The Department of Energy (DOE) is the largest funder of fuel cell technology in the U.S. The Department of Energy-Office of Fossil Energy (FE) is developing high temperature fuel cells for distributed generation. It has funded the development of tubular solid oxide fuel cell (SOFC) and molten carbonate fuel cell (MCFC) power systems operating at up to 60% efficiency on natural gas. The remarkable environmental performance of these fuel cells makes them likely candidates to help mitigate pollution. DOE is now pursuing more widely applicable solid oxide fuel cells for 2010 and beyond. DOE estimates that a 5 kW solid oxide fuel cell system can reach $400 per kW at reasonable manufacturing volumes. SECA-the Solid State Energy Conversion Alliance-was formed by the National Energy Technology Laboratory (NETL) and the Pacific Northwest National Laboratory (PNNL) to accelerate the commercial readiness of planar and other solid oxide fuel cell systems utilizing 3-10 kW size modules by taking advantage of the projected economies of production from a "mass customization" approach. In addition, if the modular 3-10 kW size units can be "ganged" or "scaled-up" to larger sizes with no increase in cost, then commercial, microgrid, and other distributed generation markets will become attainable. Further scale-up and hybridization of SECA SOFCs with gas turbines could result in penetration of the bulk power market. This paper reviews the current status of the solid oxide and molten carbonate fuel cells in the U.S. (C) 2004 Published by Elsevier B.V.