Milton Geiger
B-1289.2
August 2016
Part 2:
when and where
do they pay?
Solar-powered Water Pumping Systems for Livestock
Issued in furtherance of extension work, acts of May 8 and June 30, 1914, in cooperation with the U.S. Department of Agriculture. Glen Whipple, director, University of Wyoming Extension, University of Wyoming, Laramie, Wyoming 82071.
Persons seeking admission, employment, or access to programs of the University of Wyoming shall be considered without regard to race, color, religion, sex, national origin, disability, age, political belief, veteran status, sexual orientation, and marital or familial status. Persons with disabilities who require alternative means for communication or program information (Braille, large print, audiotape, etc.) should contact their local UW Extension office. To file a complaint, write to the UW Employment Practices/Affirmative Action Office, University of Wyoming, Department 3434, 1000 E. University Avenue, Laramie, WY 82071.
solar-powered water-pumping systems for livestock
Part 2: where and when do they pay?
Editor: Steve Miller, College of Agriculture and Natural Resources, Office of Communications and Technology.
Graphic Designer: Tana Stith, College of Agriculture and Natural Resources, Office of Communications and Technology.
Cover Photo: James Blackburn, images.nrel.gov, image 09326.jpg
©2016 B-1289.2 by Milton Geiger made available under a Creative Commons Attribution Non-Commercial 4.0 license (international)
Solar-Powered Water-Pumping Systems for Livestock, Part 2: Where and When Do They Pay? is a peer-reviewed publication.
Original available at: www.wyoextension.org/publications/pubs/b1289_2.pdf
Suggested acknowledgment: Geiger, Milton. Solar-Powered Water-Pumping Systems for Livestock, Part 2: Where and When Do They Pay? B-1289.2. 2016.
Permission is granted to share, copy, and redistribute the material in any medium or format and adapt, remix, transform, and build upon the material for any purpose other than commercial, under the following terms:
Attribution — You must give appropriate credit, provide a link to the license, and indicate if changes were made. You may do so in any reasonable manner but not in any way that suggests the licensor endorses you or your use.
when and where do they pay? | 1
Ranchers and small-acreage owners must deliver dependable pumped water to livestock when surface water is unavailable. What is the most cost-effective way to provide this water? Utility-sourced electricity, generators, and solar powered water pumping systems (SPWPS) can each be cost-effective in different situations. Using the information about costs and performance from Part 1: Overview and Costs, we explore a theoretical installation in Kaycee, WY, to compare these three options. The scenarios offer rules of thumb for quick determination of which options merit thorough evaluation for a particular situation.
As emphasized in Part 1: Overview and Costs, the analysis is very site-specific. If you disagree with the assumptions used in the following assessment, you can access the UW Extension spreadsheet used for the calculations (see Additional Resources at the end of the bulletin). The assessments are not universally applicable. As any honest economist will tell you – “It depends on…”
Our theoretical install in Kaycee
For our analysis, we consider an example system in Kaycee. The quality of the solar resource matters, as the same system in Laramie would have better production and a system in Afton would provide less output. Figure 1 shows the amount of solar energy available in Kaycee for an installation tilted at latitude (44°) and facing true south.
The core scenario is an attempt to explore a typical livestock water pumping application. Our Kaycee installation is a seasonal system, used for 120 days in the summer. The well previously used a temperamental mechanical windmill one-half mile from utility power. Electricity at the well costs the average energy and facility charge rates of Wyoming rural electric associations. The total dynamic head is 120 feet. Approximately 100 cow-calf pairs graze the pasture, requiring 3,000 gallons per day (gpd) in the summer. Less water is required (2,000 gpd) if the pasture is used in the winter. Tables 1-6 provide details to the system cost assumptions described in Part 1: Overview and Costs.
Table 1: The required system parameters for costing SPWPS
Figure 1: Annual solar resource by month for Kaycee, WY (43.7097° N, 106.6386° W)
Table 2: Energy required to pump water
Table 2 uses the USDA Natural Resources Conservation Service’s Solar-Wind Water Pumping Energy Self-Assessment Tool to calculate the amount of energy needed. The formulas for estimating energy required to deliver water are well defined, but the NRCS tool simplifies calculation. The system size required is the minimum amount (with 25 percent contingency) to supply the necessary energy over a three-day average period. New Mexico State University Cooperative Extension Service’s Solar Water Pumping Design Spreadsheet Version II provides a useful tool to estimate this need. Fuel usage assumes 1 gallon of gasoline produces 7.32 kWh of electricity, which includes generator efficiency losses.
Table 3 summarizes the fixed cost for the theoretical Kaycee installation. Importantly, the PV panels and wiring are assumed to cost $1.50/watt. Also, the cost of a utility line extension is expected to be $20,000 per mile, although this value can vary widely based upon terrain and circumstance.
when and where do they pay? | 2
Table 4 summarizes the characteristics that influence variable and fixed costs. Important factors, such as driving distance and labor input, significantly affect system costs.
The variable costs, found in Table 5, heavily influence the ongoing operations and maintenance expense associated with pumping water for livestock.
The suggested gasoline and diesel prices are the five-year national average. The recommended rates for utility-sourced are the average for the 16 rural electric associations that serve Wyoming. Maintenance costs are admittedly subjective estimates based upon producer reports.
Table 3: Equipment and installation costs for SPWPS, utility-sourced, and generator water pumping systems
when and where do they pay? | 3
Table 4: System characteristics informing operating costs for the Kaycee example
Table 5: Variable costs for SPWPS, utility-sourced, and generator systems
Table 6: Discount, inflation, real energy escalation, and tax rates
The discount rate is a relatively conservative assessment of the cost to borrow funds (e.g., Farm Credit Service). The inflation rate is a five-year average. The U.S. Energy Information Administration predictions through 2025 are the basis for the estimated real energy escalation rate. The tax rate is a median tax rate for a middle-class agricultural producer. The values could certainly be altered to reflect individual preferences and expectations.
The information in Tables 1-3 lead to an initial system cost of:
These values serve as the foundation for specific scenarios where SPWPS, utility-sourced electricity, and generators are the most cost-effective option.
When comparing options, ranchers, and small-acreage owners will have different desired metrics for payback. Most will want the costs annualized. The core analysis annualizes costs using the equivalent annual cost (EAC) method, which allows comparison of alternatives with different lifespans. For example, some ranchers may want costs considered over seven years, which approximates the life of a generator. Thus, the lifespan of a utility connection or solar array does not matter beyond seven years.
SPWPS have a growing presence on the ranch
SPWPS are supplanting incumbent methods for pumping water and opening up new opportunities for delivering water in remote locations. For the example described above, SPWPS is the most cost-effective option, despite having a higher initial installed cost than a generator. Figure 2 shows the EAC for each system based upon the information in Tables 1-6.
when and where do they pay? | 4
Figure 2: Equivalent Annual Cost for Kaycee example
* “Solar w/ TC” describes SPWPS using the Business Investment Tax Credit
The EAC values show that SPWPS, even without incentives, are the most cost-effective systems to pump water for our Kaycee example. Since the costs are annualized, we are able to compare the systems despite their different lifespans. The high initial cost and ongoing utility charges make the line extension cost prohibitive. The high operational costs of generators make them a very expensive method to use in this scenario.
This type of analysis opens up many “What if…” questions. To pick a few:
The core analysis and the “What ifs” show that, in this application, SPWPS is likely the preferred option to provide water in this pasture.
when and where do they pay? | 5
Figure 3: Comparing water pumping alternatives relative to the distance from utility-sourced electricity.
when and where do they pay? | 6
When utility-sourced electricity is a winner
Connecting to the electric utility provides highly reliable, low-cost, relatively maintenance-free energy for water pumping systems. When available, utility-provided electricity is often considered the most cost-effective option. Still, connecting to the utility exposes producers and landowners to changes in energy prices and service fees. In this scenario, the same Kaycee ranch is exploring a theoretical installation, except this time:
As the distance to utility power is changed from the core example, Figure 3 shows the EAC plotted against distance.
The EAC at the power pole (no line extension) is $918 for utility-sourced systems while SPWPS is $992 ($937 with the BITC). A generator costs $2,028. Assuming linear costs for utility extensions (perhaps a simplified assumption), then utility-sourced electricity is more cost-effective than unsubsidized solar if the line extension costs less than $1,348, which is approximately 1/16 of a mile. If solar receives the BITC (no other incentives), then the line extension must cost less than $346, which is approximately 91 feet. As no line extension is required in this scenario, this Kaycee rancher should connect to the
local electric utility to deliver energy to pump water.
Many “What ifs” can also be examined in this scenario, including:
Utility-supplied electricity is a cost-effective option when immediately available from the power pole, especially if no additional meters (new fixed charges) are needed (e.g., at a barn or other electrical load). Still, SPWPS is a close competitor. Thus, SPWPS should be considered any time a line extension. The declining cost of PV may make SPWPS cost-effective even when utility-supplied power is being considered.
When generators are best
As shown in Figures 2 and 3, generators are clearly an expensive method to pump water for livestock. Still, applications exist where generators are a cost-effective alternative. The same Kaycee ranch now explores a scenario where:
Using these rather specific assumptions, the EAC values in Figure 4 show that a generator is the most cost-effective water pumping option.
The EAC is $536 for a generator vs. $659 SPWPS and $1052 for new utility service. In this scenario, the very short duration of use and brief travel times limit the effects of high operation costs (e.g., labor, travel, and maintenance).
The “What ifs” for pumping water with generators includes:
Figure 4: Equivalent Annual Cost for Kaycee example with generator-favoring assumptions
when and where do they pay? | 7
In sum, generators can provide a cost-effective option for a short duration, close-proximity water pumping situation. SPWPS or utility-sourced electricity is likely a better choice if you prefer a longer investment period (greater than seven years).
What critical factors would likely make SPWPS viable for my operation?
Through exploring the scenarios and exploring further nuances in the referenced spreadsheet, certain “rules-of-thumb” help identify when and where SPWPS is most likely to be viable. If your existing or planned well has these characteristics, SPWPS is certainly worth exploring:
1.Is your existing unpowered well over 1/16 of a mile from a power pole? – Extending utility lines is expensive. If your well will be a dead-end line (i.e., does not continue to another electric load), this line extension cost makes SPWPS attractive. Anytime a line extension is needed, SPWPS are likely a viable option.
2.Are you driving any distance to check a generator at an existing well? – The cost of time and mileage to check a generator makes these systems very expensive to operate compared to alternatives, including SPWPS.
3.Do you use shallow wells seasonally, especially in the summer grazing season? – If you have a shallow well (i.e., less than 120 feet) that is used seasonally, especially in the summer, then SPWPS have a greater likelihood of being cost-effective.
4.Does your electric utility have a fixed meter charge
when and where do they pay? | 8
higher than the $265 Wyoming average? – The fixed charge, especially if charged annually on a seasonal well, significantly increases the costs of utility-sourced electricity compared to SPWPS.
5.Are you willing to install your SPWPS? – The installation cost of the SPWPS (much greater than other alternatives) is a major factor in determining viability. If you are willing and able to safely install the SPWPS yourself or can reduce expenses in another fashion, then SPWPS are more likely to be cost-effective.
6.Does your AC pump at an existing well need replaced? – If an AC pump needs replacing, this cost can be subtracted from the net cost of the SPWPS, making the system relatively more affordable.
7.Are you able/willing to use incentives, including tax credits? – Your ability to use tax credits and deductions (i.e., a profitable agricultural operation or personal tax liability) makes SPWPS more affordable. Also, if you are willing to use USDA Natural Resources Conservation Service or Rural Development, conservation district, or electric utility incentives, then SPWPS are likely to be attractive.
8.Do you believe utility energy or fixed meter charges will escalate more rapidly than the nominal rate of 2.45 percent assumed in this analysis? – If you think energy will get drastically more expensive, then SPWPS present a viable hedge against these price increases.
9.Do you value renewable energy for other reasons, such as environmental or personal independence? – Personal preference for renewable energy can lower your required rate of return for SPWPS to be viable. A lower discount rate is one way to reflect personal preferences for future benefits.
Conclusion
For our core Kaycee pasture example, SPWPS are a viable alternative, especially when considering the cost of utility line extensions and the labor requirement for generator operation and maintenance. Specific scenarios exist where utility-sourced electricity and generators are the preferred energy sources, but SPWPS are now cost-effective in many, if not most, livestock water pumping applications. As the cost of PV equipment and DC pumps continues
to decrease, and the cost of utility-sourced electricity increases, SPWPS are likely to become the default option for livestock water pumping, even supplanting some existing utility connections.
UW Extension will gladly aid agricultural producers and small-acreage owners in determining their most cost-effective livestock watering system. Please feel free to contact your local UW Extension office to discuss your individual situation.
Additional resources:
Solar-powered Water Pumping Systems for Livestock: Where and when do they pay? Spreadsheet and calculations are available from: www.INSERT
Jenkins, Thomas. Solar Water Pumping Design Spreadsheet Version II: User Manual. New Mexico State University Cooperative Extension Service Circular 671. 2012. Available from: http://aces.nmsu.edu/pubs/_circulars/CR671.pdf
when and where do they pay? | 9
Jenkins, Thomas. Solar Water Pumping Systems for Livestock. New Mexico State University Cooperative Extension Service Circular 670. 2014. Available from: http://aces.nmsu.edu/pubs/_circulars/CR670.pdf
United States Department of Agriculture Natural Resources Conservation Service. Design of Small Photovoltaic (PV) Solar Powered Water Pump Systems. Technical Note No. 28. 2010. Available from: http://www.nrcs.usda.gov/Internet/FSE_DOCUMENTS/nrcs142p2_046471.pdf
United States Department of Agriculture Natural Resources Conservation Service. Solar-Wind Water Pumping Energy Self-Assessment. Online tool. Accessed June 4, 2015. Available from: http://www.ruralenergy.wisc.edu/renewable/water_pump/default_water_pump.aspx
Van Pelt, R., C. Weiner, and R. Waskom. Solar-powered Groundwater Pumping Systems. Colorado State University Extension. No. 6.705. 2012. Available from: http://www.ext.colostate.edu/pubs/natres/06705.html