Business Viability Scenario for Solar Powered Irrigation in Mozambique

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Revision as of 14:32, 22 February 2022 by ***** (***** | *****) (→‎Calculating Crop Water Requirement)

Introduction

This business model case looks into the financial viability of solar powered irrigation in Mozambique. All the data and prices used in this scenario are based on the market information obtained in January 2022 and was collected by contacting leading solar and diesel pumps provider in Mozambique. The information was collected via email and telephone inquiries.

Demand Assumption

For the business scenario, a smallholder farmer in Zambezia province in Mozambique is considered and he/she owns 1,2 hectors of land. The farmer wants to install a solar powered irrigation systems (SPIS) and is practicing two crop systems. This scenario also explores different funding models (grant, PAYGO..) for financing the SPIS system.

To calculate the business scenario for solar powered irrigation systems (SPIS) in Mozambique, our methodology included four steps:

  1. Calculating the maximum annual crop water requirement
  2. Sizing the SPIS system accordingly
  3. Sizing the diesel system accordingly
  4. Modelling the financial viability of the SPIS system

Calculating Crop Water Requirement

For this analysis, the farmer adopts a two-farming season with solo cropping i.e., only one crop is planted in the entire area of a farm at one time. The selected crops are Maize and Tomato. Maize is the staple crop in Mozambique and tomato is one of the high value crops. The main cropping season starts from Oct / Nov and the second cropping season starts in May. The farmer uses surface irrigation for maize as it is the most common form of irrigation in Mozambique and has an efficiency of 65%. For tomatoes, he/she will use drip irrigation with an efficiency of 90%.

Using the SPIS Toolbox – Water Requirement Tool, the maximum daily irrigation water requirement of the crops is calculated to be 64 m3 /day in the hottest month, based on the average rainfall and mean daily temperature of Zambezia Province.

Table with the average rainfall and the mean daily temperature

Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec
Mean daily Temperature [°C] 25 24 23 23 21 20 20 20 22 24 24 24
Rainfall (mm/month 290 290 260 150 60 70 30 30 20 60 150 360

Sizing the SPIS system

The SPIS system is based on the technical and financial assumption shown in the table below. The selected system is also already available in the Mozambican market and can meet the desired flow rate.

Technical assumptions

Daily solar irradiance for Zambezia 5.371 kWh/m
System loss 25%
Array type Fixed
Daily water pumping rate 64 m3 /day
Head 10 m
Required flow rate if the pump runs for 6 hours 10.6 m3/hr
Selected pump’s flow rate at 10 m head 15 m3
Maximum vertical lift 40
Type of pump Submersible
Solar panels lifetime 25 years

Financial specifications

Discount rate 13%
Price (CAPEX) 80,000 MZN
Maintenance cost* 4% of CAPEX

3200 MZN per year

*Replacement cost for spare parts such as charge controller, inverter and pumps was not considered in the financial calculation. For simplicity, the scenario looks at 25 years of life time for all components of the SPIS system.

Sizing the Diesel Pump

The selected diesel pump has the following specification and is already available in the Mozambican market.

Diesel Pump’s specification

Flow rate 36 m3/hr
Rated output 2.8kW (3.8hp) @3600rpm
Fuel consumption rate 347ml/kWh @3600rpm
Fuel consumption Fuel consumption rate*Rated output

0.97 l/hr

CAPEX 34,970 MZN
Maintenance cost 4% of CAPEX

1399 MZN

Operating cost 14,074 MZN/year
Diesel price per litre 62 MZN/liter

Based on the irrigation demand, the diesel pump will run for approximately 227 hrs/year to meet all our water demands (shown in table below).

Working time for diesel pump in a year

May June July Au Sep Oct Nov Dec Jan Feb Mar Apr
water needs (m3/day) 24,2 31,3 59 64,3 59 15,2 3,9 0 10 0 0 0
hours the diesel pump needs to run to meet the daily water need [hr] 0,67 0,86 1,63 1,78 1,63 0,42 0,10 0 0,27 0 0 0
Generator working time [hrs/month] 20,8 26,1 50,8 55,4 49,2 13,1 3,25 8,6
Diesel pump working time [hrs/year] 227,2

Modelling the Financial Viability of the Solar Pumps

A cost comparison was done to see how do the diesel and solar pump compare over a lifetime of 25 years. This comparison looks at the CAPEX and operation & maintenance cost for both diesel and solar pumps (shown above).

As shown in the table as well as graph below, after 5 years, the solar pumps will be cheaper than diesel pump.

Comparison of diesel vs solar pump.png
Year Diesel Solar
0 $34.970 $80.000
1 $50.021 $83.200
2 $63.340 $86.032
3 $75.126 $88.538
4 $85.557 $90.756
5 $94.788 $92.718
6 $102.957 $94.455
7 $110.186 $95.992
8 $116.583 $97.352
9 $122.245 $98.556
10 $127.255 $99.621
11 $131.689 $100.564
12 $135.612 $101.398
13 $139.085 $102.136
14 $142.157 $102.790
15 $144.877 $103.368
16 $147.283 $103.880
17 $149.413 $104.332
18 $151.297 $104.733
19 $152.965 $105.088
20 $154.441 $105.402
21 $155.747 $105.679
22 $156.903 $105.925
23 $157.926 $106.142
24 $158.831 $106.335
25 $159.632 $106.505

Financing schemes for the end consumers