Michael Kanellos 10 30 09, 6:49 AM

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Power Your House With Stale Beer and Old Wine

If you've collected 250 gallons of old Two Buck Chuck, E-Fuel can help you keep on the lights.

The Los Gatos, Calif.-based company last year began to tout its home system for turning organic waste into ethanol. Distilling ethanol at home effectively eliminated the problem of distributing ethanol or finding gas stations that sold E85.

But it didn't solve the other problem with ethanol-based transportation: only a small fraction of cars sold in the U.S. actually can run on ethanol or gasoline. General Motors and Ford are increasing the number, but it will take time. (The home distillation unit also cost $10,000 before tax credits.).

To help get around the so-called lack-of-demand problem, the company has devised a companion generator, the E-Fuel Grid Buster, that lets you turn the ethanol into electricity. Some energy gets lost in the conversion but you don't have to worry about filling up at home anymore. The scraps get distilled and fed into the generator. It is showing off a home fuel system in Livermore this week.

And in the pure ethanol market, it has reached out beyond homeowners to sell units to businesses. Gordon Biersch, Sunny Delight and a few others have installed units that convert about 29,000 tons of waste into ethanol. Tanker trucks then distribute it to customers.