Economics of Biogas Plants and Solar Home Systems: For Household Energy Applications

Abstract

Electricity and clean cooking fuels are the two basic ingredients that are indispensable to alleviate energy poverty and bring about human development, but still today, globally, more than one billion people do not have access to these two forms of energy. The major reasons for the lack of these two energy services are economic constraints. Biogas plants and solar home systems (SHS) are two technically feasible renewable energy technologies to deliver cooking and electricity loads in rural areas. The negative economic perception (i.e. high cost) of these two renewable energy technologies is primarily responsible for making their diffusion slow in developing countries. This work presents a model to examine the economic performance (i.e. benefit to cost ratios) of these new energy technologies against three household load categories. Applying this model, this study shows that biogas plants used together with SHS show attractive economic performance e.g. a benefit cost ratio (BCR) of 6.6 for load Category 1(basic load). It is evidenced from this work that biogas plants together with SHS are economically promising in rural areas in developing country situations particularly in Bangladesh.