Green hydrogen production economics depend critically on electrolyzer technology selection. Three systems compete for large-scale global deployment: alkaline electrolyzers (AEL), proton exchange membrane (PEM) electrolyzers, and solid oxide electrolyzers (SOEC). Each offers distinct cost-performance characteristics that determine project suitability and the overall Levelized Cost of Hydrogen (LCOH).
Alkaline electrolyzers represent the most mature technology with decades of industrial deployment. Capital costs typically range from $500-$1,400 per kW, making them the most economical option for large-scale, baseload installations. . Operating at 63-70% efficiency, alkaline systems deliver robust performance with stack lifetimes of 60,000-90,000 hours. Replacement stacks cost approximately 40% of initial capital expenditure. Importantly, the technology relies on non-critical materials (e.g., nickel-based catalysts), avoiding supply chain vulnerabilities associated with rare metals. For Indian projects under the National Green Hydrogen Mission's 5 MMT production target, alkaline systems often provide the most bankable entry point.
PEM electrolyzers command higher capital costs, typically at $1,100-$1,800 per kW for the stack. This premium is justified by superior operational characteristics. Efficiency ranges from 67-82%, combined with extremely fast response times and high-power density, enabling seamless integration with intermittent renewable sources. This flexibility makes PEM ideal for grid-balancing applications where renewable supply fluctuates significantly. Leading suppliers include ITM Power and Nel ASA. However, the technology requires platinum group metal (PGM) catalysts, creating exposure to critical mineral price volatility. Stack degradation occurs faster than alkaline variants, requiring replacement every 30,000-80,000 hours. PEM economics justify the 50-80% cost premium over alkaline only when operational flexibility delivers measurable, quantifiable value.
Solid oxide electrolyzers utilize high-temperature steam (700-850°C) to achieve 77-84% efficiency—the highest among electrolyzer technologies . This high thermal efficiency means that when waste heat is available from industrial facilities or nuclear plants, SOEC systems can deliver the lowest Levelized Cost of Hydrogen. However, current capital costs exceed $2,000 per kW, and commercial deployment remains limited. Sunfire and Bloom Energy lead development efforts, with costs projected to decline below $1,000 per kW by 2030 as manufacturing scales. The engineering complexity of operating reliably at high temperatures currently limits widespread, non-specialized adoption.
System costs extend significantly beyond the electrolyzer stack itself. Balance of Plant (BoP) components—power electronics, gas treatment, compression, and installation—add 30-50% to base stack prices. The IEA projects overall system costs declining significantly by 2030 (to $200-500 per kW for alkaline and $450-850 per kW for PEM), though recent global inflation and supply chain disruptions have necessitated upward revisions in these optimistic forecasts.
India's electrolyzer market includes domestic manufacturers like Ohmium and Thermax alongside global suppliers. The country's expanding solar and wind capacity creates favorable conditions for electrolyzer deployment at scale.
The technology selection framework is clear:
The primary hurdle for all technologies is achieving the manufacturing scale and technological maturity that can deliver installed system costs below $500/kW, which is generally considered the threshold for green hydrogen to achieve widespread commercial parity with high-carbon alternatives.