Make or Buy? Implications of On-Site Renewable Hydrogen Production Versus Market Procurement for the Total Cost of Ownership of a Fuel Cell Bus Fleet

The deployment of hydrogen-powered public transport requires operators to decide not only whether to adopt fuel-cell buses, but also how hydrogen should be supplied. This study compares two sourcing strategies, as follows: on-site hydrogen production (Make) and external procurement (Buy). An operator-centered framework combining Levelized Cost of Hydrogen (LCOH) and Total Cost of Ownership (TCO) is applied to two Italian cases, using project-specific procurement and technical data from Monfalcone/Gorizia and Ferrara together with explicit modeling assumptions. Under base-case assumptions, Make yields an LCOH of €13.67/kg H2 and a fleet TCO of €2.34/km, compared with €2.51/km for Buy at a delivered green hydrogen price of €12/kg. The deterministic break-even price is €10.25/kg, while both hydrogen configurations remain more expensive than diesel (€1.24/km). A probabilistic analysis based on 10,000 Latin Hypercube simulations and six uncertain parameters shows that Make is less costly in 78.8% of cases and Buy in 21.2%. The median probabilistic break-even price is €10.38/kg, with a 5th–95th percentile range of €8.79–12.38/kg. Delivered hydrogen price is the main driver, followed by Make CAPEX, fleet utilization, and financing conditions. Hydrogen sourcing therefore remains a strategic investment choice, with implications for capital exposure, renewable-energy integration, economic sustainability, and supply resilience.