Investing in methane digesters on pennsylvania dairy farms: Implications of scale economies and environmental programs

Elizabeth R. Leuer, Jeffrey Hyde, Tom L. Richard

Research output: Contribution to journalArticle

25 Scopus citations

Abstract

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.

Original languageEnglish (US)
Pages (from-to)188-203
Number of pages16
JournalAgricultural and Resource Economics Review
Volume37
Issue number2
DOIs
Publication statusPublished - Oct 2008

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All Science Journal Classification (ASJC) codes

  • Agronomy and Crop Science
  • Economics and Econometrics

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