Technological advances and economies of scale will eventually drive the cost of fuel cells down to a competitive level, according to a report from the Freedonia Group, Inc., a Cleveland-based industrial market research firm. According to the firm's forecast titled “Fuel Cells,” the U.S. commercial market for fuel cell products and services will increase tenfold to $1.1 billion by 2008. By 2013, the market will reach $4.6 billion, which includes revenues for prototyping and marketing activities and product sales. Freedonia expects many different markets for fuel cells, such as electrical power generation and portable electronics, to develop over the next decade. Electrical power generation has emerged as the first large-scale commercial market for fuel cells, and fuel cell systems used as remote power supplies for construction sites, grid support, and cogeneration will account for more than half of all demand in the next four years. The portable electronics market, which once experienced low levels of demand, will become the second largest market for fuel cells. Proton-exchange membrane (PEM) fuel cells will continue to account for the largest share of stack and system demand through 2008, followed by solid-oxide fuel cells (SOFC). The demand for direct methanol fuel cells (DMFC) will grow at an above-average pace, but will lag behind the sales for both the SOFC and PEM fuel cells. The Table (click here) describes the demand for fuel cells in various U.S. markets.