A new system debuts on Friday that converts onion juice into electricity at Gills Onions, the largest fresh onion processor in the United States. The Oxnard, California-based company expects its new onion-fuelled power to reduce its electric bill by $700,000 a year and cut its annual greenhouse gas emissions by up to 30,000 tons.

The happy ending to this green energy tale, however, started with another question: how to get rid of onion waste. “When we peel an onion, 35 to 40% of the onion comes off before we have a usable onion. That’s the top, tail and skin around the onion before you get to the meat,” said Steven Gill, coowner of the 25-year-old firm.

They used to haul the waste to the fields for composting, but that became a problem. Ten years ago, Gill started looking at technology for a solution, including microturbines.

“We ended up shredding the skins as they come out of the plant and extracting all the juice, which is very high in sugars, and bacteria love that stuff,” Gill said.

In the new system, bacteria produce methane gas from the juice. The gas then goes to two 300 kilowatt fuel cells, creating enough power for 460 homes. The company expects to get 35 to 40% of its electricity from the onsite generator.