Fuel cells can provide full energy needs to any location with standalone capability, thus eliminating the need for expensive electricity grid expansion in remote locations.Independence from the grid by locating power generation at the point of consumption allows the recovery of any heat generated. This heat can be used to further increase overall system efficiency. This co-generation should allow fuel cells to produce electricity at costs below current grid rates.

Second, the typical 7 to 8 percent losses in power line transmissions are eliminated, and so are the large power line capital costs. Finally, fuel cells offer freedom from concerns about grid reliability and weather related interruptions. Third world countries, with no existing electrical distribution infrastructure, have shown a special interest in residential fuel cell systems. In many of these countries, utility grid transmission and distribution losses approach 50 percent, largely due to theft.