Calculating the life cycle cost of a compressed air system is a common method of analyzing the overall investment of new equipment in a systematic way. A life cycle cost analysis examines all stages of a product’s expected life from the initial investment to final waste removal or recycling of the equipment.
It’s important to do your homework before investing in new equipment and calculating the life cycle cost can help facility managers make educated decisions. Here are three additional reasons why you should calculate the life cycle cost of a new compressor or compressed air system.
Use the Life Cycle Cost as a Comparison Tool– Because the life cycle cost includes capital expenditures, operating costs and maintenance service costs, an analysis can be used to compare products and systems before you make an investment. The result can also be used to provide guidance for communication with subcontractors or customers, depending on your industry.
Start Defining Requirements for a New Installation – The life cycle cost is often based on a planned installation or the current working installation. Though the calculation is only a qualified estimate of future costs, it encourages facility managers to define operating requirements before purchasing equipment, plus look into the future of the installation to assess potential environmental, energy-saving and increased production quality demands.
Find Solutions for Increased Energy Efficiency – Energy consumption typically represents 80 percent of the overall cost of a compressed air installation. A life cycle cost analysis can reveal areas for improvement. For instance, calculations can include potential energy savings and the resulting cost savings for an installation that incorporates energy recovery versus an installation that does not.
Making a life cycle cost calculation requires specialized knowledge and experience with compressed air installations. If you’d like to learn more, contact us or leave a comment below. And don't forget to sign up for our weekly Compressed Air Blog e-newsletters.
