While Next Hydrogen will retain control of its intellectual property and system design, Sungrow – a major Chinese electrolyser manufacturer with 3GW of capacity – will handle large-scale production, including the balance of plant components like pumps and piping.
Beginning next year, Sungrow will manufacture Next Hydrogen electrolysers, including the balance of plant systems, such as pumps and piping, for large-scale orders.
They are also exploring North American manufacturing to potentially meet ‘locally made’ rules, which could unlock tax incentives under the Inflation Reduction Act (IRA).
This approach implies a move to future-proof the company against potential restrictions on foreign-made equipment in clean energy projects.
The companies will also collaborate on co-developing and marketing a broader range of hydrogen solutions for sectors such as transport, refining, steel, and ammonia.
“By leveraging Sungrow Hydrogen as an OEM partner, we can accelerate our path to market and efficiently scale production to meet the demand for large-scale green hydrogen projects,” claimed Raveel Afzaal, President and CEO of Next Hydrogen.
Peng Chaocai, Vice-President of Sungrow and Chairman of Sungrow Hydrogen, said the partnership will drive down costs, delivering electrolysers at the “best price.”
The partnership between Sungrow and Next Hydrogen reflects a trend of Western clean tech companies turning to China for scalable and cost-effective manufacturing.
In response, the most recent European Hydrogen Bank implemented electrolyser requirements with bidders required to prove that no more than 25% of electrolyser stacks can be sourced from China.
However, Splitwaters CEO Deepak Bawa told H2 View earlier this year that Chinese electrolysers alone won’t move the needle on costs since equipment typically makes up just 30–40% of a project’s total spend.
Chinese electrolysers to capture ‘one-third’ of global orders in 2025: Wood Mackenzie
Chinese electrolyser manufacturers will capture at least one-third of orders outside Europe and North America, according to Wood Mackenzie’s view on 2025 report.
Analysis carried out in Wood’s Hydrogen: 5 things to look for in 2025, revealed that this is based on the increasing demand for green hydrogen and the competitive edge that Chinese electrolysers offer in terms of cost, manufacturing capacity, and shorter delivery times.
“[China’s] successful track record in markets like the Middle East, Southeast Asia, North Africa and Australia, coupled with their cost advantage, makes Chinese electrolysers an appealing option for projects in these regions,” the report wrote.
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