ROI – Return on Investment

Return on Investment (ROI) is a measure of the gain (preferably) or loss generated relative to the amount of money that was invested.  ROI is typically expressed as a percentage and is generally used for personal financial decisions, examining the profitability of a company, or comparing different investments.  It can also be used to evaluate a project or process improvement to decide whether spending money on a project makes sense.  The formula is shown below-

ROI

  • A negative ROI says the project would result in an overall loss of money
  • An ROI at zero is neither a loss or gain scenario
  • A positive ROI is a beneficial result, and the larger the value the greater the gain

Gain from investment could include many factors, such as energy savings, reduced scrap savings, cost per part due to increased throughput savings, and many more.  It is important to analyze the full impact and to truly understand all of the savings that can be realized.

Cost of investment also could have many factors, including the capital cost, installation costs, downtime cost for installation, and others.  The same care should be taken to fully capture the cost of the investment.

Example – installing a Super Air Nozzles (14 SCFM compressed air consumption) in place of 1/4″ open pipe (33 SCFM of air consumption consumption) .  Using the Cost Savings Calculator on the EXAIR website, model 1100 nozzle will save $1,710 in energy costs. The model 1100 nozzle costs $37, assuming a $5 compression fitting and $50 in labor to install, the result is a Cost of Investment of $92.00. The ROI calculation for Year 1 is-

ROI2

ROI = 1,759% – a very large and positive value.  Payback time is only 13 working days.

Armed with the knowledge of a high ROI, it should be easier to get projects approved and funded.  Not proceeding with the project costs more than implementing it.

If you have questions regarding ROI and need help in determining the gain and cost from invest values for a project that includes an EXAIR Intelligent Compressed Air® Product, feel free to contact EXAIR and myself or one of our Application Engineers can help you determine the best solution.

Brian Bergmann
Application Engineer

Send me an email
Find us on the Web 
Like us on Facebook
Twitter: @EXAIR_BB

Many Ways to $ave on Compressed Air Costs

Using compressed air in the plant is common for many types of processes.  Typical uses are drying, cooling, cleaning and conveying. Compressed air does have a cost to consider, and there are many ways to keep the usage and the costs as low as possible.  The first step is to use an EXAIR Intelligent Compressed Air Product, which has been engineered to provide the most performance while using the least amount of compressed air. The next step is to control the use of the air, to only have it on when needed.

EXAIR offers the EFC – Electronic Flow Control.  It offers the most comprehensive method to maximize the efficiency of compressed air usage.  It combines a photoelectric sensor with a timing control that operates a solenoid valve to turn on and off the air as required. With 8 different program types, an on/off mode that works with any process can be programmed ensuring that the minimum amount of compressed air is used.  You can use the online EFC Savings Calculator to see how quickly the savings add up!

EFCp4

EFC – Electronic Flow Control

Another method would be to use a solenoid valve with some other method of control. Depending on the process, the solenoid could be energized via a machine control output, or as simple as an electrical push button station. EXAIR offers solenoid valves in a variety of flow rates (from 40 to 350 SCFM) and voltages (24 VDC, 120 VAC and 240 VAC) to match the air flow requirements of the products we provide, while integrating into the facility and available supply voltages.

For control of the Cabinet Cooler Systems, the ETC – Electronic Temperature Control, uses a thermocouple to measure cabinet temperature and cycle the system on and off to maintain a precise cabinet temperature, and provides a digital readout of the internal temperatures and on the fly adjustment.  Also available is the Thermostat Control models, which utilize an adjustable bimetallic thermostat to control the solenoid valve, also cycling the unit on and off as needed to maintain a set cabinet temperature.

ETC CC

ETC – Electronic Temperature Control

There are several manual methods that can be used to control the compressed air.  A simple valve can be used to turn the air off when not needed, whether at the end of the work day, at break time, or whenever the air isn’t required.  We offer several options, from a foot controlled valve, to a magnetic base with on/off valve, to a simple quarter turn ball valve.

footpedalvalve (2)dualstand (2) manual_valves (2)

 

To discuss your processes and how an EXAIR Intelligent Compressed Air Product can control the air supply and save you money, feel free to contact EXAIR and myself or one of our other Application Engineers can help you determine the best solution.

Brian Bergmann
Application Engineer

Send me an email
Find us on the Web
Like us on Facebook
Twitter: @EXAIR_BB

 

 

Calculating Compressed Air Cost & Savings Made Easy

If you have ever looked through our catalog, website, blog, twitter feeds, or even our Facebook page, you will see that we can almost always put a dollar amount behind the amount of compressed air you saved by installing EXAIR’s Intelligent Compressed Air Products.   No matter which platform we use to deliver the message, we use the same value for the cost of compressed air which is $.25 per 1,000 Standard Cubic Feet of compressed air. This value is derived from average commercial and industrial energy costs nationwide, if you are on either coast this value may increase slightly. On the positive side, if your cost for compressed air is a bit more, installing an EXAIR product will increase your savings.

So where does this number come from?   I can tell you this much, we didn’t let the marketing department or anyone in Accounting make it up.   This is a number that the Engineering department has deemed feasible and is accurate.

To calculate the amount we first look to what the cost per kilowatt hour is you pay for energy.  Then we will need to know what the compressor shaft horsepower  of the compressor is, plus the run time percentage, the percentage at full-load, and the motor efficiency.

If you don’t have all of these values, no worries.   We can get fairly close by using the industry accepted standard mentioned above, or use some other general standards if all you know is the cost of your electricity.

The way to calculate the cost of compressed air is not an intense mathematical equation like you might think.  The best part is, you don’t even have to worry about doing any of the math shown below because you can contact us and we can work through it for you.

If you prefer to have us compare your current compressed air blow off or application method to one of our engineered products, we can do that AND provide you a report which includes side by side performance comparisons (volume of flow, noise, force) and dollar savings. This refers to our free Efficiency Lab service.

EXAIR's Efficiency Lab is a free service to all US customers.

EXAIR’s Efficiency Lab is a free service to all US customers.

If you already know how much air you are using, you can use the Air Savings Calculators (USD or Euro) within our website’s knowledge base. Just plug in the numbers (EXAIR product data is found on our website or just contact us) and receive air savings per minute, hour, day and year. We also present a simple ROI payback time in days.

Now, back to the math behind our calculation.
Cost ($) =
(bhp) x (0.746) x (#of operating hours) x ($/kWh) x (% time) x ( % full load bhp)
——————————————————————————————————————————
Motor Efficiency

Where:
bhp
— Compressor shaft horsepower (generally higher than motor nameplate Hp)
0.746 – conversion between hp and KW
Percent Time — percentage of time running at this operating level
Percent full-load bhp — bhp as percentage of full load bhp at this operating level
Motor Efficiency — motor efficiency at this operating level

For an average facility here in the Midwest $0.25/1,000 SCF of compressed air is accurate.   If you would like to attempt the calculation and or share with us your findings, please reach out to us.   If you need help, we are happy to assist.

Brian Farno
Application Engineer Manager
BrianFarno@EXAIR.com
@EXAIR_BF

 

EXAIR.com offers Numerous Engineering Tools

Today, I want to take the opportunity to highlight some features on EXAIR’s website. EXAIR provides a website for technical information on products, point of sale and research on compressed air topics in general. For instance, if you would like to know, How a Vortex Tube Works, the Droplet Size of our Atomizing Spray Nozzles, or a Blow Off Comparison between a compressed air powered air knife and blower system, follow the links above and navigate to the topic that interests you on our website.

 

Our Air Savings Calculator will show you total dollars saved and payback time.

Our Air Savings Calculator will show you total dollars saved and payback time.

Our knowledge base features the CAD Library, Case Study Library, and Application Database. The Air Data Library is invaluable to any engineer specifying a compressed air piping system. It also features a great article for calculating air consumption at various inlet pressure. One of my favorite features though is the Air Savings Calculator.

The Air Savings Calculator allows you to calculate the cost of compressed air for various devices.  The cost of compressed air for high usage device like open blow offs, drilled pipes and uncontrolled compressed air devices can add up quickly. With the air savings calculator, you can quickly find out how much those (8) 1/16″ inner diameter 18″ long open pipes are costing you per year ($2,016 if you are operating at 80 PSIG).

Some of the material that we make available to our visitors we request that you register on the site. The registration is a simple process to complete. Why would you want to take the time to give us you information? First, registering on EXAIR’s site gives access to our library of product applications for the last thirty years EXAIR has tracked how our products have been used to help our customers solve their industrial needs. Second, EXAIR members are granted access to CAD models in 2D and 3D of our products. The 3D models can easily import into AutoCAD Inventor®, Solidworks®, or PRO Engineer®. These models will allow you to easily import EXAIR products into your design to verify the fit and mounting in complex systems. Third, EXAIR Case Study library offers detailed analysis of economics, safety, and utility savings of using EXAIR products.

Dave Woerner
Application Engineer
@EXAIR_DW
DaveWoerner@EXAIR.com

 

Combat Rising Energy Costs

It has been a long cold winter this year and I just got my utility bill in the mail. I almost fainted. Sad to say, I’m told that I should expect rising utility costs due to the increased cost of producing electricity.

Rising utility costs has a trickle down effect and no one is exempt. Manufacturers, retailers, farmers, food service, etc. all share the same duress. As the cost to do business increases, prices go up. It’s almost like I’m taking the hit twice.

A recent survey by the U.S. Department of Energy showed that for a typical industrial facility, approximately 10% of the electricity consumed is for generating compressed air. For some facilities, compressed air generation may account for 30% or more of the electricity consumed. Compressed air is an on-site generated utility. Very often, the cost of generation is not known; however, some companies use a value of 18-30 cents per 1,000 cubic feet of air.(ref. DOE)

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With that being said, EXAIR is your partner in compressed air energy savings. Our products are designed to use less compressed air for blow off, cooling, and non contact motion control. It is as simple as finding the leaks and making the repairs, controlling the air use, and upgrading to efficient engineered blow offs. Request your copy of our blow off guide [link]

Joe Panfalone
Application Engineer
Phone (513) 671-3322
Fax (513) 671-3363
Web: www.exair.com
Twitter: EXAIR_JP

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