Financial and Economic Analysis of a 1-Tonne Capacity Mobile Solar-Biomass Hybrid Dryer for Maize Drying

Abstract

Drawbacks associated with natural convection solar dryers are encouraging the development of low-capacity hybrid drying systems which integrate renewable energy in their operation. However, information on the cost-effectiveness of such drying systems for decision-making by investors is lacking. This study seeks to assess the financial and economic feasibility of a solar-biomass hybrid dryer for maize drying. A cost-benefit analysis was done using net present value (NPV), benefit-cost ratio (BCR), and internal rate of return (IRR) as well as payback period to measure the financial viability of the dryer operation and the profitability of the investment. The results show that the total capital expenditure required to establish the drying system is $ 5,263 with a running cost of $ 1,166 per year. Using an economic utilisation period of 10 years, the investment in the dryer was determined to be viable with an NPV of $ 4,876 and an IRR of 38% at a capital cost of 24%. At a drying charge of $2.11/bag, the results show the initial capital invested can be recouped in a PBP of 2.7 years at a BCR of 1.48. These financial indicators suggest that investment in the dryer is profitable. Further analysis shows that, at a projected 30, 266.80 tonnes of maize produce per season by smallholder maize farmers in the study area, about 210 of the hybrid dryers are needed to provide drying services to the farmers. This translates into about 420 direct job opportunities created for the youth and the potential to prevent economic loss of maize grains equivalent to $ 5,684.2 per year due to post-harvest losses of maize in the study area. The adoption and scale-up of the dryer have implications in addressing maize post-harvest loss at the smallholder level and job creation for the youth in the country.