Upgrading your compressed air system can deliver major savings on your energy bill—and your energy company may help cover the cost. Many utilities across the country offer incentive programs designed to encourage businesses to invest in more efficient equipment and smarter system management. That can include everything from upgrading to a variable speed drive (VSD) compressor to installing zero-loss drains, smarter controls, cycling dryers, leak repairs and more.
These programs can put thousands of dollars back in your pocket while helping you lower energy use, reduce waste and keep your system running at peak performance. If your facility relies on compressed air, it’s worth checking to see what incentives are available in your area before making your next upgrade.
Here are some of the energy companies that Fluid-Are Dynamics works with. Don’t see yours? Contact us to see how we can help in your area!
- ComEd (Chicago and Northern Illinois)
- Xcel Energy (Minnesota)
- Consumer Energy (Michigan)
- DTE Energy (Michigan)
- Focus on Energy (Wisconsin)
- Jersey Central Power and Light (New Jersey)
Understanding Energy Company Incentives for Compressed Air Systems
Energy companies offer these programs to help reduce stress on the power grid and avoid costly infrastructure expansions. By encouraging businesses to lower their energy use or shift loads to off-peak times, utilities can better manage demand and minimize the risk of blackouts or service interruptions. Supporting customers in making energy-efficient upgrades is often far more cost-effective for the utility than building new generation capacity.
These programs are funded through small line items on commercial energy bills, which means you’re already helping to support them — and may be eligible to benefit in return.
How Energy Incentives Work
While every utility has its own program structure, most industrial energy incentives fall into two general categories:
- Prescriptive incentives: These provide set rebate amounts for specific qualifying equipment or upgrades. For example, a utility might offer a flat dollar amount per horsepower for upgrading to a VSD compressor or per CFM for switching to a cycling dryer. These programs are typically the fastest and easiest to access.
- Custom incentives: These are tailored to your specific facility and based on actual energy savings achieved. You may qualify for a rebate based on dollars per kWh or kW reduced through a project, which can apply to a wider range of upgrades beyond standard equipment.
In general, the process works like this:
- Preapproval: You or your service provider submits an application outlining the planned upgrades. (This may not be required under standard or prescriptive rebate programs.)
- Project implementation: Equipment is installed and improvements are documented.
- Verification: The utility reviews the project to confirm eligibility and savings.
- Rebate issued: Once approved, funds are paid directly to the business or the vendor providing or installing the equipment, helping offset upgrade costs.
Partnering with a qualified service provider can make this process smoother and ensure you get the maximum available incentive.
Energy Incentives for Compressed Air Equipment
Every energy company structures its programs a little differently, but many offer incentives for upgrades and improvements to compressed air systems. These incentives are designed to help facilities reduce wasted energy, lower operating costs and extend equipment life. Here are some of the most common types of improvements that may qualify.
VSD Compressors
Upgrading from a fixed-speed compressor to a variable-speed drive (VSD) compressor is often where businesses see the biggest financial return. VSD compressors automatically adjust motor speed to match demand, eliminating the wasted energy caused by running at full load during low-demand periods.
Because the energy savings can be substantial, many utility providers offer some of their highest rebate amounts for VSD upgrades. Incentives may be structured as a flat amount per horsepower, a percentage of project cost, or based on energy savings achieved.
VSD upgrades can also help facilities manage peak demand more effectively—another big reason utilities encourage these projects.
Other Energy-Efficient Equipment Upgrades
In addition to VSD compressors, many utilities offer rebates for other energy-saving system improvements, such as:
- Cycling and VFD dryers that automatically adjust operation based on airflow
- Zero-loss condensate drains that eliminate compressed air loss during draining
- Smart controls and master system controllers to optimize system performance
- Storage tanks, pressure/flow controllers and mist eliminators that improve efficiency and system stability
These upgrades work together to reduce energy waste, stabilize system pressure and increase overall system reliability.
Leak Detection and Repair Programs
Compressed air leaks are one of the most common — and costly — sources of wasted energy in a facility. Some energy providers offer compressed air leak detection and repair incentives, which may cover part or all of the cost of surveys, repairs or leak monitoring systems.
While not every utility includes these programs, some offer them annually or on a recurring basis, helping facilities reduce ongoing losses and maintain system efficiency year after year. Regular leak detection can yield significant energy savings even without major equipment upgrades.
Getting Started with Energy Incentives for Compressed Air Systems
The smartest way to unlock energy incentives is to start with an energy audit. An audit – which generally will include data logging and other tests – reveals where your system is wasting energy and identifies the most cost-effective upgrades to maximize savings. From there, you can determine which utility incentives you qualify for and how much of your project cost can be offset.
Many programs require preapproval, so it pays to start early and work with a partner who knows the process. Fluid-Aire Dynamics is an authorized service provider for compressed air system energy incentives through multiple utilities, including ComEd, Xcel Energy, DTE, Consumer’s Energy, Focus on Energy and Jersey Central Power and Light. We can help with every step:
- Identifying your biggest energy-saving opportunities
- Matching you with the right incentive programs
- Handling the application and paperwork
- Installing and supporting your new equipment
We make it simple to save energy and money while improving system performance. Contact us to schedule your energy audit today — the sooner you start, the sooner you’ll see the savings on your energy bill!
