Solar Water Heater for Tourist Lodge Business Proposal. Draft: 6 August Business Description Solar Water Heater (SWH) for tourist lodge

Transcription

1 Solar Water Heater for Tourist Lodge Business Proposal Business Description Solar Water Heater (SWH) for tourist lodge Draft: 6 August 2007 Proponent The Khutse Kalahari Lodge has been in operation since The Lodge is run by a manager at location. It is also assisted by business partners located in Gaborone and overseas. Location The Khutse Kalahari Lodge is situated 10 km from the eastern gate of the Khutse Game Reserve, 220 kms north-west of Gaborone, and is the final frontier before one enters the renowned Central Kalahari Desert and Central Kalahari Game Reserve. Business Factors The Khutse Kalahari Lodge is strategically located outside the Khutse Game Reserve. The lodge consists of 12 individual guest houses with double bed, toilet and shower, and a common area with office, bar, kitchen, restaurant and conference facilities. There are supporting buildings such as laundry, workshop and staff houses. Guest houses Bar and restaurant Although the solar water heater systems have only been in operation for less than 4, an investment decision has to be made to replace the SWH systems or, alternatively use the diesel generator for heating water. A diesel generator with engine provides power for large loads and simultaneously charges batteries that power smaller loads when the generator is not running. Three groups of solar water heaters take care of the hot water requirement of the lodge. 1

2 Deutz F6L912 diesel engine with a Marelli Motori three phase 56kW generator Three battery banks with inverters provide energy when the generator is not running Description of the SWH system The lodge uses Solar Touch solar water heaters with electrical back-up elements for water heating. Each unit has a capacity of 300 litres and is supplied by 3 solar panels. In total there are 10 units (3 groups of 3 units and 1 single unit). Water is circulated by means of polypropylene underground pipes. Some of the units are leaking due to frost damage and are in need of resoldering. It appears that the units are direct systems, without heat exchangers. Warm water production has decreased over time due to extensive scaling of the units since the water conditions in the Khutse area are unfavorable for direct SWH systems. Three solar water heater units with tank capacity of 300 litres Pre-Assessment Calculations are based on the collector area presently installed. The price of the SWH including installation at the lodge is estimated to be P3,500/m 2. The average solar radiation is estimated to be 5 kwh/m² per day. Total SWH system efficiency is taken as 4. The variable with the highest uncertainty is the specific diesel consumption which is defined as the diesel consumption of the generator with engine per kwh of electricity generated. This value is estimated as 0.25 litre/kwh. An overview of values that are used in the preassessment are given in the table on the right. Solar Water Heater Output and Diesel Saved Collector area 60 m² Installed price of SWH 3,500 P/m² SWH investment 210,000 P Solar irradiation 5.00 kwh/(m²*d) Total SWH system effiency 0.40 Energy generated kwh/d Specific diesel consumption 0.25 litre diesel/kwh Diesel replaced 30.0 litre/day Cost of diesel incl transport 5.00 P/litre Diesel saved per day 150 P/day Diesel saved per year 54, P/year 2

3 The pre-assessment Table1 on page 4 below contains all above data. Calculations were repeated for grid electricity instead of electricity generated by a diesel engine. The calculations are based on data from the table on the right. Results of this assessment are shown in Table 2 on page 5 below. Diesel Electricity ROI 18% Payback Period Solar Water Heater Output and Electricity Saved Collector area 60 m² Installed price of SWH 3,500 P/m² SWH investment 210,000 P Solar irradiation 5.00 kwh/(m²*d) Total SWH system effiency 0.40 Energy generated kwh/d Cost of electricity 0.35 P/kWh Electricity saved per day 42 P/day Electricity saved per year 15, P/year The table above left shows a comparison between the two sources of energy. From this Table, it can be observed that it makes economic sense for Khutse Kalahari Lodge to repair or replace the SWH systems since the payback period is less than 4. However, for a lodge that is connected to the electric grid, it is not financially beneficial to use SWH, presuming that the assumptions that are made here are correct. The graphs below give the sensitivity analysis for the diesel and electric grid cases. 4 3 Sensitivity Analysis SWH replacing diesel generator Capital Investment percentage change of ROI Investment Lifespan Units/annum Price/unit Variable cost of sale/unit -3 total fixed costs -4 percentage change of parameter 60 Sensitivity Analysis SWH replacing grid electricity Capital Investment percentage change of ROI Investment Lifespan Units/annum Price/unit Variable cost of sale/unit total fixed costs -60 percentage change of parameter 3

4 Table 1: Pre-Assessment of tourist lodge using Solar Water Heater to reduce diesel consumption INSABA Preassessment of Project Proposals Country: Pilot Region: RE Technology: Business Idea: Botswana South of Khutse Game Reserve Solar Thermal Solar Water Heater to replace diesel fuel in tourist lodge Proponent name, contact Khutse Kalahari Lodge Years of experience as owner of business 4 Number of employees w/contract 12 Proponent uses bank acount (yes=5, No=0) 5 Experience with formal loan (received=5, applied=3, no=0) 5 Experience in cost calculations, business p(no=0, several=5) 5 Practice in maintaining/operating equipment (RET) (none yet=0, regularly=5) 5 Total 36 Calculation of ROI Investment Capital Investment Lifespan Determination of parameters Cost of 60 m² SWH system including installation Life of SWH Definitions Total cost of technology investment Life of the technology - i.e. period before it must be replaced Production 10,950 Litre of diesel saved per year Units produced per year Price/unit 5.00 Cost of diesel per litre, including transport Sales price per unit produced and sold Revenue 54,750 BWP per year Sales price multiplied by number of units sold Variable cost/unit Cost per unit produced e.g. material, processing packaging Total fixed costs Amortization/unit: ,000 Direct costs per unit: ,000 Maintenance cost per year costs of power, fuel added to variable cost Annual indirect costs such as rent, telephones, salaries Amount needed per unit to cover investment in lifetime Variable costs plus amortization plus cost of energy Gross Margin/unit 3.72 Sales price per unit less the direct costs per unit Total fixed costs divided by the number of units Fixed costs/unit 0.18 produced Total costs ,000 Direct costs plus fixed costs Net Margin ,750 Revenue less total costs ROI 18% Return on Investment = net margin divided by capital investment Payback period Lodge SWH 210, , capital investment divided by cash flow until intial expenses are compensated by the net margin 4

5 Table 2: Pre-Assessment of tourist lodge using Solar Water Heater to reduce electricity consumption INSABA Preassessment of Project Proposals Country: Pilot Region: RE Technology: Business Idea: Botswana South of Khutse Game Reserve Solar Thermal Solar Water Heater to replace grid electricity in tourist lodge Proponent name, contact Khutse Kalahari Lodge Years of experience as owner of business 4 Number of employees w/contract 12 Proponent uses bank acount (yes=5, No=0) 5 Experience with formal loan (received=5, applied=3, no=0) 5 Experience in cost calculations, business p(no=0, several=5) 5 Practice in maintaining/operating equipment (RET) (none yet=0, regularly=5) 5 Total 36 Calculation of ROI Investment Capital Investment Lifespan Determination of parameters Cost of 60 m² SWH system including installation Life of SWH Definitions Total cost of technology investment Life of the technology - i.e. period before it must be replaced Production 43,800 kwh of electricity saved per year Units produced per year Price/unit 0.35 Cost of electricity per kwh Sales price per unit produced and sold Revenue 15,330 BWP per year Sales price multiplied by number of units sold Variable cost/unit Total fixed costs Amortization/unit: ,000 Direct costs per unit: ,000 Maintenance cost per year Cost per unit produced e.g. material, processing packaging costs of power, fuel added to variable cost Annual indirect costs such as rent, telephones, salaries Amount needed per unit to cover investment in lifetime Variable costs plus amortization plus cost of energy Gross Margin/unit 0.03 Sales price per unit less the direct costs per unit Total fixed costs divided by the number of units Fixed costs/unit 0.05 produced Total costs ,000 Direct costs plus fixed costs Net Margin Revenue less total costs ROI Return on Investment = net margin divided by capital investment Payback period Lodge SWH 210, , capital investment divided by cash flow until intial expenses are compensated by the net margin 5