Innovation And Market Entry In The Energy Industry: Lessons For Fuel Cells And New Technologies

Abstract

Regulatory, environmental, and market changes are spurring new technological development in the energy industry.  Fuel cells are the largest new entrant to the energy industry, and this technology faces enormous challenges in entering the transportation and power generation markets.  Potential barriers include slow market acceptance, the resistance of incumbent energy firms, the lack of hydrogen infrastructure systems, and significant design and engineering obstacles.  This paper compares challenges faced by the fuel cell industry to those faced by several previous breakthrough energy technologies – including incandescent light bulbs, fluorescent light bulbs, and combustion turbines – all of which faced comparable market entry challenges before ultimately succeeding.  Results of this study and historical comparison show how other energy companies and industries overcame similar and daunting barriers.  Lessons from these earlier success stories include the need for critical enablers such as using niche markets to sustain R&D, building new infrastructure systems or conforming to existing ones, and benefiting from favorable public policies.