The recent articles,
“Advanced Disposal Services: Hauling a Heavy Load” and “Solid Play in Solid Waste” looked at
waste management services. The group has
exploited increased demand and market fragmentation to deliver strong profits
and growth. Investors have flocked to
the sector, inspired by one acquisition announcement after another. There may
be more afoot in the sector than consolidation.
There are some
newcomers to the solid waste management sector that have passed up the usual
business model of garbage trucks, transfer stations and landfills. These innovators
are rethinking solid waste and bringing new technologies to the sector,
potentially disrupting the business model that has been so effective for the
garbage haulers.
In the last
article we looked Recology with its alternative view on waste as valuable
resource. HomeBiogas Ltd.
is yet another innovator with an entirely different approach to solid waste.
Home Biogas has
developed a closed-loop waste management system for the residential market that
cuts out the middleman in kitchen scraps recycling. The system converts household food scraps,
including meat and dairy leftovers, and animal manure into cooking gas and
liquid fertilizer for use in the home. About
200 liters of gas is produced from each liter of food waste. The system has a 500 liter capacity to store
gas, which is enough to run a barbecue grill for about 45 minutes or fire a gas
burner on a stove for two hours. As long
as the householder continues to feed the system with food waste, it will
produce gas. Fertilizer is a handy by-product.
The experience
level of the average person with anaerobic digesters is low at best. Most have no experience at all with such
systems. Home Biogas has tried to set up
a user-friendly set-up and operating sequence.
The system arrives in a small box with do-it-yourself instructions. After the system is put together it is
activated with starter material. Time to
first biogas is expected to be about one to three weeks.
It sounds quite
compelling especially considering the $995 retail price. It is also versatile enough to be used for
water heating or lighting if biogas-compatible equipment is hooked up to the
gas output. However, the Home Biogas
system is practical in only a few settings.
First, it only operates in warm climates where the scraps in the system
will not freeze. Some modifications are
necessary in colder climates such as electric heaters for the digester tank or
placing the digester inside a larger greenhouse. Second, it appears practical only for single
family homes, condominiums or garden level apartments where the householder has
access to secure outdoor space.
While the
company started out targeting the residential market, others have found
interesting applications for the HomeBiogas
system. The European Union provided
funding for 40 systems for a Palestinian village in the West Bank and the
system has been used at an orphanage in Uganda.
It would be
interesting to watch HomeBiogas as it continues perfecting its technology. Achieving the ability to processing meat and
dairy waste is a significant improvement over other biogesters that accept
plant matter only. The company claims customers
in 56 countries around the world, which provides some indication that this
feature has particular appeal. It would
also be interesting to see if the system can be scaled for larger scale
applications such as apartment buildings or commercial applications.
HomeBiogas is a
privately held company based in Israel.
The company keeps its financial matters close to its vest. Reportedly the company has used product crowd
funding to take in a small amount of money for working capital. It has also taken in an estimated $3.0 million
in early rounds from an angel investor.
Neither the author of the Small Cap Strategist web
log, Crystal Equity Research nor its affiliates have a beneficial interest in
the companies mentioned herein.
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