Understanding the Economics of a Water Piloting Program
An in-depth water piloting program can seem like a big expense. The results, however, can often save millions of dollars over time. When you look at the financial picture, the ROI is normally well worth the investment.
Before you invest in a pilot project, it makes sense to look at the financial plan to determine the economic feasibility of your investment.
The Financial Plan
While some piloting projects are regulatory-driven, others are seen as discretionary expenses. Regardless of the reason, you should do an economic evaluation prior to considering piloting.
Step One: Determine the Financial ROI
The first step is to think about what you are trying to test or improve and the financial implications.
Let’s say you are trying to improve the filtration rate.
In the 2018 edition of the Recommended Standards for Water Works ( aka “Ten States Standard”) it says: “The rate of filtration shall be determined through consideration of such factors as raw water quality, degree of pretreatment provided, filter media, water quality control parameters, competency of operation personnel, and other factors as required by the reviewing authority. Typical filtration rates are from 2 to 4 gpm/ft^2. In any case, the filter rate must be proposed and justified by the design engineer to the satisfaction of the reviewing authority prior to the preparation of the final plans and specifications.”
How much could you save if you increased your filtration rate to 4 to 6 gpm/sf? What if you could increase it from 4 to 8 gpm/sf? Filter loading rates are regulated and approved at the state level and piloting can be an important tool for increasing the loading rate at your facility.
You might be looking at using an alternative coagulant for a reduction in solids. Changing chemicals can result in a reduction of solid production which can save money for disposal costs. Additionally, you may want to evaluate an alternative treatment approach for TOC reduction to meet disinfection byproduct regulation. Each treatment approach has a financial element to it and piloting can help gather real life operational cost and compare it with actual TOC reduction.
What kind of savings will you get for enacting these types of changes?
Step Two: Build Your Pilot Budget
The next step is to build your piloting budget. At a minimum, your budget should include:
- Pilot Management
- Consumables (Media, Chemicals, etc.)
- Pilot Reporting
In any project, you will also want to evaluate the trade-off in labor vs. equipment vs. laboratory costs. For example, a higher level of automation and remote access may make the equipment more expensive — but could save in terms of labor costs.
Some water quality instrumentation, such as pH and Turbidity, can be added as online instruments quite affordably. Others online instruments like TOC or Nitrate can be very expensive, so you may find it less expensive to have a laboratory perform the sample for you rather than install the instruments.
Step Three: Determine ROI
The third and final step is to look at your potential savings over time versus the expense of undertaking a water piloting program.
Another thing to keep in mind as you do your calculations is that not every process improvement is going to net you the savings you think. A big advantage of piloting is also to recognize process changes that don’t get the results you want and not implement these changes on the full scale. This provides you with hard data that tells you a proposed change won’t work. This prevents you from doing an expensive full-scale implementation.
Make More Informed Decisions
Piloting empowers your team to make more informed decisions about your operations by comparing conventional and alternate treatment technologies.
After optimizing your existing treatment process, a piloting program gives you a way to experiment safely without having to worry about potentially hazardous effluent water getting into the public distribution system. The testing allows you to evaluate compliance with any local, national, or international regulatory standards and validate new treatment options before deploying them at scale.
A pilot program allows you to test variables to determine the best path forward and the implications of changes. This helps you establish design criteria for implementation and gives you confidence that you’ve made the right decisions from a technical and economic standpoint.
A financial plan can help you better communicate the needs for a pilot program to your stakeholders, especially when you need to get budget approval before proceeding. With the data in hand from the pilot program, you’ll be armed with the information you need to get further budget approval to enact the changes.
The data you get from a pilot program helps other stakeholders understand the value of deployment and the financial ramifications. Your managers and board members will be able to understand the ROI in more concrete terms than just a spreadsheet projection. It will also provide information you can use to do public demonstrations or to help gain public support for the plan.
Improve Operations, Quality, Compliance, and Save Money
Pilot testing can identify the process changes that can improve operations, quality, and compliance. Using this three-step method, you can evaluate the potential ROI to make a smart economic decision before committing.