Insight: Americans eye cheap home refueling for natural gas cars By Edward McAllister NEW YORK (Reuters) - When Connie Jones arrives home from her job as an information technology manager in Chandler, Arizona, she parks her car in her garage and fills it up with natural gas. It is a convenience that relatively few Americans can enjoy. "We hook it up, turn it on, and it fills up overnight," said Connie's husband Travis, who bought a natural gas home refueling unit in January 2012. With natural gas at $1.40 per equivalent gallon, it costs the Joneses $30 to drive their Honda Civic GX 1,200 miles each month, about $130 less than an average gasoline car covering the same distance. Home refueling units, which tap into a house natural gas main and compress the fuel so it can fill a vehicle tank overnight, have been available for years. But even though the fuel is cheap and units have to meet safety standards like other household appliances, home refilling is uncommon in the United States, held back by the upfront expense of buying and installing new units, and a lack of natural gas cars. The cars themselves generally cost about $10,000 more than comparable conventional vehicles. "Affordable home refueling is the missing link to public adoption of natural gas vehicles in far greater numbers," said Curtis Martin, program director of the government-funded Clean Cities Coalition in Antelope Valley, California. That may soon change. As the U.S. natural gas drilling boom pushes output to record highs and promises sustained lower prices, General Electric Co, Whirlpool Corp, Eaton Corp and others are developing more affordable home refueling systems. For about a tenth of the price of current models, plus installation, they aim to sell the new units to the millions of homes across America already hooked up to natural gas supplies. At the same time, energy providers in Georgia, California and Utah are in talks about distributing new refueling units when they become available in the next two years, according to interviews with industry executives, aiming to stimulate natural gas demand. Honda Motor Co Ltd, which makes one of the only natural gas passenger cars sold in the United States, has also expressed interest in the new technology. At present, an Italian company called BRC Fuelmaker is the only major manufacturer of such units, which cost about $4,500 and can be installed for around $1,500, depending on the work needed. Its smallest, called the Phill, is about the size of a vacuum cleaner, suitable for mounting on a garage wall. For the Joneses, who last year paid $6,000 for purchasing and installing their home fueling unit, it will take about four years to pay off the initial outlay, experts say. Still, BRC has only sold about 13,000 home units through 25 distributors across the country, according to Francesco Donalisio, director of sales in North America. Sales of the BRC units have not risen in the last five years. "The high initial investment stops people switching to compressed natural gas," said Donalisio, who expressed doubts about whether the new technologies would reduce the cost substantially. AGL Resources, a natural gas provider in Atlanta, began a program in 2012 to lease the Phill model to customers for $60 a month. The venture has disappointed so far, with fewer than ten units installed. "Home refueling has not grown as much as people would have hoped because there aren't many cars to choose from," said Kevin McCrackin, vice president of business development at AGL Resources in Atlanta. The new units, if successful, could make natural gas a more viable alternative to gasoline, driving up sales of the vehicles. There are now only about 66,000 light-duty natural gas-powered cars on U.S. roads, according to the Department of Energy, which tracks vehicles fired by alternative fuels. That is a tiny fraction of the nearly 200 million light-duty vehicles on U.S. roads, according to the Transportation Department. One of the reasons the number is so low is a sparse refueling infrastructure for ordinary drivers. Drivers can fill up at only 605 public compressed natural gas (CNG) stations in the United States, versus more than 120,000 gasoline stations. While few experts are expecting a quick shift in the overall U.S. fleet, natural gas cars could soon complement electric vehicles in denting U.S. reliance on gasoline if it becomes easier to fill up. While the number of small consumer natural gas cars on the road is far smaller than electric vehicles, their 200-mile (322- km) range is twice as large as most electric cars - and they fill up faster. With strong backing from the likes of billionaire T. Boone Pickens, the focus until now has been on converting fleet vehicles to natural gas. Buses, garbage trucks and other heavy duty vehicles can fill up at a central location for between $1 and $1.40 a gallon, $2 cheaper than a gallon of gasoline. Electric vehicle sales have risen considerably in recent years, partly because of the home refueling options. More than 90 percent of the 150,000 electric vehicle owners in the United States use home plug-ins, retailing for about $1,000, not including varying installation costs. Some electric vehicle appliances require a new 220-volt electrical system, which can cost a few hundred dollars. "There is probably enough room in the market for both types of vehicles," said Jay Friedland, legislative director at Plug In America, an electric vehicle advocacy group. I think they are both displacing gasoline vehicles. From a small warehouse in North Salt Lake City, Utah, a little-known company called Go Natural CNG is about to release a new home refueling system after more than two years of research. The system, backed by technology giant Parker Hannifin Corp, will fill up quicker than some models - about one gallon an hour - and last up to 20 years, according to Go Natural CNG Chief Executive Lucas Kjar. The unit, expected by the end of the year, will use hydraulic technology to compress the gas for vehicle use, he said. He did not say how much the unit would cost. But Go Natural may have a lot of competition. General Electric, Whirlpool and Eaton are all working on home refueling technologies expected to be launched in the next couple of years. Their work is attracting interest from utilities with millions of customers, including Questar Corp in Utah and AGL Resources Inc in Georgia. GE, which received a $1.8 million government grant to develop its system, aims to release a unit that will cool natural gas to minus 50 degrees Celsius to extract water and other contaminates before refueling. The process will eliminate the need for gas compression, or maintenance of the unit, it says. GE aims to sell the unit at $500 retail, about a tenth of the cost of current models. Honda, which makes the natural gas-fired Honda Civic GX, has contacted GE and Whirlpool to discuss their plans, according to Elmer Hardy, Honda's senior manager of alternative fuel vehicles. GE said it was in the development phase and declined to comment on the program's progress. Whirlpool declined comment. Eaton Corp, which received a $3.4 million government grant to develop the technology, is working on a unit at its labs in Southfield, Michigan, that would use liquids to compress the gas instead of the traditional metal pistons. It aims to make a unit available for $500 by 2015. "We are seeing if we can do it in a way that reduces the price point," said Clark Fortune, who leads the program at Eaton. The adoption will improve if the costs come down. Editing by Frank McGurty