The U.S. power grid is under significant stress, and manufacturers are coming to two increasingly uncomfortable realizations: The grid may not be there when they need it, and if it is, the cost of electricity is becoming difficult to predict or control.
These concerns are particularly acute in PJM’s 13-state region. The transmission organization’s last two capacity auctions revealed a growing supply shortfall. The gap between available capacity and reserve margin targets ballooned from roughly 210 MW in the 2026/2027 auction to over 6,500 MW in the 2027/2028 auction. Meanwhile, wholesale capacity prices in the region have skyrocketed, rising sevenfold in 2024 before climbing another 22% in 2025.
For manufacturers accustomed to sourcing their energy from a single utility, the numbers tell a stark story: What was once a predictable operating expense is now an increasingly unpredictable strategic risk.
“It's become crystal clear to manufacturers that if you don't have power, there is nothing else to talk about,” said Dan Degan, Enterprise Sales at Bloom Energy. “You're not going to open a new factory and you're not going to add new jobs.”
The difficult truth is that the grid wasn’t built for the digital era. Unprecedented electricity demand from AI infrastructure, EVs and reshoring is overwhelming the system, and relief isn’t coming anytime soon. The grid infrastructure required to meet today’s demand alone will take years to build — and by the time it gets built, demand will have increased even further.
Manufacturers can no longer afford to wait. They need resilient, efficient, clean and cost-predictable power that they can count on today and that will scale with their business tomorrow.
Onsite power offers a way forward.
The energy cost crisis
Utility costs are a significant expenditure for manufacturers, so even a slight increase in electricity rates can have a meaningful impact on the bottom line. For the 2026-2027 billing year, rates in PJM’s territory are expected to increase by 1.5% to 5%, which could translate into millions of dollars of additional costs for industrial operations across the region.
Many manufacturers will be forced to choose between absorbing the higher operating expenses — which can stifle innovation or slow expansion — or passing them on to customers. Either way, they risk being left behind by competitors who have locked in stable energy costs.
The uncertainty has elevated energy procurement to the C-suite level. “It’s top-down now,” Degan explained. “CEOs and CFOs are driving their teams to go find solutions, now.”
The value of onsite power
To remain competitive, manufacturers must diversify their energy resources. “You don’t single-source your raw materials or any other mission-critical aspect of your operations,” Degan explained. That same logic must now apply to power procurement.
Onsite power, also known as distributed generation, is the most direct way to diversify energy resources. It refers to electrical power produced at or near the location where it is consumed. Once viewed solely as backup protection during grid outages, onsite power is increasingly being deployed as a primary power source because it delivers reliable, timely and affordable access to power.
The financial benefits are straightforward. By generating power locally, manufacturers insulate themselves from volatile grid costs driven by market fluctuations and infrastructure constraints. They can also avoid peak demand charges, which can account for up to 70% of industrial electricity bills.
Fuel cells are a leading onsite power solution
Fuel cells stand out among onsite generation technologies for their predictable energy costs. "We can tell you what a kilowatt-hour that comes out of a Bloom server is going to cost in six years, 12 years and 15 years," Degan said. Combined with high efficiency rates, low maintenance requirements and exceptional uptime rates, this makes fuel cells highly cost-effective.
Unlike diesel generators or gas turbines, fuel cells don’t burn fuel. Instead, they use fuel, such as natural gas, to generate electricity through an electrochemical process, making them cleaner and significantly more efficient than conventional generation—typically 35% to 45% more efficient. As a result, each kilowatt-hour produced requires less fuel, increasing energy efficiency and reducing exposure to fuel-price swings. That directly lowers a manufacturer’s annual operating costs.
This efficiency translates into operational resilience. Clean fuel cells provide reliable 24/7 baseload power onsite by connecting directly to the underground gas network, which has a strong track record of consistent service. This protects operations from grid outages and instability without requiring a costly separate backup system.
Additionally, the technology’s inherent redundancy means modules can be hot-swapped without shutting down the system, unlike other technologies, minimizing interruptions and protecting sensitive equipment.
A proven path forward
The grid crisis in PJM isn't theoretical—it's happening now, and manufacturers need solutions that can be deployed quickly and scaled with confidence. Bloom Energy's Solid Oxide Fuel Cell Energy Server® power systems deliver exactly that, typically coming online within 90 to 120 days in fully islanded scenarios. With over 1.8 GW of installed capacity, Bloom's modular architecture has a proven track record of rapid, scalable deployment across industrial operations.
Bloom’s systems can be deployed behind or in front of the meter in various configurations and contracting models, giving manufacturers the flexibility to structure solutions that align with their operational and financial goals. The question isn't whether to act—it's how quickly you can secure the cost-predictable, resilient power your operations demand.
Download the PJM report and contact Bloom Energy to learn how fuel cell technology can protect your competitive position in an increasingly unstable energy environment.
