Eh, you're right. Transporting water is stupid, I wasn't thinking that through very well.
That said energy in different mediums does have different useful properties, and while transporting water may not be too bright, the fact that it's fairly ubiquitous at many locations, and while hydrogen may be hard to store and transport, I believe in some instances it's easier to transport than electricity when there's no infrastructure in place.
I interpreted the top level comment's stance as this is a non-story because converting water to hydrogen is worthless (or at least it's worth hasn't changed). I still reject that stance, as I think efficient conversion between mediums may open possibilities that we previously discounted, so may be strategically useful.
This converts electricity to hydrogen. There are very few situations where that is desirable - electricity is almost always more useful.
So this has value only in that you can store the hydrogen or use it somehow. You can also store electricity, so they question boils down to: Which is easier to store: Hydrogen or Electricity?
Water simply never enters into the question.
Storing hydrogen is hard enough that it's pointless to even talk about. Storing electricity can only be done in small quantities.
That's why I said methane: The best thing to do is grab some carbon and make methane with your hydrogen, methane you can store.
This is not really a solution for anything though, round trip efficiency of solar cell->electricity->hydrogen->methane->electricity would be quite low.
Much better is heat+coal+water = methane (you can thermalize water with heat). You can use a solar collector or nuclear power.
gravity+water meaning hydroelectric? We're kinda maxed out on that, plus if you wanted to store energy pumped water storage is better than methane (but there are not a lot of suitable sites).
Edit: You could not possibly be talking about water, could you?
How exactly were you planning on extracting the hydrogen from the water?
No, there's no way you were talking about water, that would be far too stupid. So please tell me what medium you meant.