Volume 9, Issue 2, June 2020, Page: 45-52
Profitability Analysis of Family-size Biogas Plant Installation in West Hararghe Zone, Oromia National Regional State, Ethiopia
Tale Gedefa, Department of Natural Resource Economics and Policy, College of Natural Resource and Environmental Science, Oda Bultum University, Chiro, Ethiopia
Emebet Abera, Department of Management, College of Business and Economics, Oda Bultum University, Chiro, Ethiopia
Received: May 8, 2020;       Accepted: May 25, 2020;       Published: Jun. 3, 2020
DOI: 10.11648/j.ijrse.20200902.14      View  56      Downloads  91
Biogas technology, which converts biological waste into energy, is considered as an excellent tool to improve the lives, livelihoods, health, ecosystem and economy. In Ethiopia, biogas technology has been domesticated to improve the rural energy security and household’s income by reducing their dependence on traditional biomass energy and chemical fertilizers. The profitability of biogas installation is rendered doubtful despite its numerous benefits and domestication efforts. Hence, this study aimed at evaluating the cost-benefit analysis and Profitability of biogas technology at household level in West Hararghe zone, Eastern Ethiopia. By using multistage sampling technique, cross-sectional data were collected from 105 systematically selected adopter households. The costs incurred and the benefits gained were analyzed using paired t-test. Payback Period (PBP), benefit cost ratio (BCR) and Net Present Value (NPV) were analyzed using different economic formula. The results indicated the most commonly domesticated plant is fixed dome biogas with volumes of 6 m3 and 8 m3. Investing 6 m3 biogas plant with subsidy (0.73 year) had short PBP than the 8 m3 plant (0.97 year). This implies, subsidy has been attracting households into biogas adoption. The BCR under assumption with subsidy was found to be 1.34 and 1.10 at 10% discount rate for 6 m3 and 8 m3 plants, respectively. Under both assumptions with and without subsidy, the NPV results for 6 m3 and 8 m3 biogas plant sizes turn out positive. In general, the results of PBP, BCR and NPV shown that the biogas investment is preferable and profitable for continuing the investment for the future.
Biogas Energy, Biogas Plant Size, Profitability, Ethiopia
To cite this article
Tale Gedefa, Emebet Abera, Profitability Analysis of Family-size Biogas Plant Installation in West Hararghe Zone, Oromia National Regional State, Ethiopia, International Journal of Sustainable and Green Energy. Vol. 9, No. 2, 2020, pp. 45-52. doi: 10.11648/j.ijrse.20200902.14
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