Step 5: Proposed Actions

Good ideas can provide significant benefits. Where appropriate, take action.

A simple Method for Calculating payback period.

Should you wish to install equipment to help you save water e.g for re-using, then the equipment will cost you money. Will the savings in water charges cover the cost of the equipment?

Payback period (years) = Cost of installation / Annual estimated savings

Example

If the cost of equipment (e.g. tank and water pump) installed to collect used water from the plate cooler in the dairy for recycling, is estimated at €2,500 and the annual estimated savings in water charges is €1,500.

Payback Period (Years) = €2,500 / €1,500 = 1.7 years

Hence, in this example it will take 1.7 years ( 19 months) to cover the project costs.

The calculation above is for example only and you must substitute your own figures. It will be necessary to include interest charges and running costs.