Economic viability and factors affecting farmers’ willingness to pay for adopting small-scale biogas plants in rural areas of Cameroon

Abstract

This study provides an in-depth economic analysis to aid decision-making in the adoption of small-scale biogas technology in rural areas of Cameroon. It also provides evidence of the field investment characteristics of the biogas energy supply in rural areas of Cameroon. The methodology focused on assessing the economic viability of different sizes of biogas plants and the willingness of farmers to pay for the same. A sample of 180 farmers was selected for the study. Data collection was carried out from December 2020 to May 2021 using a questionnaire survey and participant observation. The results show that all small-scale biogas plants are economically viable. Benefit-cost ratios were 1.01, 1.19, 1.50, 1.02, 1.21 and 2.04 for the 4 m3, 6 m3, 8 m3, 10 m3, 20 m3, and 25 m3 biogas plants. The net present values in US dollars (USD) were 959, 1790, 2695, 2658, 6047, and 12267 for the 4 m3, 6 m3, 8 m3, 10 m3, 20 m3, and 25 m3 biogas plants, respectively. The internal rate of return was higher than the applied discount rate of 12 %. The minimum payback period of 2.24 years was recorded for the 25 m3 while the maximum of 3.37 years was recorded for the 10 m3 biogas plants, respectively. With a disproportionate increase in the cost of biogas plants by 20 % and a 20 % decrease in benefits with a discount factor, the net returns are positive, indicating that all biogas plants are economically viable. The mean willingness to pay is estimated at 13 USD or 8000 FCFA. This resulted in an average repayment period of 11.5 years. The provision of extension services, financial incentives, and regulation of the small-scale biogas market will motivate farmers to adopt the technology.