Hydrogen energy has recently captured global attention as an essential component of various countries' clean energy policies and carbon reduction strategies. In particular, the UK’s Labour Government confirmed around £2 billion of funding for 11 new green hydrogen projects across England, Scotland, and Wales, as announced by Chancellor Rachel Reeves during the Budget speech to the House of Commons on October 30th. These projects are set to be among the world's first commercial-scale green hydrogen facilities, with £3.9 billion ($5 billion) allocated for green hydrogen producers and carbon capture, utilization, and storage (CCUS) projects in 2025-26.
Hyundai also announced a new concept for a hydrogen fuel cell electric vehicle (FCEV). The South Korean automaker has equipped the vehicle with aerodynamic wheels designed to reduce drag from low rolling resistance tires, aiming for a target range of over 650 kilometers per refuel. The electric motor delivers up to 150 kW of power, and mass production is scheduled for the first half of 2025.
In recent years, hydrogen energy has gained significant attention in the global energy sector. In 2024, the industry continues to advance rapidly, driven by both policy support and growing market demand. Governments worldwide have introduced comprehensive plans and subsidies for hydrogen energy development. For instance, the European Union has announced €6.9 billion in subsidies, which is expected to attract over €5.4 billion in private investments to boost the global hydrogen supply chain. In China, hydrogen was mentioned for the first time in the Government Work Report and incorporated into various decarbonization initiatives outlined in the “Energy Conservation and Carbon Reduction Action Plan,” with significant efforts to promote a complete hydrogen value chain, from production and storage to distribution and utilization.
The application prospects for hydrogen energy are vast, particularly in transportation, industry, and energy storage. The International Energy Agency (IEA) noted in its “Global Hydrogen Review 2024” that the number of hydrogen projects and investment decisions continues to increase, reflecting a positive growth trend in the industry.
We recently interviewed Wei Gu, Investment Analysis Director at Honyu Group, to discuss the impact of hydrogen energy on the solar market.
Interviewer (Q): Mr. Wei Gu, thank you so much for joining us. Hydrogen energy has received significant attention in recent years, especially with the UK’s announcement to fund 11 new green hydrogen projects. How do you view the hydrogen energy industry and its applications?
Wei Gu (A): Thank you, this is indeed a crucial topic. Hydrogen energy is developing rapidly, encompassing a complete industry chain from hydrogen production and storage to practical applications. In the upstream hydrogen production sector, we see various technological routes such as grey hydrogen, blue hydrogen, and green hydrogen. Grey hydrogen is produced from fossil fuels and has high carbon emissions. Blue hydrogen incorporates carbon capture and storage (CCS) technologies during production but still relies on fossil fuels. The most environmentally friendly option, green hydrogen, is produced through water electrolysis using renewable energy, with zero carbon emissions. This is the main focus of global policies and investments.
Storage and transportation are equally important. Hydrogen can be stored and transported in several forms, including compressed gas, low-temperature liquid hydrogen, and solid-state storage using chemical materials. The maturity of these technologies directly impacts the scalability and cost reduction of hydrogen energy. Currently, there is active research in the industry to improve the safety and cost-effectiveness of hydrogen storage and transportation.
In terms of downstream applications, hydrogen energy has extensive potential. Hydrogen fuel cells, for example, have enormous promise in transportation, especially for heavy-duty trucks, buses, and long-haul freight, which require long range and high energy density. Additionally, hydrogen can be used for power generation and energy storage, serving as an alternative fuel for decarbonizing high-energy-consuming industries like steel and chemical production. It's worth highlighting that hydrogen can achieve deep decarbonization in these carbon-intensive sectors, filling gaps that other energy forms cannot currently address.
Q: It seems that the market potential for hydrogen energy is vast. How does it compare to solar energy in terms of advantages, and what are the differences in their industry applications?
A: Indeed, both are playing pivotal roles in the clean energy revolution, but they have different strengths and application areas. Solar photovoltaic (PV) technology converts sunlight directly into electricity and is a relatively mature market. PV systems have shown high cost-effectiveness and reliability, particularly in sun-rich regions. At Honyu Group, our N-TOPCon technology achieves conversion efficiencies exceeding 24%, and the cost of solar power generation continues to decrease, making it one of the most cost-competitive renewable energy sources.
In contrast, hydrogen’s core strengths lie in its high energy density and diverse application scenarios. Electricity is efficient but difficult to store for long periods or at a large scale, especially when supply and demand are misaligned. Hydrogen can effectively bridge this gap by converting excess electricity into storable hydrogen through electrolysis, which can then be used for long-term energy storage. This is particularly advantageous for stabilizing energy supply and meeting high-load industrial demands. Additionally, hydrogen offers benefits in heavy industry decarbonization, chemical feedstock replacement, and heavy-duty transportation—areas where electricity falls short.
Hydrogen and solar energy have a complementary relationship. Solar energy can generate clean electricity when sunlight is abundant, while hydrogen technology can efficiently convert and store excess electricity as hydrogen, redistributing energy across time and space. This complementarity not only increases renewable energy utilization but also enhances the stability of the overall energy system.
Q: Given the rapid development of hydrogen energy, what impact do you think it will have on the solar market and solar companies?
A: The rise of hydrogen energy actually presents new opportunities for the solar industry rather than threats. Solar companies can expand market demand by providing clean electricity for water electrolysis to produce green hydrogen. The renewable energy needed for green hydrogen, particularly solar power, will drive further expansion and investment in solar projects. Consequently, solar companies can continue to focus on their traditional electricity market while also supplying critical infrastructure for the hydrogen sector.
At Honyu Group, we are keenly aware of this trend and are exploring ways to better integrate into green hydrogen production. We are researching how to combine large-scale solar power plants with hydrogen production facilities for more efficient energy conversion and utilization. Additionally, solar companies can engage in strategic investments and partnerships in the hydrogen sector, developing new business models, such as offering integrated energy solutions tailored to industrial clients.
In the short term, the growth of hydrogen energy will boost demand for solar-generated electricity, enhancing the economic returns of solar projects. In the long term, solar companies may need to innovate further to meet the hydrogen industry's requirements for power quality and stability. Technological advancements, such as increasing the flexibility of solar power generation to accommodate the dynamic loads of hydrogen production, will become essential.
Q: What potential impacts might the future development of hydrogen energy have on the solar industry chain?
A: In the long run, hydrogen energy will accelerate the transformation of the global energy structure and bring more opportunities to the solar industry chain. The integration of solar power and hydrogen technology will become a trend, creating more possibilities for clean energy supply. Solar companies can expand their market by collaborating with hydrogen projects, further achieving business diversification. Additionally, participating in the hydrogen energy industry chain will push solar companies to invest more in technological innovation and integrated energy solutions.
On the other hand, hydrogen energy may prompt solar companies to adjust their strategic focus. Companies will need to look beyond the traditional solar power market and consider emerging sectors like hydrogen energy. The synergy between these industries will drive technological innovation and optimization, paving the way for more sustainable development in the solar sector.
In summary, the rapid growth of hydrogen energy presents both challenges and opportunities for the solar market. Together, they will contribute to building a cleaner, lower-carbon, and more efficient global energy system.
