At Sensorfact, we help manufacturers to save energy by analysing data from our Energy Management System (EMS) and implementing energy saving measures. After analysing energy consumption on machine-level, our energy consultants regularly propose energy savings that involve investments. This could be a more efficient machine, installing cos-phi capacitor banks or fixing compressed air leakages.
We always calculate the payback period on investments so our clients can make data-driven investment decisions. Our energy consultant Kathelijn will share insights into calculating the payback period.
Answer: The payback period is calculated by dividing the total investment costs by the amount of yearly savings. These yearly savings are calculated by multiplying the energy price by the amount of kWh one can save on a yearly basis. To have an accurate estimate of how much you will save, you only need to regard the variable part of the energy price. Fixed costs such as costs for connecting to the grid are excluded, as they do not change when the energy consumption changes.
For example: if a customer can saven €1500 on a yearly basis by fixing their compressed air leakages, and the costs for having the leakages assessed and fixed are €3000, the payback period is €3000 / €1500 = 2 year.
Answer: When mapping a customer’s savings potential, we filter our advice on acceptable payback periods to keep our advice realistic. As a rule of thumb, we only propose investments that have a maximum payback period of 5 years. One exception is LED lighting, for which we use a payback period of up to 10 years.
You can expect different payback periods for different savings. Small investments usually have a payback period of 1 or 2 years, for example:
Larger investments – such as replacing older electromotors for new and more efficient ones – will usually have a payback period between 3 – 5 years.
Answer: Yes, our approach only provides an estimate of the payback period. For smaller investments, this method is quick and more than sufficient. For higher investments, e.g. when replacing expensive equipment, I recommend to look into the following factors as well:
We love helping our customers save on energy with our plug-and-play Energy Management System. On average, our clients save up to 10% on their energy bill. This is the result of comparing machines, eliminating energy waste, fixing leaks and making profitable investments. Curious to find out how you can start with smart energy management? Download our white paper 5 Steps to Smart Energy Management