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

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Energy Rebates and EXAIR Products

In case it goes unnoticed, EXAIR focuses on engineered compressed air point of use products to ensure that our customers are utilizing their costly utility as efficiently as possible.  The main benefits to purchasing EXAIR products are the support you receive from us at EXAIR, the quality of the product, the savings in compressed air, and the increase in safety.  Another added benefit is a large number of utility companies are offering rebates on the purchase of engineered nozzles, just like the Super Air Nozzles that EXAIR offers.

Many energy providers offer these energy rebates for commercial or industrial users.  Here in the Cincinnati area, Duke Energy offers rebates on items such as lighting, air compressors, engineered air nozzles, heaters / dryers for extrusion machines, energy management systems, variable frequency drives, data center equipment, even food service equipment, custom incentives, and many other items.

Duke Energy Rebate
Example of our local energy rebate offering for Engineered Nozzles

For each engineered compressed air nozzle that is installed, in order to meet the rebate requirements they must flow less than or equal to given flow rates in SCFM at 80 psig inlet pressure. The pipe sizes, flow rates, and EXAIR equivalents are shown below.

EXAIR Engineered Air Nozzle Part Number EXAIR Flow Rate @ 80 psig
#1102/#1103 – 1/8 NPT 10 SCFM
#1100/#1101 – 1/4 NPT 14 SCFM
#1108SS-NPT/#1109SS-NPT/#1110SS-NPT
All are 1/8 NPT
2.5, 4.9, 8.3 SCFM
respectively
#1003 – 3/8 NPT 18 SCFM

By just replacing the nozzles the customer saved 2.7 SCFM per nozzle.If we take an example such as the EXAIR Case Study  shown below for 1/4″ copper tube that was being used as an open ended blow off.  The copper tubes were consuming 19.6 SCFM at 100 psig inlet pressure, there were 10 machines with one line per machine operating 40 hours, 52 weeks per year.   The customer retrofitted the open pipes with a model 1100 Super air nozzle and was able to reduce the air consumption by 2.7 SCFM per nozzle.  If they were to purchase these nozzles this year, current list price for a model 1100 Super Air Nozzle is $36.00 USD, then apply for the energy rebate offered by Duke Energy and receive $20.00 per nozzle replaced.  The total savings and return on investment is shown below.

Case Study 1561
EXAIR Model 1100 Super Air Nozzle Replaces Open Copper Pipe Blow Off

10 nozzles x 2.7 SCFM = 27 SCFM  x 60 minutes per hour x 8 hours per day x 5 days per week x 52 weeks per year = 3,369,600 SCF of compressed air saved per year.

3,369,600 / 1,000 SCF x $.25 = $842.40 USD savings in compressed air per year.

Cost Savings per week = $16.20 USD

Total purchase cost is  $36.00 x 10 nozzles = $360.00 USD

Energy Rebate = @20.00 per nozzle x 10 nozzles  = $200.00 USD in rebates.

$360.00 USD purchase price – $200.00 USD energy rebate = $160.00 USD final purchase cost.

Return on investment at a savings of  $16.20 USD per week is

$160.00 / $16.20 = Less than 10 weeks pay back!

By applying for the energy rebate this customer could reduce the ROI of this air savings project from just over 22 weeks (which is still very good) to less than 10 weeks.

If you would like to learn more about whether there are Industrial energy rebates available in your area, contact an Application Engineer and let us know where you are located and who your energy provider is.

We will help you determine the correct engineered solution to save your compressed air as well as help you to apply for eligible energy rebates in your area.

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

 

EXAIR Receives Honorable Mention in Green Manufacturer Product Innovation Award

EXAIR’s model 1126, 1″ Flat Super Air Nozzle received an honorable mention from Green Manufacturer magazine for the 2013 Product Innovation Awards. This competition was open to technology developers and manufacturers who have introduced new products designed to ensure environmental sustainability between January 1, 2012 and April 1, 2013. Green Manufacturer magazine includes a diverse range of products from biological building materials to welding tools, each with a unique set of qualifications and applications.

The competition focuses on the greenness of the product and how sustainably it is manufactured, as well as the ecopractices of the company. The claims were verified through judging which relied on third party testing and certification, reports to published databases, provision of specific metrics/quantitative information, and customer testimonials with quantitative data.

IMG_3206
The award with the 1″ Flat Super Air Nozzles and shims

Our engineered air nozzles, when compared to open blow off or traditional commercial nozzle designs, reduce compressed air consumption and the associated costs of producing compressed air. The lower compressed air volume required from EXAIR’s engineered air nozzles results in less electricity to generate the compressed air. Engineered air nozzles also reduce noise pollution better than traditional solutions and reduce noise exposure levels for personnel.

The model #1126, 1″ Flat Super Air Nozzle is available in a zinc/aluminum alloy suitable for most environments or 316 stainless steel when a higher level of corrosion resistance is necessary. The zinc/aluminum alloy used for this nozzle generally requires less energy
than similar materials to transform into finished products, release no pollutants and no toxic residues during the work cycle, and are fully recyclable at the end of their useful lives.

EXAIR’s whole line of Flat Super Air Nozzles also utilize an internal shim which restricts large amounts of compressed use. The design entrains additional surrounding air in order to provide added volume and force for each application.

EXAIR also takes responsibility for our own processes and manufacturing facility by adhering to our own sustainability plan. This plan helps us reduce waste, recycle more material, reduce energy consumption, reduce water consumption, and keep our employees informed and responsible.

Thanks to Green Manufacturer magazine for recognizing our efforts to keep energy consumption low and sustainability high.

Kirk Edwards
Application Engineer
kirkedwards@exair.com

 

Summer Time = Vacation Time

I personally can’t believe I’m saying this but summertime is almost here.  With that comes vacations or the increasingly popular “Staycations”.  For myself I get to see a good friend from college get married as my vacation this year.   It will be the first time my wife and I have left our daughter for more than just one night.  With the vacation of course came a good amount of planning, both at home and at work.

At home we got lucky because our parents are going to take turns watching our daughter, house, and dogs.  (Can’t beat free baby/house/dog sitting.)  They’ll of course be eating it up because they get to spend so much time with their grand-daughter and getting to completely spoil her for several days.  For most people when they go on vacation they have to prepare the house for no one to be there during their vacation.  A few points we make sure to cover in the case no one will be home is to turn off the water at the main shut off, set the thermostat for around 80° F so the A/C isn’t running that much, get rid of as much food from the fridge as possible so there isn’t a loss in the case of a power outage.   We also stop the mail and the paper, and lastly we set a few lights to turn on and off so it still appears someone is home, this can be done through timers or trusted neighbors, which is what we use.  This makes sure that you aren’t wasting energy while you are gone and when you come back home everything is ready to go back to normal or in our case as close to normal it can get.

At work I have a similar checklist.  Make sure all my emails are taken care of that need to be, ensure the e-mail and voicemail messages are set correctly, clean the desk up, and make sure to log out of the computer so there is a lower risk of shenanigans involving my background image or desktop icons.  This makes sure than when I get back to the office I’m not spending time and energy trying to get to the point of caught up and working on new projects.

Preparing to leave for vacation is something you can very easily translate into how to prepare your compressed air system before you leave for a few days or even before you go home for the night.  You probably shut your compressor down so you can save money on your energy bill, the problem is if you don’t have a well maintained system you won’t have that stored air available when you come back.  If your system has leaks or if you are leaving a blow off on continuously even when the process is not needed then when you come in the next day or after a few days away the air isn’t there and you have to wait for the compressor to build up an initial charge to even begin work.  This not only causes additional work load on your compressor but it is down time that is easily avoidable.  With the help of our Six Steps to Compressed Air Optimization you can make sure you still have air in the storage tank when you get in on Monday rather than having to wait for the compressor.

So whether you are going on a vacation or just leaving for the day make sure you are doing everything you can to conserve, turn off those lights, seal up the leaks, and it will make the next time you come in that much easier.  Not to mention the savings you will see.

Brian Farno
Application Engineer
BrianFarno@EXAIR.com
Twitter: @EXAIR_BF