Bloom Energy Corporation (BE): PESTLE Analysis [Nov-2025 Updated]

You're watching Bloom Energy Corporation (BE) navigate a crucial pivot point, where massive government support from the Inflation Reduction Act (IRA) meets the reality of project financing costs. The big picture is strong: the company is defintely projecting 2025 revenue in the range of $1.5 billion to $1.6 billion, but that growth is highly dependent on managing geopolitical supply chain risks and complex state-level permitting. We need to look past the headline growth and map the political tailwinds, the economic cost of capital, and the technological hurdles in solid oxide fuel cell (SOFC) efficiency to truly understand the near-term investment thesis.

Bloom Energy Corporation (BE) - PESTLE Analysis: Political factors

Continued strong US federal tax incentives, particularly the Inflation Reduction Act's (IRA) $3.00/kg clean hydrogen production tax credit

The US federal government's policy support remains the single most important political driver for Bloom Energy Corporation's (BE) growth, particularly for its electrolyzer business. The Inflation Reduction Act (IRA) Section 45V Clean Hydrogen Production Tax Credit (PTC), with final rules released in January 2025, offers a maximum credit of $3.00/kg of clean hydrogen produced. This full credit is available for projects that achieve a lifecycle greenhouse gas (GHG) emission rate of less than 0.45 kg of CO2-equivalent per kilogram of hydrogen. This level of subsidy is designed to make green hydrogen cost-competitive with conventional gray hydrogen, which is a massive market opportunity for Bloom Energy's high-efficiency solid oxide electrolyzers.

Here's the quick math: with the PTC, unsubsidized green hydrogen costs, which were projected to be between $1.91/kg and $2.82/kg by 2025, could effectively drop to below $1/kg, making them immediately viable for industrial customers. But honestly, this estimate hides a major political risk. The potential signing of the 'One Big Beautiful Bill Act' (OBBB) in late 2025 threatens to sharply reduce these incentives and, crucially, move the construction start deadline for 45V credits forward to December 31, 2027, from the original 2033 deadline. That's a defintely tight window for project financing and deployment.

State-level renewable portfolio standards (RPS) and decarbonization mandates driving corporate procurement

Beyond federal policy, state-level Renewable Portfolio Standards (RPS) and Clean Electricity Standards (CES) create a mandatory demand floor for Bloom Energy's fuel cell and microgrid solutions, especially for corporate customers seeking to meet their own decarbonization goals. These state mandates force utilities and retail electric suppliers to procure a minimum percentage of their electricity from eligible clean sources, which often includes Bloom Energy's fuel-agnostic servers.

The market is defined by aggressive 2025 and near-term targets in key states. For example, New Mexico's investor-owned utilities (IOUs) are required to hit a 40% renewable energy target by 2025, while Delaware's Renewable Energy Portfolio Standard mandates 25% by 2025. These targets, plus long-term goals like California's mandate for 100% carbon-free electricity by 2045, translate directly into corporate demand for resilient, non-intermittent power solutions like Bloom Energy Servers.

• New Mexico RPS: 40% of retail sales from renewables by 2025 (IOUs).
• Delaware RPS: 25% of electricity from renewables by 2025.
• Illinois RPS: 50% of electricity from renewables by 2040.

Geopolitical stability risks affecting global supply chains for key materials and Liquefied Natural Gas (LNG) feedstock

Bloom Energy's reliance on both Liquefied Natural Gas (LNG) for its primary fuel cell feedstock and specialized materials for its solid oxide technology exposes it to significant geopolitical supply chain risk in 2025. The global gas balance is fragile. Geopolitical tensions, particularly those affecting chokepoints like the Strait of Hormuz, continue to fuel LNG price volatility, which directly impacts the operating cost of Bloom Energy Servers running on natural gas or LNG.

While the US is expanding its LNG export capacity, the global market remains tight in 2025 before a wave of new US and Qatari capacity comes online later in the decade. This tightness means that any major political disruption, like a halt in Russian piped gas transit via Ukraine (a risk factor in early 2025), could increase European LNG import requirements and further tighten global supply, pushing up feedstock costs for Bloom Energy customers. You need to watch the global LNG price trends very closely this year.

US-China trade tensions impacting component sourcing and international market access

US-China trade tensions are intensifying again in 2025, presenting a clear risk to the clean energy supply chain. While a temporary US-China rare earths deal was announced in November 2025 to stabilize the supply chain through the end of the year, the underlying strategic rivalry is a constant threat. China has escalated its use of export controls on critical minerals, banning exports of gallium, germanium, and antimony to the US 'in principle,' and tightening controls on graphite.

Even though Bloom Energy's Solid Oxide Fuel Cells (SOFCs) primarily use specialized ceramics, they still rely on a complex global supply chain that includes platinum group metals (PGMs) and other critical components whose processing is often concentrated in China or in countries with strong Chinese partnerships, like South Africa. The risk here is two-fold:

• Sourcing Costs: New tariffs or export controls raise component costs and can cause manufacturing delays.
• Market Access: Tensions can limit Bloom Energy's ability to compete in international markets where China holds significant influence over clean energy infrastructure investment.

The trade war is raising clean technology costs and slowing renewable energy adoption globally. It's a real headwind.

Bloom Energy Corporation (BE) - PESTLE Analysis: Economic factors

High interest rate environment increasing the cost of capital for Energy Server project financing.

The persistent high-interest-rate environment in 2025 definitely raises the cost of capital (WACC) for large-scale energy projects, including Bloom Energy Server deployments. Higher rates make Power Purchase Agreements (PPAs) and other financing structures more expensive for customers and for Bloom's own balance sheet. Here's the quick math: a higher discount rate erodes the Net Present Value (NPV) of long-term energy contracts, making the economics tougher.

Still, Bloom Energy has been smart about mitigating this. In October 2025, the company priced an upsized offering of $2.2 billion in zero-interest convertible senior notes due 2030. This is a huge move that sidesteps near-term rate hikes and frees up cash for core operations and capacity expansion. Plus, the company has secured over $125 million in project financing to support customer deployments under PPAs, which helps reduce the upfront capital barrier for end-users, accelerating sales cycles. What this estimate hides, however, is the company's high debt-to-equity ratio, which was over 2x as of January 2025, indicating that while they are managing new debt well, the overall financial structure requires stringent capital management.

Volatility in natural gas and hydrogen feedstock prices directly impacting the cost of electricity generation.

Fuel price volatility is a critical risk, as Bloom Energy Servers are fuel-flexible, primarily running on natural gas today, with a growing pivot to biogas and hydrogen. The U.S. Energy Information Administration (EIA) forecasts show a significant headwind for 2025. The annual average price of natural gas for U.S. electric power plants is forecast to surge by a staggering 37% in 2025 compared to 2024, driven by a projected 58% rise in the Henry Hub wholesale spot price. This direct exposure to the wholesale market immediately pressures the cost of electricity generation (COGS) for Bloom's service and electricity segments.

The move to hydrogen, while strategic for long-term decarbonization, introduces its own cost challenges. For Q3 2025, hydrogen prices in the USA reached $3,642 per metric ton (MT) in September. The cost of green hydrogen is heavily dependent on the price of renewable electricity, which can fluctuate regionally, while the price of grey hydrogen is directly tied to the volatile natural gas market. This is a cost-per-kWh challenge that Bloom must resolve to maintain its competitive advantage in the stationary fuel cell market.

Strong demand from hyperscale data centers driving large-scale, distributed power deals.

The explosion in demand from hyperscale data centers, fueled by the Artificial Intelligence (AI) boom, is the single most powerful economic tailwind for Bloom Energy in 2025. Data centers require massive, resilient, and rapidly deployable power, and Bloom's on-site, distributed generation solution is a perfect fit for this urgency. This trend is translating directly into large-scale deals.

The company is now the preferred on-site power provider for some of the world's largest infrastructure players. One clean one-liner: AI is now Bloom's biggest customer. This robust demand is driving a necessary capacity expansion, as Bloom plans to double its factory capacity from 1 GW to 2 GW by the end of 2026, an investment of around $100 million.

Notable large-scale partnerships and deals in 2025 include:

• A $5 billion initial investment partnership with Brookfield Asset Management, positioning Bloom as the preferred provider for Brookfield's trillion-dollar infrastructure portfolio.
• A major deal to supply fuel cell power to Oracle's AI data centers.
• Agreements with utilities like AEP to power large-scale cloud deployments, such as for Amazon Web Services (AWS).

Bloom Energy's 2025 revenue is projected to be in the range of $1.5 billion to $1.6 billion, showing strong growth.

The company's strong commercial momentum and execution in the data center and industrial sectors are reflected in its financial trajectory. For the full fiscal year 2025, Bloom Energy's revenue is projected to be in the range of $1.5 billion to $1.6 billion, which represents significant year-over-year growth, driven primarily by product sales to these large-scale customers. This growth is also accompanied by improving profitability metrics, showing a clear path to sustained financial health.

Here is a snapshot of key 2025 financial metrics, which underscore the economic shift toward profitability:

The Q3 2025 gross margin of 30.4% is noteworthy because it surpasses the full-year guidance of ~29%, suggesting the economies of scale from larger deployments and manufacturing efficiency improvements are kicking in faster than defintely expected.

Bloom Energy Corporation (BE) - PESTLE Analysis: Social factors

You're operating in an environment where corporate values are driving capital allocation more than ever before. The social factors impacting Bloom Energy Corporation (BE) are overwhelmingly positive tailwinds right now, but they come with a major, often overlooked, challenge: a severe talent crunch. The shift toward distributed, clean power is no longer a niche environmental goal; it's a core business mandate for resilience and ESG compliance.

Increasing corporate commitment to Net Zero and Environmental, Social, and Governance (ESG) goals requiring on-site clean power.

The global push for Net Zero and strong ESG performance is a primary driver for Bloom Energy's growth. It's not just about goodwill anymore; it's about risk management and investor appeal. A Harvard Business Review analysis of 75 global companies found that 53% are holding steady on their sustainability commitments, and a notable 32% are actually expanding them, despite other economic pressures. This translates directly to demand for on-site, low-carbon solutions like Bloom's fuel cells.

Here's the quick math on the market signal: Globally, clean energy and grid investments are projected to reach $2.2 trillion in 2025, which is twice the amount expected to flow into fossil fuels. This capital is chasing companies that can deliver measurable decarbonization. Bloom Energy's strategic partnership with Brookfield Asset Management for AI infrastructure, a deal valued at $5 billion, is a concrete example of this ESG-aligned capital in action.

Growing public and corporate awareness of grid resiliency needs following extreme weather events.

Honestly, the grid is fragile, and everyone knows it now. The social cost of power outages-from hurricanes, wildfires, or even just aging infrastructure-is pushing corporate decision-makers toward microgrids (localized power systems) and on-site generation. For data centers, where downtime is catastrophic, this is particularly acute.

The demand is staggering. The U.S. must add an estimated 1,000-2,000 terawatt hours (TWh) of electricity per decade just to meet the new demand from AI and electrification. Data center leaders are taking responsibility for their own power: approximately 30% of all data center sites are expected to use onsite power as a primary energy source by 2030, more than doubling the percentage from just seven months prior. That's a huge, immediate market for Bloom Energy's AlwaysON microgrid offerings.

Shortage of specialized engineering and technical talent for fuel cell installation and maintenance.

This is the near-term risk that keeps me up at night for the entire clean energy sector. You can sell all the Energy Servers you want, but if you can't install and maintain them quickly, you create a major bottleneck. The broader engineering sector is already facing a significant skills shortage, with a projected need for over 30,000 new engineers by 2029 across key industries.

The problem is specialized: the power industry is struggling to find engineers with the multidisciplinary skills needed for the energy transition. A 2023 study found that 77% of employers had difficulty finding qualified engineering candidates. This talent gap directly impacts Bloom Energy's ability to scale its manufacturing capacity, which it plans to double from 1 GW to 2 GW annually by the end of 2026.

The demand for specialized skills is soaring, and the supply just isn't keeping up.

• Retiring engineers outpace graduates, creating a supply gap.
• New technologies like fuel cells require new, highly specialized training.
• IT and tech industries are drawing talent away with higher pay and perceived prestige.

Perception challenges around hydrogen safety still exist, but are defintely improving with education.

Hydrogen, a key fuel for Bloom Energy's future, still faces a public relations hurdle. The Hindenburg disaster is a ghost that lingers in the collective memory, and recent hydrogen-related incidents in places like South Korea have exacerbated public concerns about flammability and explosiveness.

However, the narrative is shifting through education and concrete data. An EU survey found that while 82% of people considered hydrogen an energy source, only 11% had personal exposure to it. What matters is that when proper safety measures are explained, 60% of respondents were convinced that hydrogen technologies are as safe as traditional energy sources.

The reality is that hydrogen is often safer than common fuels. Here's a comparative look:

What this estimate hides is that while hydrogen has a wider flammability range, it is also significantly lighter than air and dissipates rapidly, which is a major safety advantage in an open environment compared to heavier, pooling fuels like gasoline or propane.

Bloom Energy Corporation (BE) - PESTLE Analysis: Technological factors

Continuous improvements in Solid Oxide Fuel Cell (SOFC) efficiency and power density, reducing system footprint.

You're seeing Bloom Energy Corporation's (BE) core technology, the Solid Oxide Fuel Cell (SOFC), move from a proof-of-concept to a commercially dominant solution, especially in the energy-intensive AI data center market. The continuous R&D focus has yielded significant efficiency gains. For instance, the hydrogen SOFC platform now demonstrates an electrical efficiency of approximately 60% when running on 100% hydrogen. When you factor in the high-temperature combined heat and power (CHP) capability, the total system efficiency can reach up to 90%. That's a huge step up from traditional combustion-based systems, and it directly translates to lower operating costs for customers.

The system footprint reduction, while not quantified in a specific percentage, is implied by the shift to 'hyperscale' deployment. The technology is now treated as a mature, off-the-shelf solution for mission-critical applications, which is validated by major customer commitments. This level of efficiency is defintely a competitive moat.

Significant R&D investment in high-efficiency electrolyzers for green hydrogen production.

Bloom Energy is not just focused on power generation; they are making a massive bet on the hydrogen economy through their Solid Oxide Electrolyzer Cell (SOEC) platform. This is where the company is deploying serious capital. For the twelve months ending September 30, 2025, Bloom Energy's research and development expenses were approximately $0.170 billion, representing an 18.81% increase year-over-year, with the third quarter alone seeing $48.7 million in R&D spend. A significant portion of this is going into advancing their electrolyzer technology.

Their SOEC is currently the most efficient commercially available electrolyzer. It operates at high temperatures, which reduces the electricity required to split water molecules. The result is a system-level efficiency of 37.5 kWh per kilogram of hydrogen produced. This is a game-changer, as it's up to 25-30% higher efficiency compared to conventional PEM or alkaline electrolyzers, which typically consume 52-54 kWh per kilogram. The company is also turbocharging this effort with proceeds from the upsized $2.2 billion convertible senior notes offering in October 2025, specifically targeting next-generation SOFCs and green hydrogen pilot projects.

Integration challenges with existing grid infrastructure for microgrid and distributed generation deployment.

The real story here is not a technical integration challenge, but a strategic opportunity driven by the existing grid's limitations. The massive energy demand from new AI data centers is straining local utility infrastructure, leading to deployment delays for many companies. Bloom Energy's distributed generation model is positioned as the solution to this grid stress.

The SOFC Energy Servers are designed to be installed on-site, operating independently or in parallel with the main grid (a microgrid). This bypasses the need for costly and time-consuming utility upgrades. The technology's fuel flexibility and high reliability-with the fleet's average availability in 2023 at 99.995%-make it a preferred choice for mission-critical loads like data centers and hospitals. The challenge is less about the technology's ability to integrate and more about the utility sector's pace of adoption and regulatory frameworks catching up to decentralized power.

Modular design allowing for faster deployment and scalability for various customer needs.

The modularity of the Energy Server is a core business advantage, especially with the current demand surge. The systems are essentially scalable building blocks, which is what allows for rapid deployment and quick capacity expansion. This is why Bloom Energy was able to secure a landmark $5.0 billion AI infrastructure partnership with Brookfield Asset Management in October 2025.

This design allows for speed-to-market, which is critical for customers. Here's the quick math on speed and scale:

• Rapid Deployment: Demonstrated a rapid deployment capability of just 90 days for a major customer like Oracle.
• Scalability: The company is investing $100 million to double its manufacturing capacity from 1 GW to 2 GW by the end of 2026 to meet the data center demand.
• Large-Scale Orders: Secured a supply agreement for up to 1 GW of fuel cells with American Electric Power (AEP).

The ability to quickly scale from a few hundred kilowatts to multi-megawatt projects, like the 80 MW ecopark project in South Korea, is what makes the technology so attractive to large-scale infrastructure partners.

Bloom Energy Corporation (BE) - PESTLE Analysis: Legal factors

Complex and lengthy permitting processes for distributed power generation projects across different US states.

The biggest legal headwind for Bloom Energy Corporation is the fragmented and often slow permitting process for distributed power generation, especially as demand for on-site power surges due to AI data centers. While the company's technology offers speed-to-power, local and state-level regulations can still create significant delays. You see this most clearly in the time it takes for new grid connections: in key markets like the Austin/San Antonio metro area, developers face a potential 2-year gap between expecting grid power and when utilities can actually deliver it.

This regulatory friction forces customers toward on-site solutions, but then they run straight into local air permitting requirements, which are becoming more scrutinized as the adoption of on-site generation accelerates. Bloom Energy's solid oxide fuel cells (SOFCs) have a lower emissions profile than traditional combustion-based generators, but they still require navigating a patchwork of state and local air quality boards. This isn't a single federal hurdle; it's a state-by-state slog. The good news is Bloom Energy's fleet availability was 99.995% in 2023, which helps with the operational compliance side once a permit is secured.

Evolving regulatory standards for hydrogen transportation, storage, and blending in pipelines.

Bloom Energy's electrolyzer technology, a core part of its future growth, is directly exposed to the highly fluid legal landscape of hydrogen. The entire framework is fragmented, with the U.S. Department of Transportation (DOT) Pipeline & Hazardous Materials Safety Administration (PHMSA) regulating the safety of the approximately 1,600 miles of hydrogen pipelines in the country.

The real action in 2025 is in the tax code. The U.S. Department of the Treasury released final rules for the Clean Hydrogen Production Tax Credit (45V) in January 2025, which is a massive incentive but comes with strict legal requirements. To qualify for the top credit tier, hydrogen production must have lifecycle Greenhouse Gas (GHG) emissions no greater than 4 kilograms of CO2e per kilogram of hydrogen produced. This strict emissions accounting is a legal compliance challenge, but it also creates a competitive moat for high-efficiency producers like Bloom Energy.

Also, the company is actively pushing back on unfavorable interpretations of other rules. In August 2024, Bloom Energy submitted comments to the Treasury and IRS, arguing against the proposed classification of most fuel cells as 'Combustion and Gasification' facilities under the Clean Electricity Investment Credit (48E). This classification would force them into a more complex, less favorable emissions accounting pathway, potentially hindering access to this key tax credit. This is a critical legal battle for its stationary power business.

Intellectual property (IP) litigation risks in the highly competitive fuel cell and electrolyzer technology space.

In a technology-driven sector like fuel cells and electrolyzers, intellectual property (IP) is the lifeblood, and litigation is a constant risk. The competition is defintely fierce. Bloom Energy has a history of robustly defending its IP, as seen in past litigation against competitors regarding its solid oxide fuel cell technology. The new regulatory environment, particularly the massive financial incentives from the Section 45V tax credit, has made IP a 'vital battleground' for all players.

Bloom Energy is continuously building its patent portfolio. For example, in May 2025, an application was published for an 'Electrolyzer Power Control with Harmonic Absorption' system, and in August 2025, another was published for a fuel cell system for decentralized data centers. This aggressive patenting strategy is a necessary legal defense, but it also increases the risk of being drawn into infringement lawsuits by competitors seeking to challenge its market position.

You also have to consider the ongoing fallout from past corporate legal issues. In May 2024, a federal court finalized a $3 million settlement for an investor class action suit over the company's 2018 Initial Public Offering documents. While not a technology IP issue, it highlights the cost of securities litigation.

Compliance with new US Department of Energy (DOE) and state energy efficiency regulations.

The regulatory environment for energy efficiency is a double-edged sword right now. On one hand, Bloom Energy's core product-the solid oxide platform-is inherently high-efficiency, with the fleet's average availability at 99.995% in 2023. This performance is a major selling point for compliance-conscious customers.

On the other hand, the DOE is currently in a major deregulatory phase. In May 2025, the DOE announced the first step in a large deregulatory effort, proposing to eliminate or reduce 47 regulations. These actions are expected to save Americans an estimated $11 billion and cut over 125,000 words from the Code of Federal Regulations. While this might simplify the operating environment, the rescission of programs like the Renewable Energy Production Incentives program at the end of fiscal year 2026 could remove certain federal financial tailwinds that some customers rely on.

For Bloom Energy, the key compliance focus in 2025 is internal safety and quality, which directly supports external regulatory compliance. They finalized a comprehensive Safety Audit Checklist in 2024 for implementation in 2025 to proactively identify potential safety-related issues in manufacturing and customer installation settings. That's a smart move to keep ahead of any new state-level operational safety standards.

Bloom Energy Corporation (BE) - PESTLE Analysis: Environmental factors

Significant reduction in criteria air pollutants (NOx, SOx) compared to traditional combustion-based power generation.

Bloom Energy Corporation's core environmental advantage lies in its non-combustion Solid Oxide Fuel Cell (SOFC) technology, which drastically cuts down on smog-forming criteria air pollutants. For financial analysts, this is a clear de-risking factor against tightening environmental regulations, especially in non-attainment areas in the US. The electrochemical process used by the Energy Servers results in near-zero emissions of nitrogen oxides (NOx) and sulfur oxides (SOx), which are major components of smog and acid rain.

The cumulative impact of this technology is substantial. Through the end of 2024, Bloom Energy's deployed systems have collectively achieved avoided emissions of 20.6 million pounds of nitrogen oxides (NOx) and 7.7 million pounds of sulfur oxides (SOx). Compared to the average US grid, the company's systems can deliver up to a 99% reduction in these harmful air pollutants, a significant public health benefit that translates into avoided costs for local healthcare systems.

Focus on sourcing certified 'green' or 'blue' hydrogen to meet strict low-carbon fuel standards.

The company is strategically positioned at both ends of the hydrogen value chain, both consuming and producing low-carbon hydrogen. In July 2025, Bloom Energy officially launched its dedicated Hydrogen Energy Servers, moving hydrogen from a pilot feature to a commercial offering. This is a defintely necessary step to meet the growing demand for certified low-carbon fuels.

The key opportunity is the electrical efficiency of the Solid Oxide Electrolyzer Cell (SOEC) technology, which is critical for making green hydrogen cost-competitive. The Bloom Electrolyzer is currently the most efficient commercially available electrolyzer, producing hydrogen at 37.5 kWh per kilogram (kg). This is significantly better than the 52-56 kWh/kg required by conventional Proton Exchange Membrane (PEM) and Alkaline electrolyzers, directly lowering the cost of green hydrogen production.

This efficiency is driving major projects, including the Nujio'qonik project in Canada, which is set to produce green hydrogen using Bloom's SOEC technology by 2025.

Challenges in establishing a sustainable, closed-loop recycling program for Solid Oxide Fuel Cell components.

The long-term environmental viability of SOFC technology is tied to its end-of-life management, specifically the recovery of materials from the ceramic fuel cell stacks. While the company is scaling up production, with plans to double capacity to 2 GW by the end of 2026, the sheer volume of future end-of-life units will require a robust, closed-loop system.

The good news is that Bloom Energy has an established product recycling metric. The company reported a 98% recycling rate for its products in its 2024 Impact Report. This is a strong overall number, but what this estimate hides is the complexity of recovering the specific, high-value ceramic and precious metal materials within the SOFC stack itself. The company has identified product end-of-life recycling as a key focus area under its Pollution Prevention and Control strategy for 2025 initiatives.

• Maintain a high overall product recycling rate (98%).
• Prioritize developing a material recovery process for SOFC stack components.
• Ensure the recycling infrastructure scales with the planned 2 GW production capacity expansion.

Water usage concerns for certain types of hydrogen production and cooling in arid regions.

For their primary power generation, Bloom Energy Servers are a massive net positive for water conservation. Since the SOFC process is non-combustion and air-cooled, it eliminates the need for cooling towers, consuming about one-thousandth of the water of conventional thermoelectric power plants. The average consumption is only 1.01 gallons/MWh, compared to an average of 830 gallons/MWh for traditional power generation.

For customers, this translates to huge savings. For example, a 1.75-megawatt fuel cell installation announced in August 2025 for Lawrence and Memorial Hospital is projected to reduce the hospital's water consumption by 273 million gallons annually.

The water challenge shifts to the hydrogen production side. The Solid Oxide Electrolyzer Cell (SOEC) process requires water to split into hydrogen and oxygen. The theoretical minimum is 9 liters of water per 1 kg of hydrogen produced, plus additional water for purification and process cooling. To be fair, Bloom's SOEC is inherently more water-efficient than competitors because it is air-cooled, unlike water-intensive PEM and Alkaline electrolyzers. Still, for projects in arid regions, the strategic action is to utilize non-freshwater sources, such as treated wastewater or desalinated seawater, a solution that adds a minor cost (around $0.007/kg of hydrogen in some European models) but removes the local water-stress risk.