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What would the hydro return on investment be?

The table below shows what the Internal Rate of Return (IRR) would be for a range of small hydro and micro hydro systems.  The hydro return on investment shown are realistic for viable sites – note that the actual hydro return on investment could be better or worse depending on various site-specific factors. It is assumed that no energy is used onsite.

Hydro Return on Investment
Maximum Power Output Internal Rate of Return (IRR) New Build Internal Rate of Return (IRR) Existing Site, No Civils
25 kW 2% 6%
50 kW 4% 9%
100 kW 6% 11%
250 kW 8% 14%
500 kW 11% 18%

If generated energy can be used onsite the rate of return can be significantly increased. For example, if all energy generated can be used onsite then the following Internal Rate of Return may be acheived:

Hydro Return on Investment
Maximum Power Output Internal Rate of Return (IRR) New Build Internal Rate of Return (IRR) Existing Site, No Civils
25 kW 7% 13%
50 kW 9% 16%
100 kW 11% 19%
250 kW 15% 24%
500 kW 18% 29%

IRR’s calculated based the Feed in Tariff rates as of the last page update on 11th November 2016.

The IRR is calculated over 20 years, though provided good quality hardware is used the design life for a hydropower system is at least 40 years. Options are given for new build projects including civils works and for existing sites with no civils works.

It is worth mentioning that sometimes intangible benefits can be worth a lot, for example at sites frequented by tourists a small hydro or micro hydro system can add a lot of additional interest as a visitor attraction and in other cases the marketing benefit to a company from being able to say that their energy is generated on site from zero emission hydropower can be significant.

The best sites are generally larger (100 kW+), with higher heads, easy to adapt infrastructure, easy access and a good grid connection.

 

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Are you considering a hydropower project in the UK, Ireland or overseas?

Renewables First have considerable experience and full project capability, from initial feasibility study through to system design and installation.

The first step to develop any small or micro hydropower site is to conduct a full feasibility study.

Contact us about a feasibility study today!

Once complete, you will understand the site potential and be guided through the next steps to develop your project. You can read more about hydropower in our Hydro Learning Centre.

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