CALCULATING ROI FOR HVLS FANS...
When it comes to evaluating potential capital expenditure projects, one acronym stands above the rest – ROI, or return on investment. If you’re considering HVLS fans, calculating ROI helps estimate the time period necessary for full payback in the form of energy savings. But how are these calculations done, and what critical information is needed to do them? Keep reading to find out!
Energy savings from HVLS fans are generally realized during the winter months, due to destratification (see Strait Talk, February 2015). Because of this, knowing your heating cost and consumption information is vitally important, as HVLS fans can help reduce them both by up to 30%!* Also important is the cost of your electricity, since heaters consume electrical power as well as natural gas when they are in use. Other inputs that help “fine tune” your ROI calculation include: facility square footage, hours of operation, number of heaters, heater voltage and amperage ratings, and average length of the winter heating season.
So how is all this data used to calculate ROI? It all starts by estimating current resource consumption costs (both natural gas and electrical – I will spare you the boring formulas here). Once a total consumption amount is determined, calculate a projected savings amount as a percentage of that total consumption (15-20% is usually a solid, conservative savings estimate). Then, subtract your fan electrical costs (again, boring formula) from your savings – this is your net savings amount. Finally, divide your net savings by the projected cost of your new fans and – Bob’s your uncle – you have ROI (in number of heating seasons)! Pretty easy….right?!
Of course, as with any calculation, the result should be used as a guide toward making an informed cap-ex budget decision. It should not be taken as “gospel,” as any number of factors can affect the actual savings amount (e.g. price of natural gas, unusually harsh or mild winters). But overall, an HVLS ROI calculation can provide valuable insight into current resource consumption issues, and identify potential air movement solutions.
Want to learn more about ROI calculations for HVLS fans? Give your regional Patterson sales representative a call today, and let them introduce you to our High-5 fan. You’ll soon be spinning your way to lower heating costs this winter!
*Actual savings depend on heating costs, size of facility, number of fans, and other factors