Don’t Forget About Operating Cost: How To Calculate Return On Investment

If you have a stock portfolio, or even a retirement account, you’ve likely heard the term “return on investment.” It basically tells you how hard your money is working for you, and, the higher, the better.

The term is also used to determine the financial benefits associated with the use of more efficient products than you’re using right now:

  • The cost of operating industrial pumps, air compressors, and a variety of industrial rotating equipment, can be greatly reduced by using variable frequency drive systems that sense the demand and change the motor’s speed (and hence power consumption) accordingly.  These systems are not cheap, but the reduction in operating costs is often quite noticeable.
  • At home, installing energy efficient windows (spoiler alert: your builder probably used the cheapest ones he could find…mine sure did) or upgrading appliances & HVAC can cost a pretty penny, but you’ll also see your electric bill go down.

EXAIR Corporation has a worldwide reputation for providing highly efficient compressed air products for industry.  Our Engineering Department has a company-wide reputation for being data fanatics…which is key to allowing us to provide our customers with ample information to make the best choices to optimize your use of your compressed air.

It’s not hard at all to calculate your potential savings from the use of an engineered compressed air product, assuming you know how much air your current device is using.  If not, we can tell you if you can send it in for Efficiency Lab testing (free and fast; call me to find out more.)  Here’s an example for a VERY typical situation: replacing an open copper tube blow off with an EXAIR Super Air Nozzle:

  • A 1/4″ copper tube uses 33 SCFM @80psig
  • A Model 1100 Super Air Nozzle uses 14 SCFM @80psig

33 SCFM X 60 min/hour X 8 hours/day X 5 days/week X 52 weeks/year = 4,118,400 SCF

14 SCFM X 60 min/hour X 8 hours/day X 5 days/week X 52 weeks/year = 1,747,200 SCF

4,118,400 – 1,747,200 = 2,371,200 Standard Cubic Feet of compressed air savings

If you know your facility’s cost of compressed air generation, you can calculate the monetary savings.  If not, we can get a good estimate via a thumbrule used by the U.S. Department of Energy that says it typically costs $0.25 to generate 1,000 SCF of compressed air:

2,371,200 SCF X $0.25 ÷ 1,000 SCF = $592.80 annual monetary savings

In 2019, the cost of a Model 1100 Zinc Aluminum Super Air Nozzle is $41.00.  Daily savings (not counting weekends) is:

$592.80 ÷ 260 days (5 days/week X 52 weeks/year) = $2.28 daily savings

Meaning the payoff time for the $41.00 investment in the Model 1100 is:

$41.00 ÷ $2.28 = 17.9 days

Or…just over three weeks.  Now that I’ve shown you the math, I’d like to introduce you to the EXAIR Cost Savings Calculator.  Just enter the data, and it’ll check your math (because I know you’re going to do the math anyway, just like I would.)  It even does the ROI for you too.

Engineered solutions (like EXAIR Intelligent Compressed Air Products) are the efficient, quiet, and safe choice. Does the one on the right look familiar?  It’s literally the example I used for the above calculations.

If you’d like to find out more about how – and how fast – EXAIR Intelligent Compressed Air Products can pay off for you, give me a call.

Russ Bowman
Application Engineer
EXAIR Corporation
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