Economic Context
Introduction:
Our economic analysis provides both the cost estimate of the alternative renewable energy used for the Greenhouse and the source of funding revenues which will help support the project. The technical section of the 2019 LaFarm Greenhouse Report considered two forms of alternative energy: solar and geothermal. We have conducted a cost analysis to examine each system.
Solar System Cost Breakdown
The price of the whole system is based on how much of the electricity it produces per watt. In 2019, the average national solar panel system cost is approximately $2.99 per watt (Rogers, 2019). According to our technical analysis, the energy consumed for the greenhouse is 8203 wattage including fan, vents, irrigation, water heater, and water pump. Therefore, the cost of buying and installing the system brings to $24526.97 ($2.99* 8203). There are various components and structures that go to the solar system. The two primary costs’ components determining the solar system (photovoltaic) are equipment and the installation cost(Borenstein, 2008)
Equipment and Installation Cost
The equipment and installation for the solar panels entail various components, including panel, inverter, permit/inspection, structural BOS (balance of system), electrical BOS, sales tax, and burden rates. Below is the average cost breakdown of each item for equipment and installation that determines the system costs (Fu, 2018).
| CATEGORIES | COST BREAKDOWN |
| PANELS | $0.47/Wdc* |
| INVERTER | $0.12/Wdc |
| PERMIT/INSPECTION | $0.06/Wdc |
| STRUCTURAL BOS | $0.10/Wdc |
| ELECTRICAL BOS | $0.19-$0.27/Wdc |
| Sales tax | Weighted national Average: %6.9 |
| Burden Rate | (% of direct labor) total national average: 31.8% |
| Installation Labor | $0.3/Wdc |
*Watt direct current
- Panels: One of the components that accounts for the solar panel system is a module or the solar panel. We look at the panel’s price in dollars per watt. And with this system, the solar panel is approximately $1.47/watt.
- Inverter: A solar inverter plays an important role in the solar system for the greenhouse in converting the electricity from the solar panels that then can be used by lighting, heating, and other components that go in the greenhouse. It basically converts DC (direct current) to AC (alternating current) if it is an off-grid solar power system. There are various types of inverters, but one that is suitable for the small scale residential solar power system is the string inverter. The inverter here is calculated as the price per watt, which is roughly $0.12/watt. When the inverter reaches its cycle in roughly about 10 years, the inverter will be replaced and incurred the additional cost to the system. Having this type of inverter replaced costs typically from a low-end of $850 to a premium quality of $1800 or higher.
- Permit/Inspection: The cost associated with permit or inspection includes the fee of building permit preparation and submission and interconnection application.
- Structural BOS and Electrical BOS: Both BOSs accounts for hooking up the rails and clamps, conductors, switches, combiners and transition boxes, grounding equipment, monitoring system, fuses, and breakers. The structural BOS alone costs $.10/Wdc, and electrical BOS costs resulted in between $.19 to $0.27/Wdc due to the inverter option.
- Installation labor: This cost is accountable for direct installation labor. There will be a need to have electricians to properly check where and how to install the solar panels. The cost incurs approximately $0.3/watt.
Maintenance Cost
Another cost component that contributes to the solar system is the maintenance cost. This cost covers labor for cleaning the solar panels, annual inspection, and repairs if needed. During the summer and spring, the solar panels could get really dusty and dirty from the pollen, bird droppings, and dust. All of these conditions would block the system from receiving direct sunlight. So, the panels need to be cleaned one to two times a month. Considering the solar system for the Greenhouse at LaFarm is small-scale, the cleaning should be quick, though it does mean that time must be invested. However, if it is a broken glass panel, the panel is cracked, loose connection or the inverter is needed to be replaced, LaFarm might incur additional expenses. For the broken glass, the cost ranges from $20 to $350 plus the labor. Cracked panel costs from $100 to $400 or more.
Geothermal: Sinking the Greenhouse
Sinking the greenhouse involves four major costs, including excavation (with a backhoe), concrete bricks, polyurethane concrete sealant, and drain tile.
- Excavation the plotted area of the greenhouse where its size will be based on our technical analysis costs roughly $9,610 with a backhoe.
- Concrete Bricks costs roughly about $1,716 (Hunker, 2019).
- Polyurethane Concrete Sealant is approximately about $996 (Porch 2019).
- Drain Tile is about $4,100 (Hunker 2019).
For both concrete sealant and drain tile are significant in flood prevention for the greenhouse. They incur the cost as much as laying the foundation for the area, but they will save as a flood mitigation in the future. Then, the total cost for implementing this system is about $16, 421, excluding the labor and maintenance cost.
Geothermal System Cost Breakdown
A geothermal system is relatively capital intensive, yet it also provides low and predictable operating costs. According to a study report by State and Local Climate and Energy program on on-site renewable energy generation, the typical total cost of geothermal system ranges between $11,220– $20,160 per ton capacity with the typical project size of 2 tons-10 tons ( ton is a measure of how much heat can be moved in one hour, so one ton is about 12,000 BTU’s (British Thermal Units). 2 tons is equivalent to about 7,000 in watts, which roughly almost covers the energy needs for the greenhouse. Therefore, the size of the project of 3 tons is suitable for the greenhouse with the cost of roughly $13,000 to $14,000 including equipment, installation, and looping configuration. The annual operations and maintenance range anywhere from $150-$222 per year (On-Site Renewable Energy Generation, 2004) including the simple maintenance of the equipment to replacing a new compressor for the central heat pump unit. A geothermal system has long lifespans- its underground loops often lasts more than half a century. The system, however, also suffers from wear and tear since it both runs from heating and cooling the greenhouse. So it is significant to have regular maintenance to check on the operation of the outdoor components of the geothermal system.
Funding Revenues
One of the most important parts of this project is to analyze the source of funding for the project. Without the source of funding, LaFarm could not financially support to build the greenhouse. Therefore, financial support is one of the crucial components of the success of the project. There are two areas we have researched for funding: Lafayette-based funds and outside grants.
Lafayette College:
As explored at the beginning of this report, one of the key stakeholders in the construction of the greenhouse is Lafayette’s Development Office (LDO). LDO manages and organizes funding from generous donors and alumni throughout the years in the support of growth, connection, and partnership. Asking for the support of donors or alumni who may have an interest in expanding the capacity of LaFarm may be a possible route to explore. LaFarm can work closely with the development office to communicate the needs and the visions it has toward developing an off-grid greenhouse.
Another way to fund the project using Lafayette funds is through the capital budget. Each year, Lafayette creates a capital budget that showcases which projects it hopes to fund in the coming year. The LaFarm greenhouse could be one of these projects, especially because it would fulfill Lafayette’s long term vision and goals. Examples of this include educational incentives such as a classroom environment for students to learn about sustainability, a shelter for volunteers from any undue weather, and connections with the Easton community.
Grants:
Another source of funding is through applying for grants in outside organizations. There are three organizations that could be potentials for LaFarm: the Clif Bar Family Foundation, Northeast Sustainable Agriculture Research, and the National Sustainable Agriculture Coalition. These also have been suggested before by previous capstone groups. Each organization provides set programs for farmers and projects that are associated with supporting renewable energy in the agricultural setting. The grant opportunity provided by these organizations could also be a potential setback in terms of complications in the process since each one involves different requirements and documentation.
For the Clif Bar Family Foundation, the grant it offers is given to applicants that “protect Earth’s beauty and bounty; create a robust, healthy food system; increase opportunities for outdoor activity; reduce environmental health hazards; build stronger communities” (Clif Bar Family Foundation, n.d.). It specifies the interest in building the relationship and supporting the project that involves this kind of area. The applications for the small grant deadline are the 1st of February, June, and October. The dollar amount that is generally awarded averages about $7,000.
Another grant opportunity is through Northeast Sustainable Agriculture Research and Education (SARE) that offers “grants and education to advance innovations in sustainable agriculture.” They offer grants that are also associated with supporting renewable energy for the agriculture or education setting. One of the grants provided under the Farmer Grant of Research and Education Grant endorses those who want to gain more knowledge in farming as well as skills applied to changes that lead to greater sustainability throughout the Northeast region. It also offers other grants, many of which could fit the needs of the Greenhouse at LaFarm. These grants provide up to $15,000.
Last but not least, another organization that Lafayette College could benefit from is the National Sustainable Agriculture Coalition. It provides grants in many categories such as renewable energy, food safety, local and regional food systems, and sustainable and organic research. Under Rural Energy for American Program, for instance, offers the opportunity to farmers or businesses that seek out to obtain energy efficiency improvements and purchase the renewable systems. It offers grants up to $20,000 of each fiscal year and accordingly to the size of the projects.
Conclusion
The purpose of this analysis is to give the cost estimate to the system. It does not necessarily give the weighting to which system is the most feasible one. With the cost estimate, the office of sustainability can manage the cost that is fundamental and crucial to the system, and work from there in the future. The source of funding revenues will be a good direction in the future plan where students or office of sustainability themselves works toward its needs and visions to communicate those sources that can fund the project.
To read the Conclusion of our report, click here.