Closing the gap between socioeconomic and financial implications of residential and community level hydrogen-based energy systems: Incentives needed for a bridge to the future

The use of hydrogen as an energy carrier has the potential to decrease the amount of pollutants emitted to the atmosphere, significantly reduce our dependence on imported oil and resolve geopolitical issues related to energy consumption.;The current status of hydrogen technology makes it prohibitive and financially risky for most investors to commit the money required for large-scale hydrogen production. Therefore, alternative strategies such as small and medium-scale hydrogen applications should be implemented during the early stages of the transition to the hydrogen economy in order to test potential markets and technology readiness.;While many analysis tools have been built to estimate the requirements of the transition to a hydrogen economy, few have focused on small and medium-scale hydrogen production and none has paired financial with socioeconomic costs at the residential level. The computer-based tool (H2POWER) presented in this study calculates the capacity, cost and socioeconomic impact of the systems needed to meet the energy demands of a home or a community using home and neighborhood refueling units, which are systems that can provide electricity and heat to meet the energy demands of either (1) a home and automobile or (2) a cluster of homes and a number of automobiles.;The financial costs of the production, processing and delivery sub-systems that conform the refueling units are calculated using cost data of existing technology and normalizing them to calculate capital and net present cost. The monetary value of the externalities (socioeconomic analysis) caused by each system is calculated by H2POWER through a statistical analysis of the cost associated to various externalities. Additionally, H2POWER calculates the financial impact of different penalties and incentives (such as net metering, low interest loans, fuel taxes, and emission penalties) on the cost of the system from the point of view of a developer and a homeowner.;In order to assess the benefits and costs of hydrogen-based alternatives, H2POWER compares the financial and socioeconomic costs of home and neighborhood refueling units to a baseline of "conventional" sources of residential electricity, space heat, water heat, and vehicle fuel.;The model can also calculate the "gap" between the financial cost of the technology and the environmental cost of the externalities that are generated using conventional energy sources.;H2POWER is a flexible, user-friendly tool that allows the user to specify different production pathways, supplemental power sources (renewable and non-renewable), component characteristics, electricity mixes, and other analysis parameters in order to customize the results to specific projects. The model has also built-in default values for each of the input fields based on national averages, standard technology specifications and input from experts.