Rutgers Water Recycling Investment Tool
Introduction
To review important warnings and cautions, please click here.
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Do you wish to use the tool?
Basic Questions About Your Farm
What interest rate do you think you could safely earn on $100,000? *
How many total acres do you have in production?
Do you irrigate your stock using water from any source?
For how many days in the year do you run your irrigation system?
What is the average number of hours per day that you irrigate?
What are the sources of your irrigation water?
Please provide the whole number percentages for the following:
Percent of Total: 0%
Pond Capacity
Do you currently capture your tailwater in one or more ponds?
Baseline Alternative
Do you foresee the need to drill one or more new wells in the future? (If new wells are currently prohibited by law in your location, answer “NO”)?
Recycling water can also recycle some fertilizer, contributing to savings in operation costs.
What do you spend annually on fertilizer? (Include all types, not only what you might add to your irrigation water)
Would you like to simulate the profitability impact of implementing a green marketing program?
Background: Researchers have found that consumers are willing to pay more for nursery products they believe to is “sustainably grown.” After suitably labelling your output—and possibly earning trade association certification—you could therefore charge more for each plant. If you select YES, then this online tool will add a profit of one penny per plant to its calculations, assuming an average density of plants per acre.
Selecting this option could significantly increase the estimated profitability of the recycling investment, especially for larger operations. Implementing a green marketing program, however, would require a significant upfront investment of managerial time. The profitability impact of green marketing could also diminish in the future, if the use of recycled water becomes the industry standard. The online tool does not currently incorporate these two factors.
ANALYSIS OF YOUR RECYCLING PROJECT AS A CAPITAL INVESTMENT IF YOU USE CHLORINE TO DISINFECT RECYCLED WATER
- Today’s capital outlay for recycling project:
- Today’s discounted value of net benefits (50 years):
- NET PRESENT VALUE OF INVESTMENT: [Value A]
What does this mean?
If the number in [Value A] is positive, then the financial benefits of the capital investment are estimated to exceed the up front costs, controlling for the fact that money you receive in the future is less valuable than money your receive today.
The future net benefits of the project are discounted by the interest rate you entered: 5%
If the number is negative, then the estimated financial benefits are less than the estimated up front costs, controlling for the time value of money.
This analysis does not include the value of your time that would be required to implemnet the investment. That cost can be considerable and it should be taken into account on the negative side of the ledger.
Whether the number in [Value A] is positive or negative, you may be eligible for a grant from the federal government to help defray the cost of an upfront capital investment for recycling your irrigation water. You can start by going to the USDA-NRCS website, Apply for EQIP
ANALYSIS OF POTENTIAL CHANGES TO YOUR ANNUAL CASH FLOW IF YOU USE CHLORINE TO DISINFECT RECYCLED WATER
Annual $ benefits attributable to recycling
- Reduced municipal water charges: FINAL_G27
- Electric charges saved on existing wells: FINAL_G28
- Reduced fertilzer costs from recycled fertilizer: FINAL_G29
- Additional profit from green marketing (at a penny per plant): FINAL_G30
- TOTAL: FINAL_G31 [Value C]
Annual $ costs attributable to recycling:
- Lost profits from land taken out of production: FINAL_G34
- Capital replacement costs/maintenance: FINAL_G35
- Electricity to pump recycled water uphill: FINAL_G36
- Chemicals: FINAL_G37
- Labor: FINAL_G38
- TOTAL: FINAL_G39 [Value D]
Annual net benefit/cost excluding loan payment (C-D): [Value E]
Annual loan payment on up front capital cost [at 5% interest and loan term of 30 years: [Value F]