energy, such as solar and wind, in the form of hydrogen fuel. Among electrochemical energy conversion and storage technologies, SOCs are lauded for their cleanliness and efficiency. They possess unique dual functionality, evidenced by their low material costs (they do not require precious metals), high efficiencies (with power generation efficiencies nearing 60% and recovery efficiencies potentially reaching 85%), and inherent fuel flexibility. Current development efforts are centered on enhancing reliability, longevity, and cost-effectiveness.

The application opportunities for SOFC technology are vast, particularly in fixed locations, making it one of the fastest-growing solutions for alternative backup power. A report by Grand View Research forecasts that the global SOFC market will reach approximately $620 million in 2023, with a compound annual growth rate (CAGR) of 36.8% from 2024 to 2030, potentially growing to about $4.054 billion. The United States is expected to lead as the largest and fastest-growing market in the sector, followed by Europe and China. As of 2023, SOFC systems hold an 81.49% market share in stationary applications, especially in combined heat and power systems and data centers.

Research indicates that in 2023, approximately 51.9% of all SOFC terminal applications will be utilized in commercial sectors, such as heating, while around 40% will be directed towards powering data centers, contributing to a market size of about 229.2 billion USD. Interestingly, SOFC deployments in data centers will account for roughly 1.1% of the total market for data center power solutions. It is expected that with advancements in battery technology and decreasing costs, the penetration of SOFC systems in data centers will witness a significant rise.

The essential elements for successful commercialization of SOFC technology lie in achieving high reliability, extended lifespan, and competitive cost levels. The selection of core component materials is crucial in determining the performance of SOFC systems. The use of specialized processes, unique equipment, and high-cost materials is pivotal in efforts to realize substantial cost reductions and advancements in manufacturing. Currently, stack costs represent around 40% of total system costs. However, once production scales exceed 100 MW, these costs could potentially decrease to between 20% and 30% of current levels. If SOFC systems achieve a lifespan of 50,000 hours while lowering system costs to below 10,000 RMB per kW (approximately $1,540), they will be positioned competitively within the market. Trends in future development will see a focus on enhancing lifespan through advancements towards high-power, flat-panel metal supports.

On a global stage, countries like the U.S., Japan, and certain European nations have entered the early commercial phase of SOFC technology, with technological maturity progressing steadily. Despite this growth, there are only a handful of companies capable of delivering large-scale commercial SOFC products, including U.S.-based Bloom Energy and FuelCell Energy, the UK's Ceres Power, Germany's Sunfire and Bosch, Estonia's Elcogen, Japan's Mitsubishi Heavy Industries, Kyocera, and Aisin Seiki, as well as South Korea's Doosan Group and SK E&C. When examining global SOFC companies based on annual power generation capacity, fewer than ten firms achieve megawatt-level output.

In contrast, China faces challenges due to reliance on foreign technology for critical components, leading to a noticeable gap in overall technological capabilities. With limited policy support, a nascent supply chain, and an underdeveloped market, the domestic SOFC application landscape has yet to flourish. Nonetheless, emerging players within China’s SOFC sector are gradually making headway. For instance, Chaozhou Sanhua has successfully developed mass production capabilities and serves as a supplier for Bloom Energy's raw material membranes. Meanwhile, Weichai Power has begun to expand its operations after acquiring Ceres Power. The potential of SOECs as innovative water electrolysis technology is acknowledged, but domestically, the technology remains in the experimental stage and has not yet been extensively commercialized.