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Shunskei Ugajin stands next to the hydrogen fuel cell behind his home in the Tokyo suburb of Urawa.

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Steve Chiotakis: You've probably heard about hydrogen fuel cells for the car. Well, how about for the home? For Americans, it might sound like a far-off reality. But in Japan, home fuel cells are gaining in popularity. From station KQED, Rob Schmitz reports from Tokyo.


Rob Schmitz: Ever since Shunskei Ugajin got a hydrogen fuel cell, he's been the most popular guy on his block. Neighbors come over just to gawk at it. It stands proudly behind his house in Urawa, outside Tokyo.

Ugajin shows off two steel boxes that look like refrigerators -- one at full size, the other the size of one you might see in a dorm room. Inside the small box, hydrogen is separated from his home's natural gas line. The fuel cell then operates like a battery, generating enough electricity to power the entire house. The heat given off in the process travels to the large box to heat the home and the home's water.

Inside, a display shows the carbon saved: a typical fuel cell cuts carbon dioxide emissions by a ton per year. That's around an eighth of what an average home produces.

What they won't save -- yet -- is money: Buying one will set you back about $30,000 U.S. But a government subsidy that covers half the bill has spurred several Japanese companies to start mass producing them.

At Panasonic's new fuel cell factory outside of Kyoto, special training computers instruct a row of 16 workers on how to build the cells. Analysts expect the price to drop to $5,000 a piece within five years.

Ikutoshi Matsumura, director of Japan's Fuel Cell Association, says by 2050, 1 in 4 homes in Japan will run on a fuel cell.

Ikutoshi Matsumura (voice of interpreter): Each of these fuel cells has more than a thousand parts that are manufactured by more than 200 companies. If our market expands like we foresee, that will be a significant contribution to the Japanese economy.

And that success is attracting worried observers from across the Pacific -- like Scott Samuelson, director of the California-based National Fuel Cell Research Center.

Scott Samuelson: And the United States market for residential fuel cells should be inspired by the success, but also very concerned by the success.

Samuelson says Japan is a decade ahead of the U.S. in the lucrative residential fuel cell market, but the U.S. has made strides in the industrial sector. What the U.S. needs, he says, is a strong commitment to develop the residential sector, but in this economy, he's not holding his breath.

In Tokyo, I'm Rob Schmitz for Marketplace.

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