ClearEdge investment validates fuel cell option

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Ford

ClearEdge Power's $1 million investment from Southern California Gas Co. isn't about the money.

Instead, it's about the validation. Russell Ford, ClearEdge's CEO, is convinced that the fuel cell is the technology of the future. Now ClearEdge has $1 million that says at least one major utility agrees.

"It's really catching fire and picking up speed," Ford said of fuel cell technology. "It's like the microwave. People used to be skeptical of it, but now you can't walk into a house without seeing one."

If the fuel cell market continues to pick up speed, ClearEdge could very well be a candidate for an initial public offering of stock. In addition to the $1 million from SoCalGas, ClearEdge closed on $25 million in private investment in 2010 and is seeking another round with the help of Goldman Sachs.

The SoCalGas investment is also one of three that ClearEdge is teeing up with utility partners. Ford said the utilities are lining up to partner with and invest in the Hillsboro-based fuel cell company as a way to demonstrate their commitment to alternative energy sources.

In the case of natural gas companies such as SoCalGas, there's the added benefit that fuel cells are powered by natural gas. ClearEdge's combined heat and power fuel cell, the ClearEdge5, reduces carbon emissions by one-third and other typical pollutants to trace levels, making it an attractive alternative for cleaner electricity generation.

The unit is designed to serve mid-sized commercial buildings, larger homes, small data centers and hotels. List price for theClearEdge5 is $56,000.

Ford said ClearEdge has about 100 units deployed on the West Coast and in Korea where the company signed a strategic partnership in June to deliver 800 of the fuel cells over three years.

But beyond the current installed base, ClearEdge is looking at a sales backlog of 1,000 units, Ford said. The company will expand its market to the East Coast in the coming year and will look to establish three overseas markets, through strategic partnerships, in 2012.

ClearEdge, which employs more than 200 people, will continue to manufacture its fuel cells in Hillsboro — at least for the North American market. The company will plan to add service centers and employees in the markets it serves, Ford said.

"All of our manufacturing, our research and development, our maintenance, all of those things are done domestically," Ford said. "And all of our supply sources are in North America."

As for the company's financial future, Ford said the company is in the midst of what he hopes will be its last private fundraising round. Beyond that: An IPO and a strategic acquisition are both options on the table for ClearEdge.

christinawilliams@bizjournals.com | 503.219.3438