ClearEdge to sell fuel cells in Korea
By Erik Siemers, Business Journal Staff Writer
Business Journal Staff Writer
ClearEdge Power on Tuesday said it has reached a three-year agreement with LS Industrial Systems to distribute 800 of its hydrogen-powered fuel cells throughout Korea in a deal valued at $40 million.
The move also marks the first significant geographic expansion for the fast-growing Hillsboro-based manufacturer, which last year began selling fuel cells almost exclusively into California.
ClearEdge’s core product is the ClearEdge5, a combined heat and power device capable of generating five kilowatts of power an hour using hydrogen extracted from natural gas. Aside from the electricity it generates, the heat produced by the system can be used for water or space heating.
The system is designed as a power source for small businesses or residences larger than 4,000 square feet.
Under the deal announced Tuesday, LS Industrial, a $1.5 billion Korea-based distributor of industrial electric and automation products, will focus on the sale, distribution and service for 800 ClearEdge5 fuel cell units in Korea.
In a news release, LS said recent federal Korean legislation encourages new buildings to use alternative power sources such as fuel cells.
A spin-off of electronics giant LG Group, LS Industrial Systems embarked upon a worldwide search for fuel cell manufacturers and settled on ClearEdge after first approaching the company a year ago, said Mike Upp, ClearEdge’s vice president of marketing.
To date, ClearEdge has focused mostly on the California market, where the state’s high energy costs combined with state and federal tax credits make the systems more marketable.
The company has grown from 33 employees in January 2009 to 150 today.
It had installed its first six fuel cells by January and now has 25 fuel cell systems installed. The company is now ramping up production at its Hillsboro manufacturing plant with the goal of having between 350 and 500 systems installed by the end of the year.
Based on its $56,000 list price, that would give the company around $30 million in annual revenue, excluding the installation costs, which can reach between $12,000 and $20,000 per system.
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