Financing Anaerobic Digestion Projects
Once you determine an anaerobic digester project may be technically feasible at your farm, you need to evaluate whether it will work financially. There are two stages of planning described below: Preliminary Project Planning and Advanced Project Planning.
Assessing the financial feasibility of an anaerobic digester project is an iterative process. The first step is to do preliminary project planning. In this step, you do preliminary screening and a technical feasibility assessment to determine if the project can technically work. Then, using those assumptions, you can develop a high level estimate of the project’s financial feasibility considering revenues and expenses.
After the preliminary project planning is complete, you will likely have to refine your assumptions to optimize technical or financial performance with a new project plan. Next, you need to conduct detailed financial modeling. If the results are favorable, you can implement the project.
Resources and Tools
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- Washington State University's Anaerobic Digester System Enterprise Budget Calculator helps dairy owners, AD system industry experts, and AD researchers calculate the economic value of investment under a variety of technology and price scenarios for an AD system.
- Funding On-Farm Anaerobic Digestion provides an overview and case studies of funding mechanisms available to farm operators. (EPA, 2012)
- Profits from Manure Power? The Economics of Anaerobic Digesters On-Farm Exit summarizes basic financial considerations for installing on-farm anaerobic digesters, including economies of scale, farm energy use, price of electricity and financing (The Minnesota Project, undated)
- Digester Project Funding Guide (PDF) Exitis a guide to planning a digester project, conduct a feasibility study, estimate funding needs and develop an application for USDA funding. (Innovation Center for U.S. Dairy, 2012)
- Biogas Economic Model and Toolkit Exit is an MS Excel tool that models project scenarios and can provide an initial assessment of electricity generation at farms and dairy processing facilities. (Baker Tilly, 2012)
- RETScreen Exit is an Excel-based analysis tool that helps to quickly and inexpensively determine the technical and financial viability of potential renewable energy and cogeneration projects. Note: this model is not specific to AD. (Canada Natural Resources Council, 2013)