Industrial Motors / Energy Management

Take lifetime costs for motors into account when replacing

Taking a total-cost-of-ownership approach to motor replacement can save big dollars — and help save the planet.

By Gerardo Elias-Rodriguez

The Department of Commerce estimates that there are more than 12.4 million electric motors larger than 1 hp in service throughout industry in the United States, and that nearly 3 million of these workhorses will fail this year. The chances are good that you’ll face the prospect of selecting the right motor to replace a failed unit sooner rather than later. You also should evaluate the economics of replacing all the motors in your plant to save energy and contribute to environmental improvements.

Compared with other equipment, an electric motor is an exceptionally reliable device. It’s not unusual for a properly installed motor to achieve its expected lifetime of 20 years to 30 years. That leads to an interesting fact. The cost of the energy a motor consumes during its useful life is many times the motor’s purchase price. Studies have shown that a motor’s purchase price represents just 2% of its lifetime cost, whereas the electricity it consumes accounts for more than 97% of the life-cycle cost.

This clearly indicates that total life-cycle costs are the right way to evaluate motor selection. Also, there are several governmental regulations to consider in the selection process, as well as opportunities for tax credits and utility rebates that will affect your decision. With this in mind, let’s take a look at the options you have for replacing a motor, whether it’s serviceable, sick or failed.

Choose the right efficiency

If a standard efficiency motor is still in serviceable condition and was installed before Oct. 24, 1997, when the motor efficiency standards in the Energy Policy Act (EPAct) of 1992 came in force, you might choose to rewind it rather than replace it. In general, rewinding a motor costs about 40% of the purchase price of a new unit — a reasonable savings.

But, the Department of Energy (DOE) indicates that even best-practice rewinding brings a penalty in operating efficiency. The rewinding process raises the amount of energy consumed and, therefore, the motor’s operating cost during its remaining life. The DOE suggests that motors smaller than 70 hp should be replaced, not rewound.

If a motor is beyond repair and rewinding, you have several replacement options to consider. Because EPAct grandfathered in purpose-built motors that were installed before 1992, you might be able to replace your motor with a new custom-built standard efficiency unit. In this case, you’d expect the same ongoing energy cost profile during the next two or more decades. Remember, however, that electricity costs have been rising during the past five years and this trend isn’t expected to moderate.

As an alternative, you could consider a high-efficiency motor that meets the current EPAct efficiency standards. Such high-efficiency motors (also called NEMA High Efficiency motors) are readily available. Their cost premium of less than 10% compared to standard efficiency motors is offset by their 1% to 4% better operating efficiency within a couple of months (Table 1). In fact, the reduction in energy usage, on average, will pay for the entire motor within a few years and continue to deliver additional savings during the two decades or more of useful life you might expect.

Size (hp) Std Efficiency EPAct NEMA Premium
5 84.0% 88.2% 90.5%
10 86.8% 90.0% 92.2%
15 87.6% 91.0% 92.6%
20 89.3% 92.6% 93.4%
25 89.9% 93.1% 94.0%
50 91.6% 93.9% 94.5%
100 93.6% 94.1% 95.0%
Table 1. Average efficiency (at 75% load) for various sizes of standard efficiency, EPAct and NEMA Premium motors

Finally, consider selecting a NEMA Premium Efficiency motor to replace existing standard efficiency units. NEMA Premium motors already meet the efficiency standards that will come into effect at the end of 2010 under the Energy Independency and Security Act and deliver a further 1% to 3% improvement in efficiency compared to EPAct high efficiency units at a purchase cost premium of about 30% over standard efficiency motors. Such high energy efficiency delivers a payback on the purchase premium in less than two months. You’ll recover the entire cost of the NEMA Premium motor in less than three years.

Utilities and state and federal energy regulators have several programs in place that make the last alternative — NEMA Premium motors — even more attractive. These combinations of rebates, tax incentives and cost-sharing programs vary by state and municipality, but all of them can be substantial, significantly reducing the payback period for energy-efficient motors. These incentives are inducing a number of companies to replace perfectly serviceable motors with high-efficiency units as part of green initiatives that improve a company’s brand positioning in the marketplace.

Calculate the savings

Calculating the potential savings from replacing a standard efficiency motor with a NEMA Premium unit is straightforward (Eqn. 1).

Savings = 0.746 x hp x hr x rt x (1/Eo – 1/En)    (Eqn. 1)

hp = motor size (in horsepower)
hr = operating hours per year
rt = utility rate in $/kilowatt-hour
Eo = efficiency of the existing motor (decimal fraction)
En = efficiency of the replacement motor (decimal fraction)

Replacing a 100 hp standard efficiency motor (Eo = 0.936) that runs 8,000 hours per year with a 100-hp NEMA Premium motor (En = 0.95) will result in an annual energy savings of more than $750 when a kilowatt-hour costs $0.08.

Savings = 0.746 x 100 x 8,000 x 0.08 (1/0.936 – 1/0.95)
             = 47,744 x (1.06838 – 1.05263)
             = 47,744 x (0.01575)
             = $751.97 per year

Clearly, this would cover the motor’s cost premium in a few months and the entire cost in a few years, while producing significant savings in lifetime costs beyond that.

Simply replacing a standard efficiency motor with an alternative doesn’t guarantee reduced electricity bills. Factors such as duty cycle, motor oversizing, unbalanced phases and other application variables can reduce the potential savings. Always consult with your motor OEM to determine the exact savings to expect.

Consider the future

To help maximize the economic benefit from your motor-replacement choice, the Industrial Efficiency Alliance (IEA), a nonprofit organization dedicated to making energy efficiency a core business value, suggests establishing a continuous energy improvement program. The first step in such a program is to appoint a motor system champion who has the training and authority to make decisions about future motor purchases. The champion should conduct a comprehensive motor management assessment or energy audit to gather appropriate data about the motors installed in your plant. Using this data, your champion can advise plant management about ways to improve motor purchasing, rewinding and maintenance issues. In addition, the champion can work with qualified vendors and contractors, as well as utility representatives, to optimize the motor system efficiency throughout the plant

If you aren’t currently evaluating NEMA Premium efficiency motors as replacements for failed or functional standard efficiency motors, you’re probably leaving a lot of money on the table. The IEA estimates that a dollar saved on energy, maintenance and production is equivalent to $17 in sales revenue having a 6% gross margin.

Further, DOE estimates indicate that switching from standard efficiency motors to NEMA Premium Efficiency motors could save our economy more than $10 billion annually and reduce carbon emissions by nearly 80 million metric tons — the carbon equivalent of taking 16 million vehicles off the road. That’s not only good business — it can make a real environmental difference.

Gerardo Elias-Rodriguez is marketing manager at WEG Electric Motors Corp., Suwanee, Ga. Contact him at and (678) 249-2000.