Economic Analysis

Hugel Bed Economics

  • To meet initial criteria set, all solution suggestions must remain less than 10% of the yearly revenue of winery
  • Based upon labor estimates from advisor, hugelkultur beds will cost approx. $10,500, or about $11 per bed (Table 2)

Table 2: Economic Analysis for total hugel bed cost of labor

Hugelkultur Bed Economic Analysis

Solution Economics

  • Two other mitigation solutions were implemented: 40 kWh solar panel grid, and eco-glass wine bottles (vs. conventional glass bottles) (Table 3)
    • Solar panel grid is approx. $60,000 to purchase and install
    • Eco-glass costs $0.15 more per bottle compared to conventional glass bottles
  • Income of the winery was approximated to be $40 per bottle (price anticipated by advisor), and one acre of wine grapes produces around 2,000 bottles per acre
    • From these givens, we estimated at full function (6 acres of wine grapes), the yearly revenue of the winery will be $480,000

Table 3: Economic Analysis with Improvements

Final Economic Breakdown

  • A yearly economic analysis breakdown was constructed to determine net present value of all solutions, and its equivalent annuity (Table 4)
    • Net Present Value of all solutions is about -$63,000
    • Equivalent annuity is approx. -$5,000
  • Calculated equivalent annuity is less than 2% of the yearly revenue accrued by the winery

Table 4: Year to Year Economic Breakdown of revenues, with solution costs

Economic Analysis - Breakdown
  • Once all six acres of vine blocks are developed and growing grapes, additional cost per year of mitigation solutions is ~$1,000
    • The graphic below (Fig. 8) shows the economic impact of our designed solutions
  • Environmental solutions do not add a large amount of costs compared to the yearly revenue, while also allowing the winery to have the distinct designation that no Greenhouse Gases were released to produce the bottle of wine.

Fig. 8: Yearly Economic breakdown with solutions