## How to Calculate ROI (Return on Investment)

You may have asked…why should I switch over to an engineered compressed air product if my system already works? Or…How can your products be much different?

Manufacturing has always been an advocate for cost savings, where they even have job positions solely focused on cost savings. Return on Investment (ROI) is a metric they look toward to help make good decisions for cost savings.  The term is used to determine the financial benefits associated with the use of more efficient products or processes compared to what you are currently using. This is like looking at your homes heating costs and then changing out to energy efficient windows and better insulation. The upfront cost might be high but the amount of money you will save over time is worth it.

How is ROI calculated? It is very simple to calculate out the potential savings of using an EXAIR Intelligent Compressed Air® Product. We have easy to use calculators on our websites Resources where filling in a few blanks will result in an ROI when switching to a EXAIR product! Here they Are, Calculators.

I’ll go ahead and break down the simple ROI calculations for replacing open blow offs with an EXAIR Super Air Nozzle:

• ¼” Copper Pipe consumes 33 SCFM at 80 psig (denoted below as CP)
• A Model 1100 ¼” Super Air Nozzle can be used to replace and only uses 14 SCFM at 80 psig (denoted below as EP)

Calculation:

(CP air consumption) * (60 min/hr) * (8 hr/day) * (5 days/week) * (52 weeks/year) = SCF used per year for Copper Pipe

(33) * (60) * (8) * (5) * (52) = 4,118,400 SCF

(EP air consumption) * (60 min/hr) * (8 hr/day) * (5 days/week) * (52 weeks/year) = SCF used per year for EXAIR Product

(14) * (60) * (8) * (5) * (52) = 1,747,200 SCF

Air Savings:

SCF used per year for Copper Pipe – SCF used per year for EXAIR Product = SCF Savings

4,118,400 SCF – 1,747,200 SCF = 2,371,200 SCF in savings

If you know the facilities cost to generate 1,000 SCF of compressed air you can calculate out how much this will save. If not, you can use \$0.25 to generate 1,000 SCF which is the value used by the U.S. Department of Energy to estimate costs.

Yearly Savings:

(SCF Saved) * (Cost / 1000 SCF) = Yearly Savings

(2,371,200 SCF) * (\$0.25 / 1000 SCF) = \$592.80 annual Savings

With the simple investment of \$42 (as of date published) you can calculate out the time it will take to pay off the unit.

Time Until payoff:

(Yearly Savings) / (5 days/week * 52 weeks/year) = Daily Savings

(\$592.80/year) / (5 days/week * 52 weeks/year) = \$2.28 per day

(Cost of EXAIR Unit) / (Daily Savings) = Days until product has been paid off

(\$42) / (\$2.28/day) = 17.9 days

As you can see it doesn’t have to take long for the nozzle to pay for itself, and then continue to contribute toward your bottom line.

If you have any questions about compressed air systems or want more information on any of EXAIR’s products, give us a call, we have a team of Application Engineers ready to answer your questions and recommend a solution for your applications.

Jordan Shouse
Application Engineer

Send me an Email
Find us on the Web

Hand Holding money Image from Pictures of Money Creative Commons license

## The Impressive ROI of an Engineered Air Nozzle

You may have asked…why should I switch over to an engineered air nozzle if my system already works? Or…How can air nozzles be much different?

Manufacturing has always been an advocate for cost savings, where they even have job positions solely focused on cost savings. Return on Investment (ROI) is a metric they look toward to help make good decisions for cost savings.  The term is used to determine the financial benefits associated with the use of more efficient products or processes compared to what you are currently using. This is like looking at your homes heating costs and then changing out to energy efficient windows and better insulation. The upfront cost might be high but the amount of money you will save over time is worth it.

But how is ROI calculated? It is very simple to calculate out your potential savings of using one of EXAIR’s Intelligent Engineered Compressed Air Products. If you would rather not do the calculations out yourself then we can do it for you by sending the item in question to our Efficiency Lab Testing. The Efficiency Lab Testing is a free service that we offer to show you the possible savings by switching to one of our products.

The following is a simple ROI  calculation for replacing open blowoffs with an EXAIR Super Air Nozzle:

• ¼” Copper Pipe consumes 33 SCFM at 80 psig (denoted below as CP)
• A Model 1100 ¼” Super Air Nozzle can be used to replace and only uses 14 SCFM at 80 psig (denoted below as EP)

Calculation:

(CP air consumption) * (60 min/hr) * (8 hr/day) * (5 days/week) * (52 weeks/year) = SCF used per year for Copper Pipe

(33) * (60) * (8) * (5) * (52) = 4,118,400 SCF

(EP air consumption) * (60 min/hr) * (8 hr/day) * (5 days/week) * (52 weeks/year) = SCF used per year for EXAIR Product

(14) * (60) * (8) * (5) * (52) = 1,747,200 SCF

Air Savings:

SCF used per year for Copper Pipe – SCF used per year for EXAIR Product = SCF Savings

4,118,400 SCF – 1,747,200 SCF = 2,371,200 SCF in savings

If you know the facilities cost to generate 1,000 SCF of compressed air you can calculate out how much this will cost you would save. If not, you can us \$0.25 to generate 1,000 SCF which is the value used by the U.S. Department of Energy to estimate costs.

Yearly Savings:

(SCF Saved) * (Cost / 1000 SCF) = Yearly Savings

(2,371,200 SCF) * (\$0.25 / 1000 SCF) = \$592.80 annual Savings

With the simple investment of \$42 (as of date published) you can calculate out the time it will take to pay off the unit.

Time Until payoff:

(Yearly Savings) / (5 days/week * 52 weeks/year) = Daily Savings

(\$592.80/year) / (5 days/week * 52 weeks/year) = \$2.28 per day

(Cost of EXAIR Unit) / (Daily Savings) = Days until product has been paid off

(\$42) / (\$2.28/day) = 17.9 days

As you can see it doesn’t have to take long for the nozzle to pay for itself, and then continue to contribute toward your bottom line.

If you have any questions about compressed air systems or want more information on any of EXAIR’s products, give us a call, we have a team of Application Engineers ready to answer your questions and recommend a solution for your applications.

Cody Biehle
Application Engineer
EXAIR Corporation
Visit us on the Web

## 6 Steps to Optimizing Your Compressed Air System

If you’re a follower of the EXAIR Blog, you’re probably well aware that compressed air is the most expensive utility in an industrial environment. The average cost to generate 1000 Standard Cubic Feet of compressed air is \$0.25. If you’re familiar with how much air you use on a daily basis, you’ll understand just how quickly that adds up.

To make matters worse, many compressed air systems waste significant amounts of compressed air just through leaks. According to the Compressed Air Challenge, a typical plant that has not been well maintained will likely have a leak rate of approximately 20%!! Good luck explaining to your finance department that you’re carelessly wasting 20% of the most expensive utility.

The best way to save energy associated with the costs of generating compressed air is pretty straightforward and simple: TURN IT OFF! Placing valves throughout your distribution system allows you to isolate areas of the facility that may not need a supply of compressed air continuously.

Even a well-maintained system is going to have a leakage rate around 10%, it’s darn near impossible to absolutely eliminate ALL leaks. By having a valve that allows you to shut off the compressed air supply to isolated areas, you’re able to cut down on the potential places for leaks to occur.

You’re likely not running each and every machine continuously all day long, if that’s the case why not shut off the air supply to those that aren’t running? When operators go to lunch or take a break, have them turn off the valves to prevent any wasted air. The fact of the matter is that taking this one simple step can truly represent significant savings when done diligently.

You wouldn’t leave your house with all the lights and TV on, so why leave your compressed air system running when it’s not in use? Even if everyone’s left for the day, leaks in the system will cause the compressor to keep running to maintain system pressure.

Taking things one step further, EXAIR’s Electronic Flow Control (EFC) utilizes a solenoid controlled by photoelectric sensor that has the ability to shut off the compressed air when no part is present. If you’re blowing off parts that are traveling along a conveyor with space in between them, there’s no need to continuously blow air in between those parts. The EFC is able to be programmed to truly maximize your compressed air savings. The EFC is available in a wide range of different capacities, with models from 40-350 SCFM available from stock and systems controlling two solenoid valves for larger flowrates available as well.

It’s no different than turning off your house lights when you leave for work each day. Don’t get caught thinking compressed air is inexpensive “because air is free”. The costs to generate compressed air are no joke. Let’s all do our part to reduce energy consumption by shutting off compressed air when it isn’t necessary!

Tyler Daniel
Application Engineer
E-mail: TylerDaniel@EXAIR.com