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| | {{SPIS Design}} | | {{SPIS Design}} |
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| | | {{Back to Design}} | | | {{Back to Design}} |
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| − | | style="width: 150px; background-color: rgb(222, 226, 192);" | <span style="color:#000000;"><span style="font-size: 90%">'''[[SPIS Toolbox - Pre-select Potential Suppliers|►Go to the Next Chapter]]'''</span></span> | + | | {{Next Chapter}}[[SPIS Toolbox - Pre-select Potential Suppliers|►Go to the Next Chapter]]'''</span></span> |
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| | *PV equipment is more accessible in many parts of the world, including expertise for set up and maintenance. | | *PV equipment is more accessible in many parts of the world, including expertise for set up and maintenance. |
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| − | The tools '''INVEST – Farm Analysis Tool''' and '''INVEST – Payback Tool''' (under the '''[[SPIS_Finance|INVEST]]''' Module) are both designed to assist in determining financial viability of the SPIS. While the former allows for assessing the profitability of the farm enterprise, the latter compares that payback potential of different irrigation technologies. | + | The tools '''INVEST – Farm Analysis Tool''' and '''INVEST – Payback Tool''' (under the '''[[SPIS Invest|INVEST]]''' Module) are both designed to assist in determining financial viability of the SPIS. While the former allows for assessing the profitability of the farm enterprise, the latter compares that payback potential of different irrigation technologies. |
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| − | Assessing the financial viability of the SPIS is a complex procedure which should be accompanied by financial experts. This part of the module only gives an overview of key data and indicators to be generated. Note that all projections and calculations: | + | Assessing the financial viability of a SPIS is a complex procedure, which should be discussed with financial experts. This module only gives an overview of key data required. Note that all calculations: |
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| − | *need to be based on prices which can be determined but also on estimates and assumptions;<br/> | + | *need to be based on prices which can be determined but also on estimates and assumptions; |
| − | *will be contemplating the current situation and future scenarios; | + | *will have to consider the current situation and future scenarios; |
| − | *should compare options for alternative pumping systems (electric, diesel).<br/> | + | *should compare options for alternative pumping systems (electric, diesel). |
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| | The financial analysis builds on three major inputs:<br/> | | The financial analysis builds on three major inputs:<br/> |
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| | </ol> | | </ol> |
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| − | 2. '''Capital expenditure (CAPEX)'''= long term, one-time, investments in non-consumable parts of the business, like<br/> | + | 2. '''Capital expenditure (CAPEX)''': long term, one-time, investments in non-consumable parts of the business, like<br/> |
| | <ol style="list-style-type:lower-alpha;"> | | <ol style="list-style-type:lower-alpha;"> |
| | <li>costs for solar pumping system, reservoir, irrigation system;</li> | | <li>costs for solar pumping system, reservoir, irrigation system;</li> |
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| | </ol> | | </ol> |
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| − | 3. '''Operating expenses (OPEX)'''= ongoing operational and maintenance costs (fixed and variable)<br/> | + | 3. '''Operating expenses (OPEX)''': ongoing operational and maintenance costs (fixed and variable)<br/> |
| | <ol style="list-style-type:lower-alpha;"> | | <ol style="list-style-type:lower-alpha;"> |
| | <li>seeds, fertilizer, pesticides and other inputs for production;<br/></li> | | <li>seeds, fertilizer, pesticides and other inputs for production;<br/></li> |
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| | *capital expenditures / initial capital investment (i.e. prices for components to be financed) for solar and alternative options | | *capital expenditures / initial capital investment (i.e. prices for components to be financed) for solar and alternative options |
| | *sales revenues (market prices); | | *sales revenues (market prices); |
| − | *operating and maintenance costs (prices); | + | *operating and maintenance costs; |
| | *macroeconomic variables (inflation, interest rates, etc.); | | *macroeconomic variables (inflation, interest rates, etc.); |
| | *tax policies (corporate income taxes, VAT dynamics, etc.); | | *tax policies (corporate income taxes, VAT dynamics, etc.); |
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| | These factors influence the financial viability of the different options; hence, different scenarios should be elaborated before taking a decision. | | These factors influence the financial viability of the different options; hence, different scenarios should be elaborated before taking a decision. |
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| | | {{Back to Design}} | | | {{Back to Design}} |
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| − | | style="width: 150px; background-color: rgb(222, 226, 192);" | <span style="color:#000000;"><span style="font-size: 90%">'''[[SPIS Toolbox - Pre-select Potential Suppliers|►Go to the Next Chapter]]'''</span></span> | + | | {{Next Chapter}}[[SPIS Toolbox - Pre-select Potential Suppliers|►Go to the Next Chapter]]'''</span></span> |
| | |} | | |} |
| | {{SPIS Reference}} | | {{SPIS Reference}} |
Solar Powered Irrigation Systems have become a financially viable alternative to electric and diesel water pumps for irrigation of agriculture crops. This is mainly due to the fact that:
The following key indicators and financial statements help to assess the financial viability:
Assessing the financial viability of a SPIS is a complex procedure, which should be discussed with financial experts. This module only gives an overview of key data required. Note that all calculations:
1. the revenues from
2. Capital expenditure (CAPEX): long term, one-time, investments in non-consumable parts of the business, like
3. Operating expenses (OPEX): ongoing operational and maintenance costs (fixed and variable)
When comparing PV systems to diesel or electric pumping systems the following statements apply:
These factors influence the financial viability of the different options; hence, different scenarios should be elaborated before taking a decision.
