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All Journal Al-Kharaj: Journal of Islamic Economic and Business
Muhamad Bai'ul Hak
University of Mataram
Economics, Econometrics & Finance

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Economic Feasibility and Sustainability of a Circular Economy of Cow Dung-Based Household Biogas in West Nusa Tenggara Baiq Putri Eliza Salsabilla; Ihsan Ro'is; Muhamad Bai'ul Hak
Al-Kharaj: Journal of Islamic Economic and Business Vol. 8 No. 3 (2026): All articles in this issue include authors from 3 countries of origin (Indonesi
Publisher : LP2M IAIN Palopo

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.24256/kharaj.v8i3.11879

Abstract

This study aims to analyze the economic feasibility of utilizing cow dung for household biogas and examine its contribution to the implementation of a circular economy and local resource-based economic development in West Nusa Tenggara Province. The study uses a quantitative approach with the Cost-Benefit Analysis (CBA) method through Net Present Value (NPV), Internal Rate of Return (IRR), Benefit-Cost Ratio (BCR), and Payback Period (PP) indicators, supported by empirical validation through limited interviews with household biogas users. The research data is a combination of secondary and primary data. The results show that the household biogas system is economically feasible with an NPV of Rp869,688, an IRR of 12.6%, a BCR of 1.09, and a Payback Period of 6.8 years. The main economic benefits come from savings in LPG use and the use of bio-slurry as organic fertilizer, which is supported by field validation results in the form of reduced household energy expenditure and low operational costs of the biogas system. From a circular economy perspective, the biogas system reflects a closed-loop system pattern through processing livestock waste into renewable energy and utilizing its residue as a productive input. These findings indicate that household biogas is not only feasible as a renewable energy investment, but also contributes to increasing the efficiency of local resource utilization, strengthening the energy security of rural communities, contributing to the efficiency of community expenditure, and supporting sustainable economic development in West Nusa Tenggara Province.
Co-Authors Baiq Putri Eliza Salsabilla Ihsan Ro'is