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Calculating Energy Cost to Operate a Compressor

Key Points
  • To estimate electricity cost, convert motor horsepower to kilowatts and multiply by run time.
  • A more precise calculation would include input volts, amps, and power factor.
  • Convert horsepower to cubic feet per minute (CFM) to calculate running cost by air volume. 

Source: U.S. Department of Energy
air compressor

Compressors are expensive to run. In many cases, the cost of electricity over two years exceeds the purchase price of the compressor itself. Annual maintenance costs are an additional 10% or more of the initial compressor cost.

Compressed air is necessary for many plant processes, but it is an inefficient source of energy. You need 7 to 8 hp of electrical power to operate a 1 hp air motor of a compressor. The overall efficiency of a typical compressed air system can be as low as 10% to 15%!

In addition, be sure to watch for small loads that operate 24/7 and that are being run on a large process compressor. It is much more cost effective to pull that load off to a small compressor rather than keep the process unit on through off-process hours. The following equation shows how you can determine the cost to run your compressor motors:

Annual Electricity Cost:

[Horsepower x 0.746 x Hours x Electricity Cost] / Motor Efficiency

Horsepower (hp) = motor full load horsepower
1 hp = 0.746 kilowatts (kW)
Hours = number of hours that the compressor operates
Electricity Cost = $/kWh (Add in demand charges and calculate average $/kWh)
Motor Efficiency = motor nameplate full-load efficiency can vary from 75% to 95%

Example One:
What is the annual electricity cost to operate a fully loaded 200 hp compressor that runs 40% of the time (3,500 hrs/yr)? Motor efficiency is assumed to be 85%, so the compressor is drawing approximately 175 kW. Electricity cost is $0.08/kWh. If the monthly demand charge is $10/kW, then the customer will be charged $1,750 each month in addition to the kWh usage cost (51,040 kWh with the above assumptions). For this situation, the average cost of electricity including the kWh use and demand charge is approximately $0.114/kWh.

Annual Electricity Cost = [hp x 0.746 x Hrs x Electricity Cost] / Motor Efficiency

Annual Electricity Cost = [200 hp x 0.746 kW/hp x 3,500 hrs x $0.114/kWh] / 0.85

Annual Electricity Cost = $70,036

If the motor in the above example were increased to 92% efficiency, the annual electricity cost would be reduced to $64,707.

Example Two:
Assume that you want to make a more precise calculation for a three-phase compressor. Example One does not include system losses for belts, fans, pumps, and so on. Therefore, it is more accurate to measure input kW or input voltage and current. Using the same scenario where the compressor runs 40% of the time (3,500 hrs/yr), the full-load amps, line-to-line voltage, and power factor are all measured in this case. Electricity cost is $0.08/kWh. The monthly demand charge is $10/kW—the overall average cost of electricity with demand charge is approximately $0.114/kWh.

Full-load amps = 280 amps
Line-to-line voltage = 460 volts
Power Factor (pf) = 0.82

First, find the kW usage for the three-phase motor:

kW = [volts x amps x pf x 1.732] / 1,000 = [460 x 280 x 0.82 x 1.732] / 1,000 = 183 kW

Annual Electricity Cost = kW x Hrs x Electricity Cost

Annual Electricity Cost = 183 kW x 3,500 hrs x $0.114/kWh

Annual Electricity Cost = $73,017

Note that in the second example, the electricity measurements are made in the circuit leading to the compressor motor, so that the full power usage is measured. However, the motor efficiency is still a factor when one considers a possible motor change out, as noted in Example One.

What does it cost per CFM (cubic foot per minute) of compressed air?

Example Three:
The following provides a ballpark estimate for a typical compressor running 6,000 hours annually, assuming a 90% efficient motor, 4 CFM is produced per 1 hp, and electricity cost is $0.08/kWh.

1 CFM = 0.25 hp = 0.25 hp/0.90 x 0.746 kW/hp = 0.207 kW

1 CFM = 0.207 kW (assuming a 90% efficient motor)

Annual Electricity Cost for 1 CFM = kW x Hrs x Electricity Cost

Annual Electricity Cost for 1 CFM = 0.207 kW x 6,000 hrs x $0.08/kWh

Annual Electricity Cost for 1 CFM = $99.50 or approximately $100/CFM

Other Compressor Costs

Do not forget to factor in equipment capital costs, maintenance costs, water supply costs (for water cooled units), and any overhead costs for floor space, insurance, and so on.

An important point to remember is to make sure your system is well designed, operates in an efficient manner, and minimizes system leakage. In an interview, compressor expert Hank Van Ormer suggested the following energy-saving tips:

  1. Reduce compressed air use in production wherever possible. Switch to motors, mechanical actuators, and other means to accomplish the same function. Only use compressed air when it is absolutely necessary!
  2. Reduce system losses. Leaks can represent 30% or more of air demand. Most leaks are at the point of use. Eliminate all timer-waste drains.
  3. Lower system pressure where possible—105 psi can cost 25% more than 95 psi in energy use. Do you really need that much system pressure?
  4. Use the appropriate unloading controls (modulating control) to reduce air usage and lower input energy where possible. In the case where multiple units are involved, a modern electronic central air management system will keep all the units on at full load, and only one unit at part load. The objective is to keep compressors off when they are not needed, thereby reducing energy use.

The University of Minnesota offers other energy-saving tips, including recovering wasted heat for other processes, keeping inlet air filters clean, and using cooler intake air.


"Compressed Air System Economics," Improving Compressed Air System Performance: A Sourcebook for Industry, U.S. Department of Energy, Office of Industrial Technologies. Last accessed July 22, 2011.

"Air Compressor Energy-Saving Tips," University of Minnesota, Minnesota Technical Assistance Program. Last accessed July 22, 2011.

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