When a school or office building thinks about distributed energy, it usually means solar panels propped up on a roof.

A small company called IST Energy has another vision: it's developed a shipping container-size contraption that turns your building's trash into electricity and heat. The company is expected to unveil the unit, called the Green Energy Machine (GEM), on Monday.

The idea behind the GEM is to offset a building's energy use while dramatically cutting trash disposal fees. The cost of trash removal can vary greatly, but a university or office park with a number of buildings could pay about $200,000 a year, according to IST Energy executives.

The company says the GEM is clean technology because it doesn't burn the trash. Instead, the machine uses gasification, a process that overall pollutes less than combustion. A number of clean-tech companies are trying to combine gasification with renewable sources of fuel, namely municipal solid waste or biomass.

A demonstration unit of the Green Energy Machine from IST Energy that converts trash into energy.

(Credit: Martin LaMonica/CNET Networks)

The GEM unit is designed to take up as much space as three parking spaces, making it suitable for office buildings, hospitals, and the like. Metal and glass have no energy content, so they should be recycled. But everything else--food, cardboard, plastics, agricultural wastes--can go in.

"Normally, when we tell people what we're doing, they say, 'You can do that? I had no idea that was possible," said Stu Haber, president and chief executive of IST, which is based in Waltham, Mass.

The company, which was spun out of a research and development firm, says it can convert 95 percent of the waste--up to three tons of trash a day--into usable energy. The remaining 5 percent is ash. With three tons of trash a day, a unit can provide enough electricity and heat for a 200,000 square-foot building holding about 500 people, it says.

So far, a handful of universities, a municipality, and a real-estate developer have come by its Waltham, Mass. offices for demonstrations.

Got a big trash bill?
Haber said the unit pays for itself relatively quickly but realizes that the novelty of the GEM could make it a tough sell. He hopes to sell between 5 and 10 units this year. "The first GEM will be the hardest one to sell," he said. Noise from the machine could also be a barrier.

Corporate purchases of solar panels have been growing rapidly, depending on a state's incentives. Haber argued that many companies invest in solar energy to reduce their carbon footprint in a visible way, but a purchase of a GEM can be driven entirely by money, he argued.

Loading garbage into the demonstration unit of the Green Energy Machine.

(Credit: Martin LaMonica/CNET Networks)

Feeding the maximum of three tons of trash will yield about 120 kilowatts of electricity and about double that in heat, which will fulfill about 15 percent of a building's energy needs, IST Energy figures. The bigger financial benefit is in cutting disposal fees, Haber said.

With an up-front cost of $850,000, a GEM unit will have a payback in three to four years, the company calculates. More likely, those interested will go with a leasing option that would eliminate the hefty up-front investment.

"Everybody loves the fact that they're helping the environment, but because we're talking to businesspeople, I have to assume that they're interested because of the very quick payback," he said.

There's also a 10 percent federal tax credit available for this sort of renewable energy, Haber said.

Squeezing more value from refuse
From the end user's point of view, the GEM is designed to be simple. Through a loader, trash goes into the machine, which shreds the garbage.

Then the machine removes moisture and creates pellets--shaped just like the sawdust pellets used in pellet stoves. Then the pellets are put into an air-fed gasifier designed by the company, which generates what is called a synthetic gas, or producer gas, which typically contains mostly hydrogen and carbon monoxide.

The dark pellets were made from office trash. On the right are sawdust pellets used in pellet stoves.

(Credit: Martin LaMonica/CNET Networks)

That gas is the fuel for making electricity or heat. IST Energy recommends that the best energy source would be a natural-gas microturbine, which would need to have its setting adjusted, or a generator. It takes about two hours before the GEM runs from its own energy output, so the main carbon emissions come from burning the synthetic gas.

Garbage is already used as fuel source in a number of places. Some landfill operators capture methane from degrading trash to make electricity. Trash incinerators, too, can create some usable energy, but they are considered inefficient and polluting.

Looking to reduce shipments of diesel fuel, the U.S. Army last year tested portable trash-powered generators in Iraq, but the project is said to have not met all its goals.

For energy technology firms looking for a cheap source of fuel, trash appears to be attracting more interest.

Another Boston-area company called Ze-Gen is pursuing the same general idea as IST Energy. Last week, it raised a Series B round of $20 million to build a facility to take construction debris and make electricity at a central location using a gasification process.

Another firm, InEnTech in Oregon, is pursuing a different technology process to get the most energy out of household garbage.

Many of these firms have yet to test their products at commercial scale. But at a time when people are seeking clean and renewable-energy sources, waste may come full circle and become a valuable commodity again.