Cost-Benefit Analysis and Financial Viability of Household Biogas Plant Installation in Aleta Wondo District, Southern Ethiopia

Abstract

Background: Installation of biogas plants has both costs and incomes; installation and maintenance service demand nancial costs and reduction of costs for purchasing rewood, kerosene and chemical fertilizers are bene ts or incomes. This study investigates the cost-bene t analysis and nancial viability related to biogas plant installation in Southern Ethiopia.Method: A multi-stage sampling technique was employed to select sample households. A total of 105 adopter households were selected for household survey.Results and conclusion: The installation cost took the largest share of the total cost of installation and was one of the main constraints that hindered installation. Installation increased household income by reducing the costs incurred for buying rewood, kerosene and chemical fertilizers. Relatively, lower plant size was more pro table than larger plant size. Installation under the subsidy scheme was more nancially viable at 10 % discount rate than its counterparts. The pro tability of lower plant size was more sensitive to changes in the discount rate, the level of expenditure saving and input price than larger plant size, under an assumption and without subsidy. Installation of low cost plants could more attract the engagement of a large number of rural households with low economic capacity. Besides, installation of lower plant sizes could more substantially enhance household income by saving costs incurred for buying rewood, kerosene and chemical fertilizers.