An Economic Feasibility Study of Solar and Diesel Water Pumping Systems for Irrigation in Ethiopia: A Case Study of Kombolcha, Wollo

Abstract

This paper presents the study of economic feasibility analysis of solar water pumping systems compared to diesel based water pumping systems. The study is highly essential for countries with agriculture based economies like Ethiopia. The main disadvantages of the diesel based water pumping system are high fuel cost and abnormal CO₂ emission around 2.3 kg/lit to the atmosphere in Ethiopia. These drawbacks can be solved by a solar water pumping system due to mark-able solar potential in many parts of the country. The total expenditure of both systems was calculated. In addition, the total revenue of both systems was estimated. With the suitable cash inflows and cash outflows the method of Profitability Index has been used in this study. Furthermore, the salvage value and life cycle cost of both systems were assessed. The Profitability Index of the solar water pumping system was found to be 3.2, whereas the diesel based water pumping system was only 0.06. The life cycle cost of the solar water pumping system was estimated to be 218,324.3 ETB (Ethiopia Birr), whereas the diesel based water pumping system was only 1,127,116 ETB. From these results, it can be concluded that the solar water pumping system is the best choice for installation.