5. When is an energyefficient motor cost effective?
The extra cost of an energyefficient motor is often quickly repaid in energy savings.
As illustrated in Table 2, each point of improved motor efficiency can save significant amounts of money each year.
As illustrated in Table 2, each point of improved motor efficiency can save significant amounts of money each year.
In typical industrial applications, energyefficient motors are cost effective when they operate more than 4000 hours a year, given a 2year simple payback criterion. For example, with an energy cost of $0.04/kWh, a single point of efficiency gain for a continuously operating 50hp motor with a 75% load factor saves 4079 kWh, or $163 annually. Thus, an energyefficient motor that offers four points of efficiency gain can cost up to $1,304 more than a standard model and still meet a 2year simple payback criterion. A utility rebate program would further enhance the benefits of an energyefficient motor.
Whenever possible, obtain actual price quotes from motor distributors to calculate simple paybacks. Motors rarely sell at full list price. You can typically obtain a 20% to 60% discount from vendors, with specific prices depending on the distributorâ€™s pricing policies, the number and type of motors you buy, and fluctuations in the motor market. Comparison shop when purchasing motors. The following three techniques can help you determine whether an energyefficient motor is cost effective:
Whenever possible, obtain actual price quotes from motor distributors to calculate simple paybacks. Motors rarely sell at full list price. You can typically obtain a 20% to 60% discount from vendors, with specific prices depending on the distributorâ€™s pricing policies, the number and type of motors you buy, and fluctuations in the motor market. Comparison shop when purchasing motors. The following three techniques can help you determine whether an energyefficient motor is cost effective:

Use the MotorMaster or Windowsbased MotorMaster+ software program to calculate the dollar savings and simple payback from using a more efficient motor, taking into account motor size, price, efficiency, annual hours of use, load factor, electricity costs, and utility rebates. MotorMaster can be used to analyze a new motor purchase, rewind of a failed motor, or replacement of a working motor. This program is described in further detail in the answer to Question 9.

Use the following formulas to calculate the annual energy savings and simple payback from selecting a more efficient motor. Simple payback is defined as the time required for the savings from an investment to equal the initial or incremental cost.

Use Table 3 to determine whether a new energyefficient motor will meet common payback criteria. Table 3, which is based on typical motor efficiencies and prices, indicates the minimum number of hours a year a motor must be used at various energy prices in order to obtain a 2, 3, and 4year simple payback. This technique is less accurate than a more detailed analysis. The calculation of values for Table 3 assumes that an energyefficient motor has a 15% to 25% price premium with no utility rebate, and it ignores other
benefits of energyefficient motors. A lower price premium, a rebate program, or reliability benefits make energyefficient motors even more cost effective.
Choose a new energyefficient 1 to 100hp motor if it will be used more than the indicated number of hours each year.
to be continued………………..
Source : Fact Sheet – US Department of Energy
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