Economic feasibility and determinants of biogas technology adoption: Evidence from Bangladesh

Abstract

Biogas technology can play a significant role in reducing dependency on fossil fuels, and in increasing of rural energy access. This study assesses the profitability of biogas plants and examines the determining factors affecting the adoption of biogas technology by rural households in Bangladesh. Data were extracted from primary sources through a structured questionnaire in four districts in Bangladesh. Stratified random sampling involved 140 biogas adopters with a wide range of biogas plant sizes (2 m3–120 m3) along with 140 non-adopters. The research used the benefit-cost ratio for profitability estimation. The study employed a logit model for analyzing the key factors influencing the adoption of biogas technology. The outcomes revealed that the benefit-cost ratio is higher than 1, and 6 m3 is the most economically viable plant among all sizes. Sensitivity analysis helped the research to check the stability of a biogas plant in different economic conditions (10% increase in cost or decrease in profit and constant changes in interest rate) and discovered that all plant sizes were economically stable. Logit regression analysis showed that factors including age, livestock possession, extension service, education, family size, income, and access to credit are influencing the decision of such adoption. In addition to that, economic, technical, ecological and societal reasons were measured for establishing biogas plants. Therefore, this study recommends a change in government approaches and development of extension services, better promotions, adult education and credit facilities to adopt biogas technology in Bangladesh.