Investing in Methane Digesters on Pennsylvania Dairy Farms: Implication of Scale Economies and Environmental Programs

A stochastic capital budget was used to analyze the effect of net metering policies and carbon credits on profitability of anaerobic digesters on dairy farms in Pennsylvania. We analyzed three different farm sizes—500, 1,000, and 2,000 cows—and considered the addition of a solids separator to the project. Results indicate that net metering policies and carbon credits increase the expected net present value (NPV) of digesters. Moreover, the addition of a solids separator further increases the mean NPV of the venture. In general, the technology is profitable only for very large farms (1,000+ cows) that use the separated solids as bedding material.


Issue Date:
2008
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/45662
Published in:
Agricultural and Resource Economics Review, Volume 37, Number 2
Page range:
188-203
Total Pages:
16




 Record created 2017-04-01, last modified 2017-08-25

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