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

Economic Feasibility and Sustainability of a Circular Economy of Cow Dung-Based Household Biogas in West Nusa Tenggara

Baiq Putri Eliza Salsabilla (Universitas Mataram)
Ihsan Ro'is (University of Mataram)
Muhamad Bai'ul Hak (University of Mataram)



Article Info

Publish Date
28 Sep 2026

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.

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Journal Info

Abbrev

alkharaj

Publisher

Subject

Economics, Econometrics & Finance

Description

Al-Kharaj, Journal of Islamic Economic and Business is peer-reviewed journal published by program studi ekonomi syariah , Institut Agama Islam Negeri (IAIN) Palopo. Al-Kharaj focus on the research of Islamic Economic and Business. The aims of this journal is to explore and develop economic related ...