1 Start at the centre of the Onion (see diagram below) by identifying the relevant Energy Service.

An energy service
for a specific level of work or activity to be performed. However, an Energy Service is more than simply 'Compresse
To identify the Energy Service, ask yourself:
- What do I want to do with the compressed air?
- What requires the compressed air?
- What is the fundamental piece of work that I want compressed air to do?

An example of a compressed air related Energy Service might be: to produce a vacuum to pick up a product from on
another.

2 Then, for each Energy Service, ask yourself:

- Do I really need (paid-for) energy to deliver this energy service?
- Is there another way of delivering the output that requires using less or no energy?
- Can I use a less energy intensive alternative?
- What is the minimum specification required?
- Can I reduce (increase) pressures, temperatures, run times, flowrates, currents etc. to reduce the energy require

3 Start at the point of energy service demand and work back upstream through the energy distribution and conversion
consistent with the energy efficiency hierarchy.

4 Is the technology that is currently satisfying each energy service demand appropriate? Or can it be eliminated or re
effective alternative?
5 Can the system be designed better?

6 Identify the most efficient / optimum operational control parameters for the most effective technology to satisfy each
Can cycle times be adjusted?

7 Are there opportunities to distribute the energy more efficiently, e.g. insulation, improved structural integrity (eliminat
etc.?

8 Is there scope for technical or operational modifications to the energy conversion systems (compressors, boilers, ch
the consumption of energy resources (natural gas, gasoil, electricity, wood chips etc.)?

9 Finally, are there O&M or housekeeping actions that can be taken to reduce the consumption of energy resources?

###The following Onion diagram illustrates this approach and also identifies some best practice energy savings measu
'layers'. Simple energy saving calculation sheets for each of these measures are included in this spreadsheet.

###SEAI operates an accelerated capital allowance (ACA) scheme, which is a tax incentive for companies to purchase
equipment. It allows companies to write off 100% of the purchase value of specified energy efficient equipment in th
see which equipment qualifies for ACA and to find out more go to www.seai.ie/aca or click on the graphic below. The
technical information available on the qualifying equipment. There is also an ACA worksheet in this spreadsheet.

Compressed Air Systems

- The "Onion" Approach to Improving Energy Efficiency

the Onion (see diagram below) by identifying the relevant Energy Service. An energy service demand is the need
work or activity to be performed. However, an Energy Service is more than simply 'Compressed Air'.

y Service, ask yourself:

do with the compressed air?
compressed air?
mental piece of work that I want compressed air to do?

pressed air related Energy Service might be: to produce a vacuum to pick up a product from one belt and drop it on

y Service, ask yourself:

paid-for) energy to deliver this energy service?
ay of delivering the output that requires using less or no energy?
nergy intensive alternative?
um specification required?
ease) pressures, temperatures, run times, flowrates, currents etc. to reduce the energy required?

nergy service demand and work back upstream through the energy distribution and conversion system(s) this is
nergy efficiency hierarchy.

at is currently satisfying each energy service demand appropriate? Or can it be eliminated or replaced by a more

esigned better?

ient / optimum operational control parameters for the most effective technology to satisfy each service demand.
djusted?

es to distribute the energy more efficiently, e.g. insulation, improved structural integrity (elimination of leaks), isolation

hnical or operational modifications to the energy conversion systems (compressors, boilers, chillers etc.) to reduce
nergy resources (natural gas, gasoil, electricity, wood chips etc.)?

M or housekeeping actions that can be taken to reduce the consumption of energy resources?

diagram illustrates this approach and also identifies some best practice energy savings measures at different
gy saving calculation sheets for each of these measures are included in this spreadsheet.

celerated capital allowance (ACA) scheme, which is a tax incentive for companies to purchase energy efficient
companies to write off 100% of the purchase value of specified energy efficient equipment in the year of purchase. To
qualifies for ACA and to find out more go to www.seai.ie/aca or click on the graphic below. There is also useful
available on the qualifying equipment. There is also an ACA worksheet in this spreadsheet.

Compressed Air
- Reduce System Pressure
If pressure is set higher than needed then energy is being wasted. The discharge pressure set point range should be
set to the minimum level needed for process air requirements.

Estimate Your Savings

What Does this Sheet Do? Calculates the energy savings achievable by reducing the discharge pressure.
Rule of Thumb: Every 1 bar in pressure reduction produces a 6-7% energy saving.
Parameter

Example

Your Data

Unit

Comment

Motor Power :

150.00

[kW]

Motor Efficiency :

90%

[%]

Weighted average combined motor efficiency (default = 90%)

% Full Load :

65%

[%]

Estimate of average percentage motor load factor (default = 65%)

Annual Operation Hours :

8,400

[h/y]

24h/7d = 8,760 hours; 24h/5d = 6,240 hours; 8h/5d = 2,080 hours.

Pressure Reduction :

1.00

[bar]

Average reduction in discharge pressure set-point

Annual Energy
:
Consumption

910,000

% Savings :

6.5%

Annual Energy Savings :

59,150

Average Electricity Price :

0.140

Annual Cost Savings :

8,281

#DIV/0! [kWh/y]
0.0%

[%]

Sum of all compressor, cooling fan and dryer motor ratings

= (Motor Power [kW]) / (Motor Efficiency [%]) x (% Full Load [%]) x (Operation
Hours [h])
= (Pressure Reduction [bar]) x (6 - 7% saving per bar)

#DIV/0! [kWh/y] = (Annual Energy Consumption [kWh]) x (% Savings [%])

[/kWh]
#DIV/0!

[/y]

Insert from Energy Bills Analysis Tool

= (Annual Energy Savings [kWh/y]) x (Average Electricity Price [/kWh])

Payback: Depends on the number of problems in the system & additional controls required (if any); could be < 1 year.

Additional Information & Tips

In undertaking this opportunity, the discharge pressure should be stepped down in small increments (e.g. 1/4 bar) and
the performance of critical end users should be carefully monitored. Continue reducing the pressure and monitoring
until a problem arises. At that time, correct the problem at its point of origin and resume the procedure of decreasing
pressure incrementally. When all problems are located and repaired, raise the pressure range set point back up by a
small amount (e.g. 0.15 bar) and stop the process at this new optimum setting. The whole process may take several
weeks.
The saving calculated above does not include the fringe savings which could be expected (reduced leaks, reduced
component maintenance, etc.).
It is a common finding in audits to identify a situation where an end user is utilising unregulated compressed air. A
pressure regulator is a device utilised to limit the maximum end of line pressure and is generally placed in the
distribution system immediately upstream of end users. Without this device, the energy users utilise the maximum
system pressure resulting in increased wear and tear; higher maintenance costs; and a shorter operational lifetime. In
addition, local pressure reduction reduces artificial demand (leakage and other parasitic loads).

If a situation occurs where one specific end user is dictating the pressure of the entire system, it is often more
economic to replace or modify this component rather than increase the system pressure. For example, the bore of a
solenoid stem could be increased, or the gear ratios can be changed, or similar mechanical advantages could be
exploited before taking the easier, but more financially costly, route of increasing compressor discharge pressure at
the generation station. Other possible solutions include boosters immediately upstream of the end users or a
dedicated high pressures system.
Source: SEAI Energy Agreements Programme 2007 Compressed Air Technical Guide

Compressed Air
- Energy Wasted from Leaks
Leaks are an unfortunate but regular feature in compressed air distribution networks. Typically, the energy
requirements served by a compressed air system are intermittent in nature; however leaks are constant and potentially
significant. The monetary cost of leaks can be quite startling, and surprising. In order to move forward with any leak
reduction programme, it is important to benchmark the current leakage rate. The extent to which a compressed air
system is leaking can be easily determined during non-production hours through assessment of Monitoring & Targeting
(M&T) data (if present) or through manual pressure indicator readings in the distribution network with some quick
calculations.
A first cut estimate of the percentage of air leaked in a system can be calculated using the following method.
Method : During a period where there is no demand for the compressed air allow the compressor to build up the
system pressure until it reaches the shutoff point. Then, for a given period of time (e.g 30 minutes), record the time the
compressor runs for and the time that it is shut off. The percentage of air that is leaking from the system can be
estimated using the following formula.
% of Air Leaking = (Time in Operation x 100 ) / ( Time in Operation + Time not in Operation )
The above formula can be modified to calculate the rate of air leakage, giving:
Rate of air leakage [l/s] = (Rated F.A.D of Compressor [l/s] x Time On Load [sec]) / (Time on Load [sec] x Time
off Load [sec])

Estimate Your Savings

What Does this Sheet Do? Calculates the energy savings associated with reducing leaks in a compressor system.
Rule of Thumb: % of Air Leaking = (Time in Operation x 100 ) / ( Time in Operation + Time not in Operation ).
Every 1 l/s of air leakage wastes about 700 kWh per year.
Parameter
Rated Free Air Delivery
:
(FAD)

Example

Your Data

200

Unit
[l/s]

Comment
Rated Free Air Delivery rate of the compressor (200 l/s typical for a 75kW
Compressor)

Time on Load

[min]

Time interval for compressor to load

Time off Load

10

[min]

Time interval for compressor to unload

% Air Leaks :

23%

#DIV/0!

[%]

= (Time on Load [min] x 100) / (Time On Load [min] + Time Off Load [min])

Air Leakage rate :

46

#DIV/0!

[l/s]

= (% Air Leaks [%]) x (Rated Free Air Delivery [l/s])

Approximate Energy
:
Wasted

32,308

Average Electricity Price :

0.140

Approximate Energy
:
Cost of Leakage

4,523.08

#DIV/0! [kWh/y] = (Air Leakage Rate [l/s]) x 700 [kWh/(l/s)]

[/kWh]
#DIV/0!

[/y]

Insert from Energy Bills Analysis Tool

= (Approximate Energy Wasted [kWh/y]) x (Average Electricity Price [/kWh])

Payback: Due to the large savings associated with a regular Leak Detection Programme, the potential savings
associated with this opportunity to save energy often results in payback periods of less than 1 year.

Additional Information & Tips

Leakage can occur at any point in a compressed air system, but the most common culprits include piping joints, drains,
relief valves, drain valves, flexible hose pipes, filter and lubricator units, pressure regulators, condensate traps and
thread sealants. The best means of locating compressed air leaks is an ultrasonic acoustic detector capable of
identifying the high frequency noise synonymous with compressed air leaks. When this technology is not available,
simpler methods such as applying soapy water to the distribution network and waiting for bubbles to form is just as
effective.
A leak reduction program will involve identification (tagging), tracking, repairing,
The most valuable tool in combating leakage in the system are personnel who should be brought onboard and actively
engaged in the programme. Plant personnel will often become actively engaged in a leak reduction programme.
Knowing that a reduction in leaks will lead to a more comfortable working environment will often result in more active
involvement from personnel. The goal of any programme is to make individual departments responsible for usage.
Accordingly, flow to these departments should be monitored to ensure that area ownership is taken. Facilities utilising
significant volumes of compressed air should aggressively engage in a Leak Detection Programme and carry out a biannual compressed air leakage survey. Finally, it is important to bear in mind that one of the most effective means of
reducing compressed air leakage is to reduce the distribution pressure.

Fixing the leaks is often as simple as tightening connections or applying sealant at strategic points. However leaks will
be found that require the replacement of faulty components. In all instances, select the highest quality fittings,
disconnects, hoses, tubes, etc. and install them as appropriate with high quality thread sealant. A 10% reduction in
leakage, which is a modest target for leakage in any system, would often be gained as a result of carrying out an
intensive leak reduction programme.
Source: SEAI Energy Agreements Programme 2007 Compressed Air Technical Guide

Compressed Air
- Savings from Reducing Leaks
Leaks are an unfortunate but regular feature in compressed air distribution networks. Typically, the energy
requirements served by a compressed air system are intermittent in nature; however leaks are constant and
potentially significant. The monetary cost of leaks can be quite startling, and surprising.

Estimate Your Savings

What Does this Sheet Do? Calculates the energy savings achievable by switching off a top-up (trim) compressor
after eliminating leaks (because the compressor is no longer required).
Rule of Thumb: Leakage levels at facilities are typically as high as 20-30% and levels as high as 50% are not
unusual. The leakage percentage will be below 10% in a well-maintained system.
The most energy will be saved if there are multiple compressors and repairing leaks results in enough air load
reduction to shut down one partly-loaded compressor. For variable speed or systems with a lot of storage, the
percentage savings will approximate the percentage of capacity (l/s) reduced.
Parameter

Example

Your Data

Unit

Comment

Motor Power :

111.90

[kW]

Motor rating of compressor that can be Switched Off

Motor Efficiency :

92%

[%]

Motor efficiency for compressor that can be Switched Off (default = 92%).

Average Part Load

:
Condition

70%

[%]

Average compressor loading expressed as a percentage of the rated capacity

(l/s or CFM). (Default: Modulating machines = 70%; Load/unload with little
storage = 70%; Load/unload with a lot of storage = 40%; Variable inlet
volume = 40%; VSD = 20%)

Annual Operation Hours

:
Saved (Off)

6,000

[h/y]

24h/7d = 8,760 hours; 24h/5d = 6,240 hours; 8h/5d = 2,080 hours.

Annual Energy Savings :

510,848

#DIV/0! [kWh/y]

Average Electricity Price :

0.140

[/kWh]

Annual Cost Savings :

71,519

#DIV/0!

[/y]

= (Motor Power of Compressor that is turned Off [kW]) / (Motor Efficiency [%])
x (Average Part Load of Compressor [%]) x (Annual Operating Hours [h])
Insert from Energy Bills Analysis Tool
= (Annual Energy Savings [kWh/y]) x (Average Electricity Price [/kWh])

Payback: Due to the large savings associated with a regular Leak Detection Programme, the potential savings
associated with this opportunity to save energy often results in payback periods of less than 1 year.

Additional Information & Tips

In order to move forward with any leak reduction programme, it is important to benchmark the current leakage rate.
The extent to which a compressed air system is leaking can be easily determined during non-production hours through
assessment of Monitoring & Targeting (M&T) data (if present) or through manual pressure indicator readings in the
distribution network with some quick calculations.
Leakage can occur at any point in a compressed air system, but the most common culprits include piping joints,
drains, relief valves, drain valves, flexible hose pipes, filter and lubricator units, pressure regulators, condensate traps
and thread sealants. The best means of locating compressed air leaks is an ultrasonic acoustic detector capable of
identifying the high frequency noise synonymous with compressed air leaks. When this technology is not available,
simpler methods such as applying soapy water to the distribution network and waiting for bubbles to form is just as
effective.
A leak reduction program will involve identification (tagging), tracking, repairing,
recording and verification.

The most valuable tool in combating leakage in the system are personnel who should be brought onboard and actively
engaged in the programme. Plant personnel will often become actively engaged in a leak reduction programme.
Knowing that a reduction in leaks will lead to a more comfortable working environment will often result in more active
involvement from personnel. The goal of any programme is to make individual departments responsible for usage.
Accordingly, flow to these departments should be monitored to ensure that area ownership is taken. Facilities utilising
significant volumes of compressed air should aggressively engage in a Leak Detection Programme and carry out a biannual compressed air leakage survey. Finally, it is important to bear in mind that one of the most effective means of
reducing compressed air leakage is to reduce the distribution pressure.
Fixing the leaks is often as simple as tightening connections or applying sealant at strategic points. However leaks will
be found that require the replacement of faulty components. In all instances, select the highest quality fittings,
disconnects, hoses, tubes, etc. and install them as appropriate with high quality thread sealant. A 10% reduction in
leakage, which is a modest target for leakage in any system, would often be gained as a result of carrying out an
intensive leak reduction programme.

Compressed Air
- High Efficiency Motor
Compressors usually do not come with high efficiency motors as standard; however, they are often offered as options.
If the compressor will have long annual run hours, then a high efficiency motor may be more economical.

Estimate Your Savings

What Does this Sheet Do? Calculates the energy savings achievable by using a high efficiency motor instead of a
standard motor.
Rule of Thumb: A high efficiency motor will typically be 1.5% more efficient than a standard compressor packaged
motor.
Parameter

Example

Your Data

Unit

Comment

Motor Power :

111.90

[kW]

Compressor motor rating

Motor Efficiency :

92%

[%]

Compressor motor efficiency Included with the standard compressor package

(default = 92%).

% Full Load :

65%

[%]

Estimate of average percentage motor load factor (default = 65%)

Annual Operation Hours :

8,760

[h/y]

24h/7d = 8,760 hours; 24h/5d = 6,240 hours; 8h/5d = 2,080 hours.

Annual Energy Savings :

11,111

Average Electricity Price :

0.140

Annual Cost Savings :

1,555

= (Motor Power [kW]) x (% Full Load [%]) x (Operation Hours [h]) x

#DIV/0! [kWh/y] ((1/Compressor Motor Efficiency [%]) - (1/(Compressor Motor Efficiency [%] +
1.5%)))
[/kWh]
#DIV/0!

[]

Insert from Energy Bills Analysis Tool

= (Annual Energy Savings) x (Average Electricity Price [/kWh])

Payback: Base loaded machines that operate close to full load for more hours annually will show quicker returns on
the investment in the high efficiency motor than trim machines that operate fewer hours annually.

Additional Information & Tips

None

Compressed Air
- Multiple-stage Compressor
Normally buyers may select between a single-stage and a two-stage machine when purchasing an air compressor. In
most cases, multiple-stage compression results in more efficient operation. Multiple-stage means that the final
discharge pressure is generated over several steps. Efficiency is significantly increased as a result of the cooling of air
between stages, thereby reducing the volume and work required to compress the air. In the case of reciprocating
compressors, each stage usually requires a separate cylinder, and in rotary screw compressors, each requires a
separate rotor disc; in either case the air is passed though the stages in succession.

Estimate Your Savings

What Does this Sheet Do? Calculates the energy savings achievable by using a multiple stage compressor instead
of a single stage compressor.
Rule of Thumb: Two-stage reciprocating compressors are ~6% more efficient than single-stage reciprocating
compressors and two-stage rotary screw compressors are ~13% more efficient than single-stage versions.
Parameter

Example

Your Data

Unit

Comment

Motor Power :

111.90

[kW]

Motor Efficiency :

92%

[%]

Compressor motor efficiency (default = 92%).

% Full Load :

65%

[%]

Estimate of average percentage motor load factor (default = 65%)

Annual Operation Hours :

8,760

[h/y]

24h/7d = 8,760 hours; 24h/5d = 6,240 hours; 8h/5d = 2,080 hours.

13%

[%]

6% for Reciprocating Compressor; 13% for Rotary Screw Compressor

% Savings over
Single- stage:
Annual Energy Savings :

90,033

#DIV/0! [kWh/y]

Average Electricity Price :

0.140

[/kWh]

Annual Cost Savings :

12,605

#DIV/0!

[]

Compressor motor rating

= (Motor Power [kW]) / (Motor Efficiency [%]) x (% Full Load [%]) x (Operation
Hours [h]) x (% Savings over Single-stage)
Insert from Energy Bills Analysis Tool
= (Annual Energy Savings) x (Average Electricity Price [/kWh])

Payback: The premium paid for equal power, two-stage machines will be 30 to 40%. However, the two-stage machine
will have more capacity (l/s) than the same power, single-stage machine. Therefore sometimes a smaller power twostage machine can be used instead of the larger power single-stage machine for the same job, resulting in an effective
cost premium of less than 30%.

Additional Information & Tips

Rotary Screw Compressors are the most common compressors used in industry today and do have many inherent
advantages over reciprocating compressors including a lower capital cost; lower maintenance costs; smaller size and
reduced vibration and noise. Two stage rotary screw compressors may not be available for sizes smaller than ~75
kW.
Reciprocating compressors were historically the most commonly used compressors. However, the higher capital and
maintenance costs have reduced their market dominance in recent years. Despite this, it is generally accepted that
multi-stage version of these units are the most efficient compressor type.
Centrifugal compressors are generally only suitable for high volume applications with little variance in the demand
load. These compact units are available in two, three and four stage compression technology. Generally centrifugal
compressors are three stage units which tend to be more efficient than rotary screw compressors with inherent
efficiencies approaching those of double-acting reciprocating compressors.

Compressed Air
- VSD for Part Load Control
Traditionally, a number of compressors provide the base load at a facility with one compressor providing top up. A
standard compressor operating in this top up mode cannot ramp up and down to track transient demands; airflow is
typically controlled by a valve that modulates between open and closed positions. Unfortunately, this method results in
a higher discharge pressure, lower part load efficiencies, and increased overall power consumption. Accordingly, a
strong economic case can often be made for installation of Variable Speed Drive (VSD) motor for the compressor at
facilitates displaying inherently variant demand profiles for the top up compressor.

Estimate Your Savings

What Does this Sheet Do? Calculates the energy savings achievable by using a Variable Speed Drive (VSD) instead
of inlet modulation control.
Rule of Thumb: The percentage power savings derived from using VSD compressor control rather than inlet
modulation control is expressed approximately by: Power Savings = 70% (100% - % Rated Flow)
Parameter

Example

Your Data

Unit

Comment

Motor Power :

150.00

[kW]

Motor Efficiency :

92%

[%]

Compressor motor efficiency Included with the standard compressor package

(default = 92%).

VSD Efficiency :

96%

[%]

Variable Speed Drive efficiency (default = 96%).

Average Part Load

:
Condition

75%

[%]

Average compressor loading expressed as a percentage of the rated capacity

(l/s or CFM)

Annual Operation Hours :

6,000

[h/y]

24h/7d = 8,760 hours; 24h/5d = 6,240 hours; 8h/5d = 2,080 hours.

Average Power Saving :

27.39

[kW]

= (Motor Power [kW]) / (Motor Efficiency [%]) x 70% x (100% - Average Part
Load Condition [%]) x VSD Efficiency [%]

Annual Energy Savings :

164,348

Average Electricity Price :

0.140

Annual Cost Savings :

23,009

#DIV/0!

Compressor motor rating

#DIV/0! [kWh/y] = (Average Power Saving [kW]) x (Annual Operating Hours [h/y])
[/kWh]
#DIV/0!

[/y]

Insert from Energy Bills Analysis Tool

= (Annual Energy Savings [kWh/y]) x (Average Electricity Price [/kWh])

Payback:

Additional Information & Tips

Capable of being fitted to reciprocating, rotary vane and screw machines, VSD motors control over a close pressure
band minimising artificial demand and the need for control valves. These units are capable of a more dynamic air
discharge to meet the demand at the required pressure. It does this by varying the speed of the compressor motor,
which dramatically reduces energy consumption. In addition, the compressor is enabled with software to sense when it
should be taken offline. Other benefits include reduced wear and tear of the compressor; compressor lifecycle
extension; and increased compressor stability due to smooth start-ups.
VSD motors can be integrated into existing machines however VSD controllers and motors supplied in conjunction
tend to offer superior performance.
If a unit is likely to be operated at 100%, a VSD compressor should not be procured; tests have shown a performance
reduction in VSD compressors when 100% loaded. From experience, a case can often be made for the installation of
a VSD compressor when loads for the top-up compressor lie in the 30-70% range.

Compressed Air
- Variable Inlet Volume for Part Load Control
Traditionally, a number of compressors provide the base load at a facility with one compressor providing top up. A
standard compressor operating in this top up mode cannot ramp up and down to track transient demands; airflow is
typically controlled by a valve that modulates between open and closed positions. This control scheme is applied to
rotary screw compressors, but is an inefficient means for controlling compressor output for displacement
compressors. Most manufacturers offer options in the larger compressors (>75 kW) that have more efficient part
load characteristics. In one model, which is the variable inlet volume model, the length of the compression chamber is
effectively decreased by the use of internal valves, allowing the compressor to reduce airflow quite efficiently down to
about 50% of rated full flow capacity.

Estimate Your Savings

What Does this Sheet Do? Calculates the energy savings achievable by using variable inlet volume control instead of
modulation control.
Rule of Thumb: The percentage power savings derived from using variable inlet volume compressor control rather
than inlet modulation control is expressed approximately by: Power Savings = 45% x (100% - % Rated Flow)
Parameter

Example

Your Data

Unit

Comment

Motor Power :

150.00

[kW]

Motor Efficiency :

92%

[%]

Compressor motor efficiency Included with the standard compressor package

(default = 92%).

Average Part Load

:
Condition

75%

[%]

Average compressor loading expressed as a percentage of the rated capacity

(l/s or CFM)

Annual Operation Hours :

6,000

[h/y]

24h/7d = 8,760 hours; 24h/5d = 6,240 hours; 8h/5d = 2,080 hours.

Average Power Saving :

18.34

[kW]

= (Motor Power [kW]) / (Motor Efficiency [%]) x 45% x (100% - Average Part
Load Condition [%])

Annual Energy Savings :

110,054

Average Electricity Price :

0.140

Annual Cost Savings :

15,408

#DIV/0!

#DIV/0! [kWh/y] = (Average Power Saving [kW]) x (Annual Operating Hours [h/y])
[/kWh]
#DIV/0!

Payback:

Additional Information & Tips

None

Compressor motor rating

[/y]

Insert from Energy Bills Analysis Tool

= (Annual Energy Savings [kWh/y]) x (Average Electricity Price [/kWh])

Accelerated Capital Allowance (ACA)

In addition to saving money by operating more energy efficient equipment, you can improve cashflow by investing in
equipment that qualifies for the Accelerated Capital Allowance (ACA) scheme operated by SEAI. This is a tax
incentive for companies to purchase energy efficient equipment. To see which equipment qualifies for ACA and to find
out more go to www.seai.ie/aca or click on the graphic below. There is also useful technical information available on
the qualifying equipment.

Estimate Your Savings

What Does this Sheet Do? Calculates the Cashflow savings achievable by availing of Accelerated Capital
Allowances for qualifying energy-efficient equipment.
Rule of Thumb: ACA allows companies to write off 100% of the purchase value of specified energy efficient
equipment in the year of purchase.
Parameter

Example

Your Data

Unit

Comment

Capital cost of Qualifying

:
Equipment

100,000

Corporation Tax Rate :

12.5%

12.5%

[%]

Actual Year 1 Net

:
Cashflow without ACA

98,438

[]

Standard capital allowance allows firms to write off 1/8 of capital cost
against tax each year (for 8 years)

Actual Year 1 Net

:
Cashflow with ACA

87,500

[]

Accelerated capital allowance allows firms to write off ALL of capital cost
against tax in first year

Year 1 Saving in Net

:
Cashflow

10,938

[]

= (Actual Year 1 Net Cashflow without ACA) - (Actual Year 1 Net Cashflow
with ACA)

Discount Rate :

9.0%

[%]

The Discount Rate used by your business

[]

See www.seai.ie/aca for details of qualifying equipment

PV of standard Capital
Allowance

9,426

[]

Present Value (PV) to your business of the Standard Capital Allowances, i.e.
no ACA

PV of Accelerated Capital
Allowance

12,500

[]

Present Value (PV) to your business of the Accelerated Capital Allowances,

i.e. with ACA

Additional Information & Tips

With the standard capital allowance for plant and machinery, the tax saving is spread equally over eight years and
therefore also subject to typical monetary devaluation. With the ACA, it is all recovered in the first year, resulting in
direct cash flow benefits without degradation of value with time.
In summary, the ACA benefits you by ensuring:
- increased opportunities for further investment
- a shorter break-even period on the investment
- a higher return on the investment
- lower ongoing energy costs through using energy-efficient equipment
- a marketing edge through being environmentally friendly
- a higher real value on capital allowance return in an inflationary market
Remember that these savings are in addition to the operational savings (energy, and environmental) associated
with using energy efficient equipment.
Source: www.seai.ie/aca

Energy MAP Tool Version History

Version

Description of Modification(s)

Date

1.0

Draft for Review

5/19/2008

1.1

Release for Energy MAP Day 2

5/19/2008

1.2

Limited cell protection

5/22/2008

1.3

Addition of "What does this Sheet Do?"

Addition of ACA link
Addition of sheets: ACA, Leaks - Energy Wasted

2.0

Final - for publication

3.0

Final - updated links and logos to reflect SEAI rebranding

12/18/2008
6/9/2009
10/5/2010

on History
Additional Comments