Financial and Economic Analysis of a 1-Tonne Capacity Mobile Solar-Biomass Hybrid Dryer for Maize Drying

Joseph Oppong Akowuah; Ato Bart-Plange; Komla Agbeko Dzisi

doi:doi:10.11648/j.ijae.20210603.11

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Financial and Economic Analysis of a 1-Tonne Capacity Mobile Solar-Biomass Hybrid Dryer for Maize Drying

Joseph Oppong Akowuah, Ato Bart-Plange, Komla Agbeko Dzisi

Published in International Journal of Agricultural Economics (Volume 6, Issue 3)

Received: 24 April 2021 Accepted: 11 May 2021 Published: 20 May 2021

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Abstract

Drawbacks associated with natural convection solar dryers are encouraging the development of low-capacity hybrid drying systems which integrate renewable energy in their operation. However, information on the cost-effectiveness of such drying systems for decision-making by investors is lacking. This study seeks to assess the financial and economic feasibility of a solar-biomass hybrid dryer for maize drying. A cost-benefit analysis was done using net present value (NPV), benefit-cost ratio (BCR), and internal rate of return (IRR) as well as payback period to measure the financial viability of the dryer operation and the profitability of the investment. The results show that the total capital expenditure required to establish the drying system is $ 5,263 with a running cost of $ 1,166 per year. Using an economic utilisation period of 10 years, the investment in the dryer was determined to be viable with an NPV of $ 4,876 and an IRR of 38% at a capital cost of 24%. At a drying charge of $2.11/bag, the results show the initial capital invested can be recouped in a PBP of 2.7 years at a BCR of 1.48. These financial indicators suggest that investment in the dryer is profitable. Further analysis shows that, at a projected 30, 266.80 tonnes of maize produce per season by smallholder maize farmers in the study area, about 210 of the hybrid dryers are needed to provide drying services to the farmers. This translates into about 420 direct job opportunities created for the youth and the potential to prevent economic loss of maize grains equivalent to $ 5,684.2 per year due to post-harvest losses of maize in the study area. The adoption and scale-up of the dryer have implications in addressing maize post-harvest loss at the smallholder level and job creation for the youth in the country.

Published in	International Journal of Agricultural Economics (Volume 6, Issue 3)
DOI	10.11648/j.ijae.20210603.11
Page(s)	98-105
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2021. Published by Science Publishing Group

Keywords

Solar-biomass Hybrid Dryer, Post-harvest Loss Prevention, Cost-benefit Analysis, Job Creation

References

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APA Style

Joseph Oppong Akowuah, Ato Bart-Plange, Komla Agbeko Dzisi. (2021). Financial and Economic Analysis of a 1-Tonne Capacity Mobile Solar-Biomass Hybrid Dryer for Maize Drying. International Journal of Agricultural Economics, 6(3), 98-105. https://doi.org/10.11648/j.ijae.20210603.11

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ACS Style

Joseph Oppong Akowuah; Ato Bart-Plange; Komla Agbeko Dzisi. Financial and Economic Analysis of a 1-Tonne Capacity Mobile Solar-Biomass Hybrid Dryer for Maize Drying. Int. J. Agric. Econ. 2021, 6(3), 98-105. doi: 10.11648/j.ijae.20210603.11

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AMA Style

Joseph Oppong Akowuah, Ato Bart-Plange, Komla Agbeko Dzisi. Financial and Economic Analysis of a 1-Tonne Capacity Mobile Solar-Biomass Hybrid Dryer for Maize Drying. Int J Agric Econ. 2021;6(3):98-105. doi: 10.11648/j.ijae.20210603.11

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@article{10.11648/j.ijae.20210603.11,
  author = {Joseph Oppong Akowuah and Ato Bart-Plange and Komla Agbeko Dzisi},
  title = {Financial and Economic Analysis of a 1-Tonne Capacity Mobile Solar-Biomass Hybrid Dryer for Maize Drying},
  journal = {International Journal of Agricultural Economics},
  volume = {6},
  number = {3},
  pages = {98-105},
  doi = {10.11648/j.ijae.20210603.11},
  url = {https://doi.org/10.11648/j.ijae.20210603.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijae.20210603.11},
  abstract = {Drawbacks associated with natural convection solar dryers are encouraging the development of low-capacity hybrid drying systems which integrate renewable energy in their operation. However, information on the cost-effectiveness of such drying systems for decision-making by investors is lacking. This study seeks to assess the financial and economic feasibility of a solar-biomass hybrid dryer for maize drying. A cost-benefit analysis was done using net present value (NPV), benefit-cost ratio (BCR), and internal rate of return (IRR) as well as payback period to measure the financial viability of the dryer operation and the profitability of the investment. The results show that the total capital expenditure required to establish the drying system is $ 5,263 with a running cost of $ 1,166 per year. Using an economic utilisation period of 10 years, the investment in the dryer was determined to be viable with an NPV of $ 4,876 and an IRR of 38% at a capital cost of 24%. At a drying charge of $2.11/bag, the results show the initial capital invested can be recouped in a PBP of 2.7 years at a BCR of 1.48. These financial indicators suggest that investment in the dryer is profitable. Further analysis shows that, at a projected 30, 266.80 tonnes of maize produce per season by smallholder maize farmers in the study area, about 210 of the hybrid dryers are needed to provide drying services to the farmers. This translates into about 420 direct job opportunities created for the youth and the potential to prevent economic loss of maize grains equivalent to $ 5,684.2 per year due to post-harvest losses of maize in the study area. The adoption and scale-up of the dryer have implications in addressing maize post-harvest loss at the smallholder level and job creation for the youth in the country.},
 year = {2021}
}

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TY  - JOUR
T1  - Financial and Economic Analysis of a 1-Tonne Capacity Mobile Solar-Biomass Hybrid Dryer for Maize Drying
AU  - Joseph Oppong Akowuah
AU  - Ato Bart-Plange
AU  - Komla Agbeko Dzisi
Y1  - 2021/05/20
PY  - 2021
N1  - https://doi.org/10.11648/j.ijae.20210603.11
DO  - 10.11648/j.ijae.20210603.11
T2  - International Journal of Agricultural Economics
JF  - International Journal of Agricultural Economics
JO  - International Journal of Agricultural Economics
SP  - 98
EP  - 105
PB  - Science Publishing Group
SN  - 2575-3843
UR  - https://doi.org/10.11648/j.ijae.20210603.11
AB  - Drawbacks associated with natural convection solar dryers are encouraging the development of low-capacity hybrid drying systems which integrate renewable energy in their operation. However, information on the cost-effectiveness of such drying systems for decision-making by investors is lacking. This study seeks to assess the financial and economic feasibility of a solar-biomass hybrid dryer for maize drying. A cost-benefit analysis was done using net present value (NPV), benefit-cost ratio (BCR), and internal rate of return (IRR) as well as payback period to measure the financial viability of the dryer operation and the profitability of the investment. The results show that the total capital expenditure required to establish the drying system is $ 5,263 with a running cost of $ 1,166 per year. Using an economic utilisation period of 10 years, the investment in the dryer was determined to be viable with an NPV of $ 4,876 and an IRR of 38% at a capital cost of 24%. At a drying charge of $2.11/bag, the results show the initial capital invested can be recouped in a PBP of 2.7 years at a BCR of 1.48. These financial indicators suggest that investment in the dryer is profitable. Further analysis shows that, at a projected 30, 266.80 tonnes of maize produce per season by smallholder maize farmers in the study area, about 210 of the hybrid dryers are needed to provide drying services to the farmers. This translates into about 420 direct job opportunities created for the youth and the potential to prevent economic loss of maize grains equivalent to $ 5,684.2 per year due to post-harvest losses of maize in the study area. The adoption and scale-up of the dryer have implications in addressing maize post-harvest loss at the smallholder level and job creation for the youth in the country.
VL  - 6
IS  - 3
ER  -

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Author Information

Joseph Oppong Akowuah

Faculty of Mechanical and Chemical Engineering, Kwame Nkrumah University of Science and Technology, Kumasi, Ghana
Ato Bart-Plange

Faculty of Mechanical and Chemical Engineering, Kwame Nkrumah University of Science and Technology, Kumasi, Ghana
Komla Agbeko Dzisi

Faculty of Mechanical and Chemical Engineering, Kwame Nkrumah University of Science and Technology, Kumasi, Ghana

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Joseph Oppong Akowuah, Ato Bart-Plange, Komla Agbeko Dzisi. (2021). Financial and Economic Analysis of a 1-Tonne Capacity Mobile Solar-Biomass Hybrid Dryer for Maize Drying. International Journal of Agricultural Economics, 6(3), 98-105. https://doi.org/10.11648/j.ijae.20210603.11

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ACS Style

Joseph Oppong Akowuah; Ato Bart-Plange; Komla Agbeko Dzisi. Financial and Economic Analysis of a 1-Tonne Capacity Mobile Solar-Biomass Hybrid Dryer for Maize Drying. Int. J. Agric. Econ. 2021, 6(3), 98-105. doi: 10.11648/j.ijae.20210603.11

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AMA Style

Joseph Oppong Akowuah, Ato Bart-Plange, Komla Agbeko Dzisi. Financial and Economic Analysis of a 1-Tonne Capacity Mobile Solar-Biomass Hybrid Dryer for Maize Drying. Int J Agric Econ. 2021;6(3):98-105. doi: 10.11648/j.ijae.20210603.11

Copy | Download

@article{10.11648/j.ijae.20210603.11,
  author = {Joseph Oppong Akowuah and Ato Bart-Plange and Komla Agbeko Dzisi},
  title = {Financial and Economic Analysis of a 1-Tonne Capacity Mobile Solar-Biomass Hybrid Dryer for Maize Drying},
  journal = {International Journal of Agricultural Economics},
  volume = {6},
  number = {3},
  pages = {98-105},
  doi = {10.11648/j.ijae.20210603.11},
  url = {https://doi.org/10.11648/j.ijae.20210603.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijae.20210603.11},
  abstract = {Drawbacks associated with natural convection solar dryers are encouraging the development of low-capacity hybrid drying systems which integrate renewable energy in their operation. However, information on the cost-effectiveness of such drying systems for decision-making by investors is lacking. This study seeks to assess the financial and economic feasibility of a solar-biomass hybrid dryer for maize drying. A cost-benefit analysis was done using net present value (NPV), benefit-cost ratio (BCR), and internal rate of return (IRR) as well as payback period to measure the financial viability of the dryer operation and the profitability of the investment. The results show that the total capital expenditure required to establish the drying system is $ 5,263 with a running cost of $ 1,166 per year. Using an economic utilisation period of 10 years, the investment in the dryer was determined to be viable with an NPV of $ 4,876 and an IRR of 38% at a capital cost of 24%. At a drying charge of $2.11/bag, the results show the initial capital invested can be recouped in a PBP of 2.7 years at a BCR of 1.48. These financial indicators suggest that investment in the dryer is profitable. Further analysis shows that, at a projected 30, 266.80 tonnes of maize produce per season by smallholder maize farmers in the study area, about 210 of the hybrid dryers are needed to provide drying services to the farmers. This translates into about 420 direct job opportunities created for the youth and the potential to prevent economic loss of maize grains equivalent to $ 5,684.2 per year due to post-harvest losses of maize in the study area. The adoption and scale-up of the dryer have implications in addressing maize post-harvest loss at the smallholder level and job creation for the youth in the country.},
 year = {2021}
}

Copy | Download

TY  - JOUR
T1  - Financial and Economic Analysis of a 1-Tonne Capacity Mobile Solar-Biomass Hybrid Dryer for Maize Drying
AU  - Joseph Oppong Akowuah
AU  - Ato Bart-Plange
AU  - Komla Agbeko Dzisi
Y1  - 2021/05/20
PY  - 2021
N1  - https://doi.org/10.11648/j.ijae.20210603.11
DO  - 10.11648/j.ijae.20210603.11
T2  - International Journal of Agricultural Economics
JF  - International Journal of Agricultural Economics
JO  - International Journal of Agricultural Economics
SP  - 98
EP  - 105
PB  - Science Publishing Group
SN  - 2575-3843
UR  - https://doi.org/10.11648/j.ijae.20210603.11
AB  - Drawbacks associated with natural convection solar dryers are encouraging the development of low-capacity hybrid drying systems which integrate renewable energy in their operation. However, information on the cost-effectiveness of such drying systems for decision-making by investors is lacking. This study seeks to assess the financial and economic feasibility of a solar-biomass hybrid dryer for maize drying. A cost-benefit analysis was done using net present value (NPV), benefit-cost ratio (BCR), and internal rate of return (IRR) as well as payback period to measure the financial viability of the dryer operation and the profitability of the investment. The results show that the total capital expenditure required to establish the drying system is $ 5,263 with a running cost of $ 1,166 per year. Using an economic utilisation period of 10 years, the investment in the dryer was determined to be viable with an NPV of $ 4,876 and an IRR of 38% at a capital cost of 24%. At a drying charge of $2.11/bag, the results show the initial capital invested can be recouped in a PBP of 2.7 years at a BCR of 1.48. These financial indicators suggest that investment in the dryer is profitable. Further analysis shows that, at a projected 30, 266.80 tonnes of maize produce per season by smallholder maize farmers in the study area, about 210 of the hybrid dryers are needed to provide drying services to the farmers. This translates into about 420 direct job opportunities created for the youth and the potential to prevent economic loss of maize grains equivalent to $ 5,684.2 per year due to post-harvest losses of maize in the study area. The adoption and scale-up of the dryer have implications in addressing maize post-harvest loss at the smallholder level and job creation for the youth in the country.
VL  - 6
IS  - 3
ER  -

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