Leading developer of fuel cell power plants, FuelCell Energy Inc. FCEL announced the execution of a definitive term with Pepperidge Farm, Inc. to install a 1.4 megawatt Direct FuelCell (“DFC”) power plant at its bakery in Bloomfield, CT. Pepperidge Farm is a U.S.-based commercial bakery concern.

The power plant, based on a power purchase agreement (“PPA”) with Pepperidge, will be manufactured, installed and serviced by FuelCell Energy while the former pays for the power.

FuelCell Energy will set up the second DFC power plant adjacent to the existing DFC plant that was installed at the bakery in 2008. This action will complement the older DFC plant which has been generating savings for the bakery through reduced cost of power and reducing carbon emission since its installation.

The construction works are expected to start in no time with the commencement projected at the end of this year. The contract also includes the provision for a multi-year extension of the service contract for the existing DFC power plant.

Both the facilities will produce power through an electrochemical process with virtually no pollution. They will lower emissions of 9,400 tons of carbon dioxide (CO2), which is comparable to eliminating 1,800 cars from the road. Apart from CO2, other environment-polluting gases like 43 tons of smog-producing nitrogen oxide, 98 tons of sulfur dioxide, and 4,500 pounds of particulate matter (PM10) will be prevented from going into the air. These gases sometimes aggravate asthma and even cause acid rain.

Recently, FuelCell Energy reported first-quarter fiscal 2015 adjusted loss of 2 cents per share, which was narrower than the Zacks Consensus Estimate of a loss of 3 cents and the prior-year loss of 4 cents per share.

Fuel cell technology stands out as an alternate source for producing power due to its flexibility to run on various pollution-free options like natural gas, on-site renewable biogas or directed biogas. It produces power without noise and at minimal pollution due to the absence of combustion.

Having said that, the fuel cell technology is still some years away from being extensively used on a commercial platform due to the various hurdles it faces. FuelCell Energy along with its peers like Ballard Power Systems Inc. BLDP and Plug Power Inc. PLUG generally report in red due to heavy investments in R&D activities that need to be undertaken to make fuel cell technology a viable option.

FuelCell Energy currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the alternate energy space, NextEra Energy Partners, LP NEP, sports a Zacks Rank #1 (Strong Buy).