True, but why not make it a government priority to find alternative energy (of any kind)? I didn't mean to imply that only included fuel cells.
I envision it as basically being a defense bid. We want a fuel source to power, say, automobiles. Private companies make bids, the govt issues funding grants or contracts, then picks one or two to pursue at the end. No different from saying "we want a fighter that can equip all branches of the military, has possible VTOL abilities, and is cheap."
The research funding would still go to the private sector, and hopefully only the best technology would emerge.