Analyzing the Economic Factors Impacting Anaerobic Digester Costs
While anaerobic digestion can appear to have a hefty upfront cost, this solution’s cost in the short and long term can be alleviated by tax incentives, carbon credits, and grants. Additionally, compared to other options of waste management, such as compost and landfill disposal, there are no hauling or tipping fees associated with on-site anaerobic digestion. The upfront capital cost pays for the cost of materials, seamless assembly, installation, and any necessary customizations. Not only can anaerobic digestion generate a return on investment, but it also promotes a circular economy and sustainable food waste management which have great environmental impacts.
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What should an on-site anaerobic digester cost?
Owning your own on-site anaerobic digester is an investment that provides long-term benefits, which empower you to convert your organic waste into valuable resources that you control and can use to your benefit.
Digester ownership lowers the cost of organic waste management since the technology converts the food waste to biogas and biofertilizer, which can be used or sold to generate additional revenue streams that lower operational costs. In addition, owning a unit opens the door to various tax incentives and carbon credits. The US government offers financial incentives to organizations adopting renewable energy and anaerobic digesters can qualify for carbon credits.
In general, the capital cost of an on-site anaerobic digester in the US ranges from approximately $400,000 to $5,000,000 according to EPA AgSTAR, while Chomp’s digesters range from $209,000 - $5,300,000 depending on the unit size.
Breaking down the upfront cost of Chomp’s anaerobic digesters
The base capital cost of Chomp’s Mini system (25-175 tons of waste/year) ranges from $209,000–$580,000 while the Core system (185-1,500 tons of waste/year) ranges from $600,000–$5,300,000. This package covers the cost of materials, seamless assembly, and installation. It also includes the dosing tanks and advanced biogas equipment. Sometimes, the right anaerobic digester solution requires certain customizations catering to an organization's specific needs. Whether that requires an electric generation system to power the facility, gas conditioning for renewable natural gas, or a winterization enclosure for colder climates, Chomp builds units that align with your goals ensuring your unit will run efficiently all year round.
Learn more about the financial and environmental benefits of anaerobic digestion.
What is the ongoing cost of operating a biodigester?
Once the technology of anaerobic digestion is up and running, you will encounter some minimal ongoing expenses related to the unit's operation. Although certain parts of the system do require some inspection and maintenance to ensure proper functionality and optimal performance, Chomp’s systems are designed to be easy to operate, so operating a unit does not require a significant, full-time commitment.
Operators can come from various different backgrounds such as facility or farm workers, waste management professionals, university students, or other volunteers. Chomp’s Mini system requires an average of 4 to 14 operating labor hours per week while the Core requires 17 - 68 hours per week. With Chomp's ongoing support, comprehensive operating and maintenance manuals, and training assistance, your digester will continue to function smoothly without requiring excessive costs.
Chomp’s systems consume minimal amounts of electricity. The innovative design of the unit has a low energy demand, only requiring it for the temperature managing hot water loop and various loads to run pumps, the control system, and lighting. The result is an impressively low utility cost that varies according to the system size and the specific climate at the unit’s location. The typical consumption accounts for approximately 10-15% of the electrical energy generation of the unit.
How to generate a return on investment with an anaerobic digester
Investing in an on-site anaerobic digester provides various financial benefits for organizations from waste management and energy cost savings to tax incentives and carbon credits.
Lowering the amount of waste being sent to landfills leads to cost savings for the waste container cost, hauling fees, and landfill tipping charges. A commercial container can set you back anywhere from $350 to $2,800 on average, and monthly collection fees range from $100 to $250 (Source). According to the 2022 report from the Environmental Research & Education Foundation, tipping fees for US municipal solid waste landfills shot up by 11% from 2021 to 2022, to now average $60.34 per ton (Source). Using an on-site anaerobic digester helps you combat these rising costs from landfills.
The biogas generated from the digester is a renewable natural gas, which can be converted into electricity, facility heat and hot water, cooking gas, energy storage, vehicle fuel, or vehicle charging. This off-setts the purchase of electricity and fuel from the utility provider. There’s no need to rely heavily on utility providers when the biogas can be used directly on-site.
Apart from biogas, anaerobic digestion produces biofertilizer, which can be sold locally or used in on-site farming operations. Biofertilizer is a nutrient-rich organic substitute for chemical fertilizers. Businesses can generate revenue by selling biofertilizer to agricultural markets or use it in their own farming operations. This diversification of income streams enhances financial stability and resilience, while also contributing to a circular economy.
Tax Incentives, Carbon Credits, and Grants Available to lower the cost of anaerobic digester
There are several tax incentives that provide opportunities to reduce the cost of anaerobic digestion by 30-50% like the Investment Tax Credit (IRC § 48), the Energy Production Tax Credit (IRC § 45), the Electricity Production Tax Credit (IRC § 45), and the Accelerated Depreciation Deductions.
Carbon credits represent measurable, verifiable emission reductions achieved through certified climate action projects. These credits can be generated from initiatives that reduce emissions, remove pre-existing greenhouse gas in the atmosphere, or prevent the release of emissions into the environment. After an initial assessment, projects can be registered for carbon credit eligibility and account assignment. The project is then monitored by verifiers ensuring compliance with the standard's requirements. Following verification and approval, placement in the registry allows for the transfer or retirement of credits. The owner can choose to sell the credits directly to a third party or explore alternative methods like brokers, wholesalers, carbon trading platforms, or carbon retailers. Learn more with Chomp’s Carbon Credit Fact Sheet.
There are also various federal grants available from the EPA and USDA to aid in funding anaerobic digestion lowering the cost.
Conclusion
To conclude, included in the price of owning an on-site anaerobic digester is the capital upfront cost and an ongoing operational cost, which are lessened by tax incentives, carbon credits, and grants helping to generate a return on investment. on-site anaerobic digestion is the lowest emissions option for food waste management with a payback period as little as two to four years depending on your unit size and energy use. You will be able to reach the full potential of on-site anaerobic digestion if you have an optimal space for the digester, a secure supply of waste, beneficial use plans for the biogas and biofertilizer, a strategy for funding, and an ongoing operator.
Learn more about Chomp’s digesters.