How Bloom Energy blew through billions promising cheap, green tech that falls short
magazine story went to press several days before Bloom Energy’s Feb. 12 disclosure that it would be restating its prior four years’ financial statements, lowering revenue by up to $180 million, and adding $75 million to losses. Shares subsequently fell 25% in after-hours trading.s wildfires raged last October, more than a million northern Californians suffered through blackouts, their electricity cut in order to reduce the likelihood of high winds sparking new conflagrations.
This should be Bloom’s time to shine. “The natural gas, thanks to fracking, is already there,” Sridhar says. And yet, despite big promises, Sridhar’s boxes are highly unlikely to transform the grid in California, or anywhere else. The reasons are manifold, but boil down to this: Bloom’s technology is too dirty and too costly.
Don’t think for a second that Sridhar, 59, is discouraged. “This is a pretty amazing pace of progress,” he says, especially compared to where he got his start. He grew up in India, where power outages are common, and attended the National Institute of Technology Trichy, in the southern Indian state of Tamil Nadu, then came to the U.S. to get his Ph.D. in mechanical engineering.
But that wasn’t entirely true. Bloom insists it did sell some power that cheap, but only after applying generous subsidies and operating at a loss. It confirms its unsubsidized cost in 2010 was 19 cents per kwh. Now, after a decade of R&D and plunging natural-gas prices, it still costs about 13.5 cents per kwh to build, install, service and fuel these boxes. Subsidies like the lucrative federal investment tax credit knock off a bit more—1.5 cents in California.
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