The fast-growing appetite for efficiency among energy-conscious people has led many leading automakers turn their gaze toward the new alternative energy source. This has led to fierce competition to capture the people's imagination, and market share.

While fuel cells for home use are lagging their automotive counterparts, Bae Joon-kang, chief executive officer of GS FuelCell Co., said people can expect to see more fuel cell-powered living rooms and hot running water in years to come.

"Currently, the government plans to supply 10 thousand household fuel cell generators nationwide. The figure will reach 750 thousand in 2020 and 3.5 million in 2040," the 43-year-old former engineer told The Korea Herald.

"If we suppose about one million gas-fired household boilers are sold annually, with technological advances and commercialization, that can be our market."

Considering financial savings from lower electricity consumption and higher fuel efficiency, he forecasts lower prices for fuel cells will generate increased demand in coming years.

"The fuel cells have other various functions, compared to conventional gas-fired boilers. So if the household fuel cell generator is priced below two million won ($2,050), it can completely dominate the current home heating system market," Bae said.

"Even with a price tag of five million won, they could win market share," he added.

His outlook is based on a wide array of benefits that the fuel cell generators are expected to provide consumers.

Generating electric power and heating at the same time, Bae estimated the recently-developed fuel cell generator will use about 26 percent less gas and on average emit 40 percent less carbon dioxide.

"To produce one kilowatt of electricity through our fuel cells, it costs around 150 to 160 won per hour in natural gas consumption. But electric charge for the same amount hovers around 300 to 400 won," he noted.

"Taking the extra free heating into account, the profit margin could offset the relatively high price of fuel cell generators."

In addition, office buildings and factories could see bigger returns on the investment with the alternative energy source, because they pay less for gas than households.

Government roadmap

Despite such promising prospects, Bae said fuel cell manufacturers should work closely with the government, because the home use fuel cell market is yet to get off the ground.

"Demand will neither abruptly pop up, nor will producers suddenly reduce the unit price to speed up the commercialization process," he said.

"We have to move in tandem with the government's blueprint."

According to the government's fuel cell backup scheme, one kilowatt household generators are to hit the market with a price tag of some 10 million won in 2011.

The Commerce Ministry unveiled the plan last week to test-run 40 fuel cell-powered generators this year with over 20 billion won plowed in the commercialization plan.

"The generators will be running in 750 thousand homes nationwide by 2020, and the number will go up to 3.5 million in 2040 according to the government's timeline," Bae noted.

Fast-moving Japan

However, he is concerned that the ministry's road map still falls far behind the rather more ambitious Japanese government and developers, which Bae considers to be potential threats.

"The Japanese government began testing the household fuel cells in 2002 under the guidance of its energy development organization, NEDO," he said.

"They aim to decrease the unit price to one million yen ($9,000) in two years," he added.

This suggests that energy-conscious Japanese consumers will go shopping for the more affordable fuel cell generators in Tokyo after 2008, at a time when a minimum number of Korean houses are still being tested.

The Japanese advances are of concern to Bae, who said "The Japanese industries, colleges, researchers and government are expressing the exact same goal. That is to launch price-competitive products in 2008."

This, Bae said, would give the Japanese a major advantage, "Japanese rivals could tap the Korean market sooner on the back of larger production capacities and lower prices," he said.

Time matters

But Bae emphasized his six-year-old company is equal to any Japanese company, at least on the technological front.

"I think we have almost overtaken foreign rivals technologically," he said.

"The point is how we can secure the products durability to get more trust from consumers," he added, underlining that the fuel cell generator should run 24 hours a day for some 10 years.

Bae said the Japanese have the advantage of having several years testing to their credit, and that again gives them an edge.

"Fuel cell development is not like some hotshot venture which can make a fast return on short-term investment," he said.

"Time matters in this business."