How to Calculate Operating Costs and Potential Savings
Saving electrical energy reduces the power bill. However, a sensible energy cost savings evaluation must equate the energy savings with the extra cost usually associated with a premium efficient motor. Annual dollar savings can be easily calculated using the following formula:
Dollars Savings Per Year =
0.746 x HP x [(1/EffA) - (1/EffB)] x hours x $/KWh
Where:
HP = load on the motor
EffA = efficiency of motor A at HP (expressed as decimal)
EffB = efficiency of motor B at HP (expressed as decimal)
EffA < EffB
Hours = hours of operation under load
$/KWh = average cost of electricity per kilowatt hour
Operating load and hours substantially affect savings. A motor loaded to half its rated load uses only half the full load input power and the savings can be only half as great. A motor operated on a two shift, five day schedule uses twice as much power as the same motor operating on one shift. Meaningful calculations must reflect an effort to incorporate typical average values for these variables.
Lincoln gives you two premium-efficiency options: select an Ultimate E1 motor to meet EPAct (United States) and NRCAN (Canada) requirements; or choose an Ultimate E2 model to maximize your energy savings. Either way, you'll enjoy lower operating costs.
How to Calculate Payback
Once the annual savings are known, the time needed for the savings to cover the motor price premium can be calculated as follows:
Payback Period (years) =
(Price B - Price A)/Yearly Savings
A more complex analysis may take into account life cycle costs and return on investment. MotorMaster+ software, available from the U.S. Department of Energy's Motor Challenge program, is a great tool for this and many other uses.
Your local electric utility may have a demand side energy management (DSM) program which pays cash incentives or rebates for the purchase of motors whose nominal efficiency meets or exceeds a level specified by the utility. The Payback Period equation must be modified to take into account rebates.
Payback Period (years) = (Price B - Price A - Rebate)/Yearly Savings
Lincoln Ultimate E motors have efficiency ratings which should qualify for a rebate from participating utilities. Check with your local utility for details on their specific program.
Measuring motor efficiency in the field is not easy due to a number of factors. See "How Accurate is AC Motor Energy Auditing?" for all the facts
