Economic sustainability of current operations
A baseline case was established for current operations with no changes or improvements (Table 4). Current operation of the system appears sustainable even though the CHP system is only being operated at only 57% of capacity and propane use has only been reduced by 30%. The NPV is positive, the SPP is less than the expected lifespan of the digester, and the IRR projects a positive, though modest, rate of return. The SPP of 12.1 years is similar to the value of 11 years reported by Martin (2004) although it is higher than the SPP of 6.3 years reported by Martin (2005). The IRR of 8.6% is low relative to the desired 17% used by Cheremisinoff et al. (2009) to screen projects that justify investment in relatively risky energy projects. The NPV and SPP values in Table 4 were calculated based on a 4% discount rate. If the discount rate were increased, the results would shift. For example, a 7% discount rate would yield a NPV for the baseline scenario of $313,295 and a 10% discount rate would yield a NPV of −$243,107. The benefit of using the IRR as an economic metric is that it is not dependent on selection of a discount rate.