Learn how efficiency can make a difference in your profitability: explore implications in the bottom line of a motor lifetime cost analysis.

The word "efficiency" is often used in normal conversation, meaning different things to different people. In general, it refers to how well a resource is utilized: Higher efficiency implies less waste. For many industrial motor users though, the bottom line for motor purchases isn't efficiency, but purchase price. Unfortunately, using this criteria for motor purchases is not only shortsighted, but can lead to a costly mistake.

For an electric motor, efficiency is defined as the ratio of Power Out to Power In. Power In is measured in Watts or kilowatts (kW) of electricity. Power Out (in the United States) is measured in mechanical horsepower (hp) delivered to the motor shaft. Since kilowatts and horsepower are both units of power, it is very simple to convert from one to the other: 1 hp = 746 Watts (0.746 kW).

As an example, consider a 100 hp motor running at full load. Using an accurate power meter, a field technician measures the Power In to the motor to be exactly 90,000 Watts. Since the motor is assumed to be fully loaded, the Power Out is 100 hp x 746 Watts/hp or 74,600 Watts. To determine the motor efficiency then, Power Out (74,600 Watts) is divided by Power In (90,000 Watts), for an efficiency of 0.828 or 82.8%.

The logical question to follow is: Where do the other Watts go? In the example above, 90,000 Watts of electrical power went into the motor, but only 74,600 Watts of mechanical power were delivered at the motor shaft. Thus, the motor "lost" 90,000 - 74,600, or 15,400 Watts. These "lost" Watts were converted into heat within the motor, and are referred to as the motor losses. The motor must be able to adequately dissipate this heat through the use of fans and/or cooling fins, or it will begin to run hotter and hotter, eventually failing. In the example, motor losses accounted for 100% - 82.8%, or 17.2% of the power in.

Now to look at the financial impact of motor efficiency, assume that the 100 hp motor in the previous example runs 24 hours per day, 7 days per week. Typical lifespan for such a motor is 40,000 hours, or roughly 5 years of continuous operation. For this exercise, assume that electric costs are $0.05 per kW-hour (kWh). Further assume that the motor is running at full load, and is 94% efficient at full load.

Over the lifetime of the motor, it will incur substantial costs for electric use: :(100 hp x .746 kW/hp x 40,000 hrs x $.05/kWh)/.94 eff. = $ 158,723. However, if the motor is just 1% more efficient, it will cost significantly less: (100 hp x .746 kW/hp x 40,000 hrs x $.05/kwh)/.95 eff. = $ 157,053. Therefore, a consumer buying such a motor for this application could "afford" to pay up to $158,723 - $157,053, or $1670 more for the motor with higher efficiency, and still realize savings on electricity use.

The good news is that the cost difference between these motors will be much less than $1670. A current motor supply catalog gave a list price of $7951 for a 100 hp motor with 95.4% efficiency. Another 100 hp motor from the same manufacturer with an efficiency of only 94.5% lists for $7586. This is a difference of only $365, for nearly a full 1% improvement in efficiency.

It is possible to normalize this savings figure to develop a "rule of thumb" than can be applied to motors of any size. Dividing the savings on electric costs by the motor horsepower yields $1670/100 hp or $16.7/hp. This figure means that when comparing the costs of two motors, a consumer can afford to pay $16.7 per hp per point of efficiency improvement. For ease of use, this figure is often rounded down to $15 per hp per point of efficiency improvement. This "rule of thumb" can be used to compare any two motors, no matter what their size. Simply multiply $15 times the horsepower of the motors, times the difference in the efficiency of the two motors. If the difference in price between the two motors is less than the thumb rule figure, then the more efficient motor is the better buy.

A common thumb rule is $15 per hp per point of efficiency improvement. This "rule of thumb" can be used to compare any two motors, no matter what their size. Simply multiply $15 times the horsepower of the motors, times the difference in the efficiency of the two motors. If the difference in price between the two motors is less than the thumb rule figure, then the more efficient motor is the better buy.

In the example, the list price of the 100 hp motors was less than $8000. But these motors consume over $150,000 worth of electricity over their lifespan. Thus that the purchase price of a motor becomes insignificant when compared to its lifetime operating costs. When comparing two motors of different efficiency for a potential application, it's almost always a good economic idea to buy the more efficient motor. And it's generally a good idea to buy the most efficient motor you can find for the application. Savings in energy costs over the lifetime of the motor will more than make up for the higher purchase price.

Operating Cost vs Purchase Price

  

	Automobile	60 HP Motor
Purchase Price	$20,000	$1,985
Annual Use	12,000 mi/year	8,000 hrs
Efficiency	30 mi/gallon	90.2%
Fuel/Energy Cost	$1.20/gal	5c/kWh
Annual Operating Cost	$480/yr	$10,848/yr
Operating cost as %
of purchase price	2.4%	1000%
This example illustrates the fact that first costs drive the lifecycle cost for an automobile, but the operating costs of the motor dominate its overall costs.