he saves 30,000 a year on a piece of equipment that cost 1 million + a federal grant that is not spelled out. That means it only takes 25 years for the investment to pay off. You are assuming that what was true almost 20 years ago is true today.
Ron Koetsier, who has 1,200 dairy cows on 160 acres near Visalia in Tulare County, invested about $1 million to get a digester built in 1985.
Technology has improved since 1985 and costs have come down.
http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2004/05/14/BAGJG6LG3R15.DTL
The Straus Farms' covered-lagoon methane generator, powered by methane billowing off a covered pool of decomposing bovine waste, is expected to save the operation between $5,000 and $6,000 per month in energy costs. With those savings, Straus estimates he will pay back his capital investment in two to three years.
It says 50% matching grant above which would be 500k.
the quote"Straus estimates he will pay back his capital investment in two to three years." is not found in the article above.
Another problem, it says he "since 2002 has been saving about $30,000 a year on energy costs" then almost in the same breath says, "eventually expects to save about 75 percent of his total energy costs, reducing the bill to about $15,000 a year"
This is a 34 year payback, not a 2-3 year pay back. If he started in 1985 he would have at least 15 years to go.
A dollar today isn't worth a dollar yesterday. 1mill from 1985 would be worth over 60 million dollars today. You have to look at the cost of money and interest or the performance in relationship to a managed or indexed investment. Then he added 500 thousand in 2001 that would be 780k in todays dollars, so the system cost today would be 61 million dollars.
That is the true cost of the system. So what is the true payback on the system?
Only 1373 years!