Curtis Wilde, Jeff Johnson, James Bordovsky

1
The Effects of Relaxing Subsurface Drip
Irrigation (SDI) Design Uniformity Standards on
Returns on Investment and Net Present Values of
the Irrigation System

• Curtis Wilde, Jeff Johnson, James Bordovsky
• Texas Tech University and
• Texas Agricultural Experiment Station - Lubbock

Beltwide Cotton Conference New Orleans,
Louisiana January 9-12, 2007
2
Background

• Efficient in-season water application
• High water use efficiencies
• High initial cost to install
• Installation design uniformity standards
• Not to exceed Flow Variation of 20 (USDA NCRS)

3
Objective

• Apply NPV and ROI analysis to installation of SDI
  systems with varying design uniformities
• Can design uniformity standards be reduced to
  decrease the initial cost of the SDI system

4
Methods and Procedures

• Study looks at
• Returns on investment (ROI) and Net Present Value
  (NPV) for
• Two irrigation levels
• 1.0 BI Level (80 of the evapotranspiration
  demand of the crop)
• 0.6 BI Level (60 of the 1.0 BI Level)
• Three designs with different uniformities
• 5.0 Flow Variation
• 16.7 Flow Variation
• 37.1 Flow Variation

5
Methods and Procedures
P annual profits IC initial cost of the system
IC initial cost of the system ATCF after tax
cash flows for year i TV terminal value of the
system in year n n number of years considered
in the analysis
6
Methods and Procedures

• 7 year simulation analysis
• Cumulative Distribution Functions (CDFs) show the
  probability of a NPV occurring
• Allows the system designs to be ordered based on
  risk

7
SDI Designs
1.0FV5.0 Design layout 0.6FV5.0 Design layout
1.0FV16.7 1.0FV37.1 Design layout 0.6FV16.7
0.6FV37.1 Design layout
8
ROI Results for 1.0BI Level
9
ROI Results for 0.6BI Level
10
NPV Results for 1.0 BI Level
11
NPV Results for 0.6BI Level
12
CDF Results for 1.0BI Level
13
CDF Results for 0.6BI Level
14
CDF Results (cont.)

• Cost share programs (EQIP) increase NPVs

15
CDF Results for 1.0BI Level w/ EQIP
16
CDF Results for 1.0BI Level w/ EQIP
17
Conclusions

• SDI design uniformity standards could be relaxed
  under certain conditions to reduce the initial
  cost of installation
• When a lower irrigation level is used system
  uniformity can be decreased without an detriment
  to NPV
• At lower irrigation levels ROI and NPV could be
  greater for lower design uniformities

18
The Effects of Relaxing Subsurface Drip
Irrigation (SDI) Design Uniformity Standards on
Returns on Investment and Net Present Values of
the Irrigation System