Electrolyzers Market Size, Share, Growth, Analysis

Electrolyzer manufacturing capacity continues to expand rapidly worldwide, emerging as a critical driver of scale-up in the global green hydrogen economy. This expansion marks a transition from early-stage demonstration-scale deployment to industrial-level commercialization, reflecting increasing policy support, growing corporate commitment to decarbonization, and strategic investments from governments and private industry. The acceleration of manufacturing capability is reshaping cost trajectories, improving project confidence, and enabling competitive pathways for green hydrogen production across multiple sectors. According to the International Energy Agency (IEA), global electrolyzer manufacturing capacity increased further in 2024 to reach nearly 38 GW per year, based on nominal factory capacities announced by companies. This signifies a 40% increase in manufacturing capacity by the end of 2023, with China being the main contributor to this growth. The scale of capacity expansion indicates a significant shift from custom, engineering-focused project development to high-volume manufacturing, akin to the early days of photovoltaic solar gigafactories and offshore wind industrialization.

Proton exchange membrane (PEM) electrolysis depends heavily on critical and scarce materials, such as platinum, titanium, and iridium, which are essential for maintaining performance under highly oxidative conditions (greater than 1.4 V) on the anode side. Due to the limited number of materials capable of withstanding such harsh environments, iridium—a rare and costly element—has become the preferred choice for PEM electrolyzers. Similarly, porous transport layers (PTL) require significant amounts of titanium-based materials coated with platinum, further adding to system costs. The reliance on these platinum group metals (PGMs) not only elevates production expenses but also constrains scalability due to their scarcity and geographically concentrated supply. Both platinum and iridium are among the most resource-intensive and emission-heavy metals to produce. As global demand for these materials grows across multiple industries, including fuel cells and industrial catalysts, the electrolyzers market faces price volatility and supply chain vulnerabilities. To mitigate these risks, researchers and manufacturers are actively developing alternative, earth-abundant catalyst materials that can reduce dependency on PGMs. This transition is vital to enhancing the economic viability, sustainability, and long-term competitiveness of electrolyzer technologies within the renewable energy landscape

The growing integration of renewable energy sources such as solar, wind, and hydropower with electrolyzer systems represents a transformative opportunity for the global electrolyzers market. High-purity hydrogen can be efficiently produced through the electrolysis of water (H2O), and the cost of electricity largely determines its production cost. As the share of renewables continues to rise, using these clean energy sources to power electrolysis becomes vital to reducing the levelized cost of hydrogen (LCOH) while supporting a sustainable energy transition. Electrolysis powered by renewable energy not only enables large-scale, carbon-free hydrogen generation but also provides a flexible solution for managing the intermittency of renewable power. Surplus electricity from renewables can be stored as hydrogen and later reconverted to electricity through re-electrification processes—using fuel cells, turbines, or internal combustion engines—to stabilize the grid and balance power supply and demand (power-to-power operations). This capability enhances energy system resilience and supports efficient renewable energy utilization. Moreover, hydrogen serves as a critical energy carrier that enables decarbonization across multiple sectors. In the industrial domain, hydrogen is already a key raw material in processes such as refining, chemical production, and steelmaking. Transitioning to low-carbon hydrogen in these applications can significantly reduce emissions, fostering cleaner production pathways. Together, these synergies between renewable energy and electrolysis are creating strong market opportunities for green hydrogen deployment, grid balancing, and industrial decarbonization on a global scale.

THigh electrolyzer capital costs and slow project deployment continue to impede the scale-up of hydrogen production, constraining opportunities to reduce equipment costs. Despite expectations of meaningful cost declines driven by technological advances, manufacturing innovation, and economies of scale, such reductions have largely been limited to China. Outside China, slow deployment has prevented scaling efficiencies, while global inflation in 2022–2023 reversed prior downward cost trends, contributing to elevated project expenses. The IEA’s 2024 assessment indicates that electrolyzer installation costs remain high—typically USD 2,000–2,600/kW in most international markets, compared with USD 600–1,200/kW in China. When deployed globally, additional EPC, logistics, customization, and contingency expenditures can raise total installed costs to USD 1,500–2,450/kW. These cost pressures are compounded by financing uncertainty, with only about 30% of announced projects progressing to Final Investment Decision (FID), reflecting capital risk, policy dependencies, and weak project pipelines. Collectively, high costs, limited economies of scale, and slow market uptake are delaying the expansion of electrolyzer manufacturing capacity. Although long-term demand remains favorable due to decarbonization and energy security priorities, the current landscape is likely to accelerate industry consolidation, favoring companies with strong financial resources and advanced technological capabilities.