Time to Upgrade Your Compressed Air System? Your Energy Company Might Pay the Bill.

Oct 26, 2021 by Brad Taylor

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Time to Upgrade Your Compressed Air System? Your Energy Company Might Pay the Bill.

Upgrading your compressed air system from a fixed-speed to a variable-speed drive (VSD) can deliver big savings on your energy bill. But did you know that your energy company may help you pay for the cost of the upgrade? You could get thousands of dollars back on the purchase of a VSD compressor or other energy-saving improvements for your compressed air system. 

Understanding Energy Company Incentives for Compressed Air Systems 

ComEd (Chicago and Northern Illinois), Xcel Energy (Minneapolis area), and many other energy providers nationwide all have incentive programs in place to encourage businesses to replace older, outdated equipment with newer, energy efficient models. In Wisconsin, Focus on Energy partners with local utilities to offer similar programs across the state. These programs offer cash back to businesses when they purchase equipment that reduces their overall power consumption or evens out peaks and valleys in their energy load. 

Energy companies offer these incentives because improving energy efficiency helps to reduce stress on the power grid and minimize the risk of unexpected outages. Large pieces of industrial equipment like air compressors are a logical target for utilities because of the amount of power they draw and the large differences in energy use seen between older models and new, energy efficient compressors. 

The programs are paid for through a line item in your energy bill. You may see it as the “Energy Incentives Program Fee” or something similar under the “taxes and fees” portion of your bill. 

Under these incentive programs, you could get thousands of dollars back from your energy company when you upgrade from a fixed-speed rotary screw compressor to a VSD compressor or make other system updates that improve your energy efficiency, such as fixing leaks or installing a smart energy monitoring system. Each energy company has their own list of qualifying equipment purchases and upgrades, so check with your provider for full details. We’ve outlined a few of the incentive programs in our service areas below. Check with your energy company for details and to make sure you qualify before making a decision. 

ComEd Energy Incentives (Chicago and Northern Illinois)

The ComEd offers a number of Compressed Air Energy Savings programs, depending on your business size and power consumption. 

  • The Small Business Program is targeted to companies with less than 100 kW demand. Small businesses can get up to $400 back when upgrading from a fixed speed to a VSD air compressor (up to 150 HP). The same program offers up to $500 back on installation of zero-loss drain valves, $10/CFM capacity replaced for upgrading to a cycling type dryer, and $150 back on storage tanks/HP. 
  • For companies with over 100 kW demand and air compressors up to 150 horsepower, the Prescriptive Offering provides $85/HP back on a VSD air compressor and $3/CFM capacity for a VSD dryer. ComEd also offers $1,000 back for each Remote Energy Monitoring system installed and $120 per leak for compressed air system leak repair
  • The Custom Program, for companies with more than 100 kW demand and air compressors larger than 150 HP, delivers $0.12 per kW saved, regardless of the technologies used to get there. This incentive can be used towards leak repair, pressure reduction, or purchase of VSD compressors, master system controllers, and other efficiency upgrades. 

Xcel Energy Incentives (Minneapolis/St. Paul Area) 

Xcel provides funding for compressed air studies every five years for customers with compressed air systems of 10 HP or greater. A compressed air study uses flow metering, ultrasonic leak detection and other methods to identify leaks and inefficiencies that are driving up energy costs for your system. Xcel will cover 100% of the costs of the study when you repair 75% of identified leaks, with limits based on the operating horsepower of your system. You must get pre-approval to quality. 

  • 500 HP or more: $4,000 plus $20/HP up to $25,000
  • 200 HP-499 HP: $3,000 plus $20/HP
  • 50 HP-199 HP: $2,000 plus $20/HP
  • 10HP-49 HP: $250 plus $20/HP

You may also qualify for additional incentives to offset the cost of energy improvements, such as upgrading to a VSD drive. 

Focus on Energy (Wisconsin)

Focus on Energy is a statewide program for Wisconsin utilities and their customers. They offer a variety of Energy Incentive Programs aimed at both small businesses and larger energy users. This includes a variety of incentives for improving the energy efficiency of compressed air and vacuum systems. 

  • Their Leak Survey and Repair program covers up to 100% of survey and repair costs up to a maximum of $4,000 per year. Rates are $8/HP for small businesses and $4/HP for larger businesses. 
  • Businesses purchasing VSD air compressors or vacuum pumps may qualify to have up to 50% of the cost of their equipment covered, with incentives of $45/HP for VSD compressors and $40/HP for VSD vacuum pumps. 
  • Business upgrading to a cycling or variable frequency drive (VFD)-controlled refrigerated dryer may qualify for incentives of $0.50/CFM on their new equipment. 
  • Additional incentives are available for installing dewpoint demand controls for desiccant dryers, no air-loss condensate drains, pressure/flow controllers, compressed air mist eliminators, air-entraining nozzles, and heat recovery and load shifting systems. 

Getting Started with Energy Incentives for Compressed Air Systems

Many of these programs require preapproval, so talk to your local energy provider to find out what incentives your business qualifies for and what criteria you must meet. 

Fluid-Aire Dynamics is an authorized service provider for compressed air system energy incentives through ComEd, Xcel and Focus on Energy. Contact us to learn how we can help you improve the energy efficiency of your compressed air system. The sooner you get started, the sooner you can start saving money on your energy bill!

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