Interview with Homebiogas

In 2015 HomeBiogas LTD (formerly Ecogas Israel Ltd) successfully sold their Homebiogas small scale biogas plant on Indigogo, they reached 207% in revenue and 270% by units. They offered different perks for different prices. You could buy one of their units from as cheap as 890 $. During that time their website stated that the actual selling price would be about 1500 $. So buying in advance, saving a lot of money, was the incentive you were looking for if you were interested in buying an out of the box Ikea-style put together home scale biogas system.

But you could even save more. They also got a special offer called “local distributions”. You could buy 10 of their units for 8900 $ and get one for free. This brings the unit price down to 809 $. According to Indigogo 4 of 10 of the local distributor packages were claimed. But most people went for the Super Early Bird (890 $ - 70 times) and the Early Bird (945 $ - 71 times). So they pretty much sold out very fast. And they also collected 207% of the amount in money (and 270% of units) they were aiming for. Which I think is pretty impressive in the field of home scale biogas.

In August 2016 they opened their shop at their website. Their unit is now available for 990 $, which is a huge difference from the originally announced price of 1500 $. With the unit price coming down by over 500 $ within 6 month the crowdfunding buyers incentive is nearly gone, expect that the bought units are now shipped.

We took the chance to ask Ami Amir, Business Developer at Homebiogas, some questions we got from different discussions with Biogascentral memebers.

Biogascentral: The price difference between the Indidgogo campaign and the sales price of your online shop is nearly the same. How did you manage to get the price from 1500 $ down to 990 $?

Amir: We reduced our prices due to our success in reducing our cost of goods. We wanted to transfer this saving to our customers. Our initial plan was to offer the products at list $1,500, and we were happy to manage our new design and supply chain so as to reduce our costs. Most of our backers paid less than $900 – since they took advantage of the various discounts we offered early adopters.

Biogascentral: Seems like you working hard on cutting the price as low as you can. According to a paper at EASME - https://ec.europa.eu/easme/en/sme/9375/domestic-biogas-system-turning-waste-value - your target price per unit is 500 $. Is there any time frame from when you will be able to offer that price?

Amir: We are addressing two communities (1) Underserved communities in developing countries in Africa, Asia and Latin America and (2) Middle class families in developing countries. Families in many developing countries spend 10% to 30% of their income on energy, purchasing charcoal, firewood or gas. We want to be able to offer these families an affordable product that (1) reduces the damage to their health due to indoors smoke; (2) reduces the amount of untreated organic waste and (3) makes economic sense with reasonable ROI. Hence we are constantly striving to reduce our selling price for those communities. Regarding more affluent societies, we find that they are much less sensitive to price, but on the other hand are looking for some additional features (like year round operation in cooler climates). Hence you will find that with time, once quantities allow us to reduce prices, that the basic DIY product’s price will drop significantly and at the same time, an upgraded unit with extra features will be available at a higher price.

Schedules depend on market growth and penetrations.

Biogascentral: The EASME paper also states that Homebiogas is protected by two patents. According to patent search Ecogas Ltd only holds one patent: „WO2014203047 A1- Lightweight assemblable appliance and respective method for production of biogas and liquid fertilizer“  It seems like that your patent application got a non-entry in Germany on the 18th of December 2015 and on the 21st of September 2016 you deleted the request of extension of the European patent (to any country).  Could you give us any details why the patent isn‘t applicable in Germany and why you revoked the patent for other EU countries?

Amir: We have one patent that is being registered as we speak in multiple countries and also a Design Patent that covers the “look and feel” of our design that is being registered at a few countries. There was an older patent application that we allowed to lapse, since it applied to some designs that we are not offering today, and the cost to maintain it was not justified.

Biogascentral: Why did you go for a patent at all? With Open Source and Open Hardware there a new methods around that help people all over the world. Those people could then build their own biogas systems.

Amir: We are a business that needs to grow and succeed. We spent $Millions developing our products and the only way we make money is by selling products. We are not a software company. For us to be able to help those communities we need to be a successful, profitable business.  

Biogascentral: Gas leakage is always a hot topic, especially at industry scale AD plants. According to the technical papers about your system it is designed to release a surplus of biogas into the atmosphere. Many Biogascentral members were very angry that this is a feature.

Amir: The amount of Methane we release is absurdly small, and the waste we dispose of would have generated hundreds of percent more Methane into the atmosphere. This is not “leakage” but a controlled release when there is an oversupply of gas that is not being utilized by the users. We are not what you call “industry scale” AD’s who benefited from hundreds of millions of subsidies from EU governments; we are here to save lives and improve the quality of life of underserved communities. So please compare us to the alternatives.

Biogascentral: But actually you are funded by the EU as well. You entered Phase 1 of EASME in 2016 and got 50.000 € from the European Union. Compared to your investment capital of 1.8 Million $ this is proportionally the same as industry scale biogas plant might get.

Amir: I do not know understand how you can compare the hundreds of millions of European subsidies and tax rebates to €50k which is less than 2% of what we spent to date.

Biogascentral: When we look at the small scale biogas sector most system are Do-IT-Yourself products. Some of them are technically very advanced. (Statement from Amir: Wrong statement: Except for our HomeBiogas Household System, there is no other biogas system that comes even close regarding efficiencies and price/performance.)  On the other hand there are already companies on the market selling different types of biogas systems. Most of them come from China and India. One Chinese company offers a very similar system for a much cheaper price, their system starts at 250 €. Are you aware of the Chinese company?

Amir: We are not only aware of that Chinese company; but rather have built and tested their “wannabe” product. You are welcome to spend a few “Groschen” and purchase one of those units for you to experiment with. You will be sorely disappointed with the results (and the amount of released Methane). We do not consider this as an alternative, but just as a nuisance factor.

Biogascentral: While we speak a very well-known Indian company released a similar system. Homebiogas needs to be innovative to stay in the market and not been overrun by copycats. Is your first unit only the beginning? Will other units follow? What could we expect next from Homebiogas?

Amir: We have a very well defined roadmap and will announce our new products at the appropriate time and place.