FuelCell Energy Reports Third Quarter 2008 Results and Latest Accomplishments

* Product sales and revenues tripled over the prior year quarter

* Product cost-to-revenue ratio of 1.68 vs. 1.91 a year ago

* Product backlog doubled from the prior year quarter

* Increased production rate to 30 MW annually
DANBURY, Conn., Aug. 27, 2008 (GLOBE NEWSWIRE) -- FuelCell Energy, Inc.
(Nasdaq:FCEL), a leading manufacturer of high efficiency ultra-clean power
plants using renewable biogas and other fuels for commercial, industrial and
utility customers, today reported results and accomplishments for its third
fiscal quarter and nine months ended July 31, 2008.

Financial Results

FuelCell Energy reported a 106 percent increase in revenues for the third
quarter of fiscal 2008 of $27.9 million, compared to $13.5 million in the same
period a year ago. Product sales and revenues tripled to $23.2 million compared
to $7.8 million in the third quarter of 2007. Demand for FuelCell Energy's power
plants continues to expand driven by the worldwide movement to reduce greenhouse
gas emissions and to increase the efficient use of fuels. During the third
quarter of 2008, FuelCell Energy increased its manufacturing run rate to 30
megawatts (MW) annually in order to fulfill backlog. Research and development
contract revenue was $4.7 million compared to $5.7 million in 2007.

Product costs declined resulting in a product cost-to-revenue ratio of 1.68 in
the third quarter of 2008 compared with 1.91 in the same period a year ago.
Increased sales of megawatt-class power plants and reduction of unit costs
across all product lines led to improved product margin. MW-class plants cost
less to produce on a per kilowatt basis than the Company's sub-MW power plants.
During the quarter, the cost ratio was impacted by a manufacturing defect in
fuel cell stack production resulting in a $2.0 million charge to cost of sales.

The Company's product backlog, including long-term service agreements, as of
July 31, 2008 was $100.7 million, 103 percent above the $49.6 million reported
as of July 31, 2007. The increase was primarily due to orders from the Company's
South Korean partner POSCO Power. The research and development contract backlog
totaled $5.5 million compared to $22.1 million as of July 31, 2007.

In the third quarter of fiscal 2008, net loss to common shareholders was $26.8
million or $0.39 per basic and diluted loss per share compared to a net loss to
common shareholders of $16.2 million or $0.24 per basic and diluted share in the
same period of the previous year. Research and development expenses decreased by
17.8 percent to $5.7 million. Interest and other income of $0.9 million was
lower by approximately $2.3 million due to lower average invested balances,
lower interest rates, and lower research and development tax credits earned
compared to the prior year. Losses expanded as higher volumes of product sales
and revenues resulted in increased operating losses, albeit at a lower rate than
in the prior year as product margins improved.

Total cash and investments were $104.4 million as of July 31, 2008. Net use of
cash and investments for the third quarter was $17.4 million, which included
capital spending of approximately $2.6 million. Depreciation expense for the
quarter ended July 31, 2008 was approximately $2.2 million.

For the nine months ended July 31, 2008, FuelCell Energy reported revenue of
$74.6 million, compared with $31.8 million in the same period a year ago.
Product sales and revenues were $59.4 million, an increase of 176 percent over
the $21.6 million in 2007. The product cost-to-revenue ratio was 1.65, compared
with 2.07 for the nine-month period a year ago, reflecting lower per unit
production costs and the change in product mix to MW-class power plants.
Research and development contract revenue was $15.1 million, compared to $10.2
million in the comparable 2007 period.

For the nine months ended July 31, 2008, FuelCell Energy reported a net loss to
common shareholders of $72.3 million or $1.06 per basic and diluted share
compared to a loss of $55.1 million or $0.92 per basic and diluted share in the
same period a year ago. Losses expanded as higher volumes of product sales and
revenues resulted in increased operating losses.

Key Corporate Developments

"Our strong backlog demonstrates the growing demand for high efficiency,
ultra-clean power generation," R. Daniel Brdar, FuelCell Energy's Chairman and
CEO said. "We have increased our production rate to 30 MW annually to respond to
this demand while we continue to reduce product costs."

Leadership in Key Markets

South Korea: On August 15th, the President of South Korea announced his plan to
increase the country's energy self-sufficiency to 50 percent from 5 percent
through the promotion of low-carbon green energy technologies such as fuel
cells. The country has put in place incentive programs for utilities and
independent power producers to adopt clean energy technology that meets its
low-carbon, high fuel efficiency goals.

POSCO Power, FuelCell Energy's distribution and manufacturing partner in South
Korea, has ordered over 38 MW of mostly MW-class fuel cells since partnering
with FuelCell Energy in 2007. In addition, POSCO Power's fuel cell balance of
plant manufacturing facility in Pohang City is scheduled to open in September
with a capacity of 50 MW, with plans to increase capacity to 100 MW by 2010.
FuelCell Energy is currently delivering complete power plants to POSCO Power and
will transition to fuel cell modules in the second half of 2009. POSCO Power
will integrate the modules with the electrical and mechanical subsystems (the
balance of plant) they build in their facilities.

California: California is a world leader in adopting alternative energy
projects. As California manages its electrical supply, its focus is moving to
the value of electrical efficiency and 24/7 operation to better balance the
utility grid to actual electricity use. Because fuel cells run all of the time,
they provide ultra-clean baseload power when wind, solar and other alternative
energy technologies may not be available.

Earlier this year, California modified its Self-Generation Incentive Program
that provides end users with incentives to purchase clean power generation
including fuel cells. The incentive program cap was increased to 3 MW from 1 MW
and the funded amount was doubled to $179 million allowing FuelCell Energy to
broaden its target market to include more of its MW-class products.

Connecticut: Connecticut's Renewable Portfolio Standard requires utilities to
purchase approximately 800 MW of Class 1 clean energy by 2020. To begin the
process, the state passed legislation requiring utilities to contract for the
first 150 MW and the Connecticut Department of Public Utility Control (DPUC)
approved 16.2 MW of projects incorporating FuelCell Energy's 2.4 MW DFC3000
power plants. These projects have system efficiencies of approximately 60
percent, saving energy costs and reducing CO2 emissions. Upon the passage of the
Investment Tax Credit (ITC) extension now pending before Congress, the Company
anticipates final contracts.

Round 3 of Connecticut's Project 150 calls for utilities to sign the next 25 MW
of clean energy contracts. Project developers have submitted a number of
proposals using FuelCell Energy's DFC3000. Three of the proposed projects
include the Company's DFC-ERG(tm), its natural gas letdown station system, and
another proposal incorporates its DFC/T, which combines a DFC3000 fuel cell with
a turbine. These power plants have an electrical efficiency of approximately 60
percent, feature low emissions and reduced carbon dioxide. The Connecticut Clean
Energy selections and DPUC hearings on the proposals are scheduled for the fall.

Cost Reduction

FuelCell Energy continues to reduce product costs. In 2008, the Company is on
track to achieve its cost reduction target of 20 percent for the MW-class power
plants. The Company expects to increase the power output of the DFC1500 and
DFC3000 to 1.4 MW and 2.8 MW respectively, and go into production in mid-2009.
Additional cost savings are expected to come from a more cost effective balance
of plant design, improvements in repeating components materials costs and yield
improvements, and a new lower cost module. Increased production volumes over our
current run rate could further reduce product costs.

MW-class power plants and modules account for approximately 90 percent of the
product backlog and the mix is expected to move primarily to DFC3000 power
plants and modules in fiscal 2009. Volume increases and design changes
incorporated into production are expected to drive multi-MW power plants and
modules to gross margin profitability in the latter half of calendar 2009.

Research and Development Contracts

FuelCell Energy's Vision 21 program to develop the DFC/T that combined its fuel
cell with a turbine to achieve an electrical efficiency of approximately 58
percent exceeded all of its milestones and a multi-MW version is now being
introduced to the market.

During the quarter, the Company received a $1.5 million award from the U.S. Army
Engineer and Development Research Center's Construction Engineering Research
Laboratory (ERDC-CERL) to continue the development and demonstration of their
Electrochemical Hydrogen Separation (EHS) system. The EHS system, when combined
with FuelCell Energy's Direct FuelCell power plants (DFC-H2-EHS) provides an
attractive solution for distributed generation of electricity and hydrogen for
transportation and industrial purposes using renewable fuel sources as well as
readily available fuels like natural gas and propane.

Conference Call Information

FuelCell Energy will host a conference call with investors beginning at 10:00
a.m. Eastern Time on August 28 to discuss the third quarter 2008 results.

The details for accessing the live call are as follows:

* From the U.S. or Canada please dial 877-545-1489
* Outside the U.S. and Canada, please call 719-325-4917
* The passcode is FuelCell Energy
* The live webcast will be on the Investors' section of the Company's
website at www.fuelcellenergy.com.
An audio replay of the conference call will also be available approximately two
hours after the conclusion of the call until Thursday September 4th at midnight:

* From the U.S. and Canada please dial 888-203-1112
* Outside the U.S. or Canada please call 719-457-0820
* Enter confirmation code 9957465
* The webcast will also be archived on the Investors' section of the
Company's website at www.fuelcellenergy.com.
About FuelCell Energy, Inc.

FuelCell Energy is the world leader in the development and production of
stationary fuel cells for commercial, industrial, municipal and utility
customers. FuelCell Energy's ultra-clean and high efficiency DFC(r) fuel cells
are generating power at over 45 locations worldwide. The company's power plants
have generated more than 230 million kWh of power using a variety of fuels
including renewable wastewater gas, biogas from beer and food processing as well
as natural gas and other hydrocarbon fuels. FuelCell Energy has partnerships
with major power plant developers, trading companies and power companies around
the world. The company also receives funding from the US Department of Energy
and other government agencies for the development of leading edge technologies
such as hybrid fuel cell/turbine generators and solid oxide fuel cells. For more
information please visit our website at www.fuelcellenergy.com.

This news release contains forward-looking statements, including statements
regarding the Company's plans and expectations regarding the continuing
development and commercialization of its fuel cell technology. All
forward-looking statements are subject to risks and uncertainties that could
cause actual results to differ materially from those projected. Factors that
could cause such a difference include, without limitation, general risks
associated with product development, manufacturing, changes in the utility
regulatory environment, potential volatility of energy prices, rapid
technological change, competition, and the Company's ability to achieve its
sales plans and cost reduction targets, as well as other risks set forth in the
Company's filings with the Securities and Exchange Commission. The
forward-looking statements contained herein speak only as of the date of this
press release. The Company expressly disclaims any obligation or undertaking to
release publicly any updates or revisions to any such statement to reflect any
change in the Company's expectations or any change in events, conditions or
circumstances on which any such statement is based.

Direct FuelCell, DFC, DFC/T and FuelCell Energy, Inc. are registered trademarks
of FuelCell Energy, Inc. DFC-ERG is a trademark jointly owned by FuelCell
Energy, Inc. and Enbridge, Inc.

FUELCELL ENERGY, INC.
Consolidated Balance Sheets
(Dollars in thousands, except share and per share amounts)

July 31,
2008 October 31,
(Unaudited) 2007
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 50,920 $ 92,997
Investments: U.S. treasury securities 26,746 60,634
Accounts receivable, net 19,780 10,063
Inventories, net 27,116 29,581
Other current assets 8,895 7,730
----------- -----------
Total current assets 133,457 201,005

Property, plant and equipment, net 38,761 39,612
Investments: U.S. treasury securities 26,725 --
Investment and loan to affiliate 10,939 12,216
Other assets, net 485 355
----------- -----------
Total assets $ 210,367 $ 253,188
=========== ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt and other
liabilities $ 776 $ 924
Accounts payable 16,389 9,516
Accounts payable due to affiliate 911 2,881
Accrued liabilities 8,948 8,511
Deferred license fee income 600 --
Deferred revenue and customer deposits 33,959 20,486
----------- -----------
Total current liabilities 61,583 42,318

Long-term deferred revenue 3,084 4,401
Long-term debt and other liabilities 3,116 613
----------- -----------
Total liabilities 67,783 47,332
----------- -----------
Redeemable minority interest 12,835 11,884
Redeemable preferred stock ($0.01 par value,
liquidation preference of $64,120 at
July 31, 2008 and October 31, 2007.) 59,950 59,950
Shareholders' equity:
Common stock ($.0001 par value); 150,000,000
shares authorized at July 31, 2008 and
October 31, 2007; 68,753,256 and 68,085,059
shares issued and outstanding at July 31,
2008 and October 31, 2007, respectively 7 7
Additional paid-in capital 577,594 571,944
Accumulated deficit (507,802) (437,929)
Treasury stock, Common, at cost (8,981 and
12,282 shares at July 31, 2008 and
October 31, 2007, respectively) (90) (126)
Deferred compensation 90 126
----------- -----------
Total shareholders' equity 69,799 134,022
----------- -----------
Total liabilities and shareholders'
equity $ 210,367 $ 253,188
=========== ===========

FUELCELL ENERGY, INC.
Consolidated Statements of Operations
(Unaudited)
(Dollars in thousands, except share and per share amounts)

Three Months Ended
July 31,
2008 2007
---------- ----------
Revenues:
Product sales and revenues $ 23,220 $ 7,807
Research and development contracts 4,684 5,737
---------- ----------
Total revenues 27,904 13,544
---------- ----------

Costs and expenses:
Cost of product sales and revenues 39,010 14,903
Cost of research and development contracts 4,373 4,718
Administrative and selling expenses 4,926 4,676
Research and development expenses 5,741 6,980
---------- ----------
Total costs and expenses 54,050 31,277
---------- ----------

Loss from operations (26,146) (17,733)

Interest expense (16) (24)
Loss from equity investments (245) (414)
Interest and other income, net 900 3,152
---------- ----------

Loss before redeemable minority interest (25,507) (15,019)

Redeemable minority interest (473) (421)
---------- ----------

Loss before provision for income taxes (25,980) (15,440)

Provision for income taxes -- --
---------- ----------

Net loss (25,980) (15,440)

Preferred stock dividends (802) (802)
---------- ----------

Net loss to common shareholders $ (26,782) $ (16,242)
========== ==========

Loss per share basic and diluted:

Net loss per share to common shareholders $ (0.39) $ (0.24)

Basic and diluted weighted average shares
outstanding 68,703,812 67,939,527

FUELCELL ENERGY, INC.
Consolidated Statements of Operations
(Unaudited)
(Dollars in thousands, except share and per share amounts)

Nine Months Ended
July 31,
2008 2007
---------- ----------
Revenues:
Product sales and revenues $ 59,428 $ 21,567
Research and development contracts 15,138 10,194
---------- ----------
Total revenues 74,566 31,761
---------- ----------

Costs and expenses:
Cost of product sales and revenues 98,207 44,679
Cost of research and development contracts 13,644 8,758
Administrative and selling expenses 15,536 13,866
Research and development expenses 17,157 20,489
---------- ----------
Total costs and expenses 144,544 87,792
---------- ----------

Loss from operations (69,978) (56,031)

License fee income, net -- 34
Interest expense (65) (72)
Loss from equity investments (1,295) (1,032)
Interest and other income, net 2,849 5,654
---------- ----------

Loss before redeemable minority interest (68,489) (51,447)

Redeemable minority interest (1,384) (1,233)
---------- ----------

Loss before provision for income taxes (69,873) (52,680)

Provision for income taxes -- --
---------- ----------

Net loss (69,873) (52,680)

Preferred stock dividends (2,406) (2,406)
---------- ----------

Net loss to common shareholders $ (72,279) $ (55,086)
========== ==========

Loss per share basic and diluted:

Net loss per share to common shareholders $ (1.06) $ (0.92)

Basic and diluted weighted average shares
outstanding 68,499,395 59,967,137
-0-
CONTACT: FuelCell Energy, Inc.
Lisa Lettieri
203-830-7494
ir@fce.com