by bobbi
20. October 2008 16:52
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I put together a range of potential payback periods for a person who is interested in using Corn to heat his home.
This customer is paying $1.69 gallon for propane, which is pretty reasonable. He will fill up his propane tank 3 - 4 times a year and spend $400 - $500 per fill. I estimated a low range and a high range based on a corn price of $5.00 bushel. I understand this to be true, if you buy corn in the fall, it can be purchased for $3.50 a bushel.
First, let's take corn at 3.50 bushel, which I understand is what we could get it for in the fall.
Cost per Million BTU "Useable Heat"
LP gallon 92,000 75% $ $24.49
Corn bushel 381,248 60% $ $15.30
At those prices, corn costs 62% of what propane costs.
If you fill up 3 times a year, and spend 400.00 for each fill - that will be 1200.00. 1200*.38 - providing 456.00
If you fill up 4 times a year and spend 500.00 for each fill that will be 2000.00. 2000*.38 - 760.00
That translates to a 8.5 year payback period.
Second, let's consider what the corn will cost if you buy it in January:
Cost per Million BTU "Useable Heat"
LP gallon 92,000 75% $ $24.49
Corn bushel 381,248 60% $ $21.86
At those prices, corn costs 89% of what propane costs. So I will take 11% of the yearly bill and take it off the cost of the corn stove.
If you fill up 3 times a year, and spend 400.00 for each fill - that will be 1200.00. 1200*.11 - providing 132.00
If you fill up 4 times a year and spend 500.00 for each fill that will be 2000.00. 2000*.11 - 220.00
That translates to a 29 year payback period. (Not so inviting, I know)
There are other reasons to heat with corn. Reasons such as
- Independence from foreign oil
- Renewable source of fuel
- The enhanced comfort that emanates from this source of heat
I hope that helped. Let me know if I can answer any more questions for you.