CLIFTON, New Jersey - H Power Corp. (NASDAQ: HPOW), a leading fuel cell development company, today announced that it has signed a third joint study agreement with Osaka Gas Co., Ltd., a natural gas utility serving more than 6,000,000 customers in the Kansai area of Japan.

The agreement calls for the delivery of eight 500-Watt proton exchange membrane (PEM) residential cogeneration fuel cell systems for in-house and field beta testing for the Japanese residential market. H Power has completed deliveries of the first generation systems for alpha testing under a previously announced agreement between H Power, Mitsui &Co., Ltd. (H Power's marketing partner in Japan), and Osaka Gas.

The 500-Watt system combines H Power's proprietary fuel cell stack with Osaka Gas' proprietary steam reformer. The system provides primary power and hot water for a residence, and can provide power at either 250 Watts or 500 Watts. In addition to operating at a constant output, it can also function in a load-following mode, in which the unit reacts continuously to changes in a residence's power and heating requirements. The unit is connected to the grid, and is capable of automatic start-up and shut-down.

Osaka Gas has been alpha testing an earlier version of the system since January 2002. The next-generation system includes design improvements based upon data and feedback from the alpha tests.

H Power will deliver two units to Osaka Gas by fourth calendar quarter of 2002, with the remainder of the units being shipped by first calendar quarter of 2003. In addition, the companies agreed to examine ways to expand the presence of these next-generation units both within and outside of Japan.

According to Kuniaki Honda of Osaka Gas, "We are very pleased to be working with H Power as the sole provider of fuel cell stacks, balance of plant and system integration expertise. We continue to believe that our combined technologies will produce an efficient, cost-effective fuel cell system well suited to the residential markets in Japan."

H. Frank Gibbard, Chief Executive Officer of H Power Corp., commented, "This agreement represents the next important step towards the commercialization of our 500-Watt residential fuel cell system for the Japanese residential market. We continue to build on the success of our development program with Osaka Gas, whereby we have manufactured ten 500-watt cogeneration systems of which eight have already been shipped to Osaka Gas for evaluation and field-testing. We are pleased to have further strengthened and expanded our relationship with Osaka Gas, and look forward to working closely with them as we pursue commercialization in Japan and exploring possible applications outside of the Japanese market."

About H Power Corp.

H Power Corp. (NASDAQ: HPOW) is a fuel cell development and manufacturing company, focused on near-term commercialization of fuel cell systems. H Power has designed proton-exchange membrane (PEM) fuel cell systems to provide electricity for a wide range of applications including residential cogeneration products for homes, and power units for portable applications. H Power is addressing markets for its products in the U.S., Japan and Europe through its relationships with Energy Co-Opportunity (ECO), Mitsui, Osaka Gas, Kurita Water Systems, Gaz de France, PSA Peugeot Citroen, Fortum Oy and Naps Systems Oy, Air Products & Chemicals and Ball Aerospace. H Power has manufacturing facilities in Monroe, North Carolina and Montreal, Canada. For additional information, please visit our website at www.hpower.com.

Certain expectations and projections regarding the future performance of H Power discussed in this news release are forward-looking and are made under the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These expectations are based on currently available competitive, financial and economic data along with the Company's operating plans and are subject to future events and uncertainties. Management cautions the reader that the following factors, amongst others, may cause H Power's plans to differ or results to vary significantly from those expected, including the impact of competition, technology development, pricing, market demand and marketplace acceptance, any adverse change in its relationship with ECO, and other risks set forth from time to time in H Power's filings with the Securities and Exchange Commission, including, but not limited to the risks set forth in H Power's Annual Report on Form 10-K. H Power undertakes no obligation to publicly release the results of any revisions to forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. The events highlighted herein should not be assumed to be items that could affect the future performance of the Company.

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