Rewind or Replace a Failed 100-hp Compressor Motor
A 100-hp, 1,800-rpm, 460-V totally enclosed fan-cooled motor drives a plant air compressor. It failed after 11 years. The existing motor has a full-load efficiency of 92.4% and a power factor of 0.86. A rewind shop quotes $7,500 with a 90-day warranty and expects the rewind to reduce efficiency by 1.5 percentage points. A new NEMA Premium motor costs $13,800, has 95.4% efficiency and a three-year warranty, and can be installed in the same footprint. The compressor runs 4,200 hours per year at 78% of the motor's rated output. Electricity costs $0.085/kWh, and the utility demand charge is $17/kW-month. The plant has a 15% internal rate-of-return hurdle and usually replaces failed motors with the lowest first-cost option. The maintenance manager is concerned about another failure during peak production and asks for a lifecycle comparison. Assume the motor operates at 78% load and that demand savings are coincident with the monthly peak.
1. Calculate the annual energy and demand savings of the premium motor relative to the rewind, and the simple payback on the incremental cost.
Read the worked answer
Shaft output = 100 hp × 0.746 kW/hp × 0.78 = 58.2 kW.
Rewind input = 58.2 / (0.924 − 0.015) = 58.2 / 0.909 = 64.0 kW. Premium input = 58.2 / 0.954 = 61.0 kW. Savings = 64.0 − 61.0 = 3.0 kW.
Annual energy savings = 3.0 × 4,200 = 12,600 kWh, worth $1,071/year at $0.085/kWh. Demand savings = 3.0 × $17 × 12 = $612/year. Total = $1,683/year.
Incremental cost = $13,800 − $7,500 = $6,300. Simple payback = $6,300 / $1,683 = 3.7 years. The rewind-efficiency degradation assumption is doing most of the work; without it, the case is weaker.
2. What if the rewind actually restores efficiency to 92.4%? Recalculate and discuss whether the premium motor still clears the 15% IRR hurdle over a 15-year life.
Read the worked answer
If the rewind restores 92.4%, rewind input = 58.2 / 0.924 = 63.0 kW, so savings = 63.0 − 61.0 = 2.0 kW. Energy savings = 8,400 kWh/year = $714/year. Demand savings = 2.0 × $17 × 12 = $408/year. Total = $1,122/year. Simple payback = $6,300 / $1,122 = 5.6 years.
At a 15% hurdle over 15 years, the present value of $1,122/year is $1,122 × 5.847 = $6,560, against $6,300 incremental cost. NPV ≈ +$260. That is marginal and highly sensitive to demand coincidence, actual hours, and any rewind efficiency loss. If demand savings are only 50% coincident, annual savings fall to about $918 and NPV becomes negative. The premium motor clears the hurdle only barely under favorable assumptions.
3. Recommend a decision and list three conditions that would change it.
Read the worked answer
Recommend the premium motor if the rewind shop cannot guarantee restored efficiency and the compressor is critical to production. The incremental cost is modest, the warranty is longer, and the calculated payback is under four years if the expected 1.5-point efficiency loss occurs. If the rewind can be documented to restore 92.4% or better, the rewind is defensible on first cost, but the lifecycle case is thin and reliability may decide it.
Conditions that would change the decision: (1) annual run hours rise above about 6,000, which improves the premium case; (2) a utility rebate exceeds roughly $1,500, which shortens payback; (3) the rewind includes a comparable three-year warranty and efficiency test, which makes rewind more attractive. Also verify actual load factor; if the motor is genuinely oversized and can be replaced with a smaller premium unit, re-evaluate the whole drive.