Profitability and ROI Considerations
This document outlines a simplified approach for evaluating the economic viability of the WaterTread system.
The goal is not to provide exact financial forecasts, but to define reasonable cost boundaries based on energy production and electricity pricing.
Key Variables
The profitability of a WaterTread installation depends on the following primary variables:
- P = Average electrical power output (kW)
- H = Annual operating hours (hours/year)
- E = Annual energy production (kWh/year)
- Cₑ = Electricity price (€/kWh or $/kWh)
- R = Annual revenue from electricity (€/year or $/year)
- Cₛ = Total system cost (including installation)
- T = Target payback period (years)
Energy Production
Annual energy production is calculated as:
E = P × H
Example:
- Average power output: 1.5 kW
- Operating time: 6,000 hours/year
E = 1.5 × 6,000 = 9,000 kWh/year
Annual Revenue
Annual revenue from electricity generation:
R = E × Cₑ
Example electricity prices:
- Low: 0.05 €/kWh (industrial / wholesale)
- Medium: 0.15 €/kWh (typical grid price)
- High: 0.30 €/kWh (remote or off-grid)
Example (0.15 €/kWh):
R = 9,000 × 0.15 = 1,350 €/year
Cost Boundary Based on Payback Time
A simple and practical profitability rule:
Cₛ ≤ R × T
Where T is the acceptable payback period.
Typical target payback periods:
- Aggressive: 3–5 years
- Moderate: 6–10 years
- Conservative infrastructure: 10–15 years
Example (T = 8 years):
Cₛ ≤ 1,350 × 8 = 10,800 €
This means the fully installed system should cost no more than ~10,000–11,000 € to be economically attractive at this power level and electricity price.
Sensitivity to Power Output
Because revenue scales linearly with power:
- Doubling average power output doubles annual revenue
- Increasing effective blade area or flow velocity has a direct economic impact
- Distributed capture (multiple blades engaged simultaneously) is economically advantageous
Comparison to Other Small-Scale Hydro Systems
WaterTread targets applications where:
- Conventional turbines are inefficient or impractical
- Flow velocities are moderate but continuous
- Maintenance simplicity and debris tolerance are critical
In such environments, slightly lower peak efficiency may be acceptable if:
- Capital cost is low
- Reliability and uptime are high
- Installation is simple and modular
Economic Design Implications
To remain commercially viable:
- Structural materials should be low-cost and durable
- Passive control (cams, guides) reduces operational expenses
- Container-sized systems reduce transport and installation costs
- Modular design enables incremental scaling
Disclaimer
This document provides conceptual guidance only.
Actual profitability depends on site-specific conditions, regulatory environment, maintenance costs, and financing structure.
docs/efficiency.mddocs/hydrodynamics.mdCOMMERCIAL.md