Compressor costs08 May 2024

Industrial air compressor capital expenditure

Purchasing an industrial air compressor is among the most crucial decisions for a business, but it also represents a significant capital expenditure. This is because compressed air is an essential utility for businesses along with water, gas, and electricity

Compressed air powers various tools and machinery necessary for daily operations. Therefore, decisions over which technology to invest in becomes even more important as an air compressor is expected to serve the business for an extended period when appropriately maintained as per the manufacturer’s guidelines. Hence, it is not a purchase of short-term value and is responsible for supporting factory operations for a considerable period.

This is why companies consider many factors when deciding which air compressor to buy. Of course, the choice of the compressor technology is of paramount importance when selecting the air compressor. Will the air compressor be an oil-lubricated compressor or an oil-free compressor? It depends on the application and the sensitivity of the presence of oil in the manufacturing system. Similarly, the airflow requirement is another factor that determines the choice of the air compressor and helps decide how powerful the compressor should be. As per the energy efficiency consideration, energy consumption is a major cost factor in the operation of air compressors. Evaluating the life cycle cost helps in selecting a compressor with optimal energy efficiency, leading to long-term savings on energy bills. However, the cost of an air compressor remains another important factor that affects the purchase decision.


Many companies often consider the initial investment of purchasing an air compressor when considering air compressor cost. However, this value can be misleading in the long run. In a race to buy the best low-cost air compressor, companies may often need to remember that as a capital expenditure purchase, air compressors are expected to have a long lifespan and, hence, have many other costs intertwined with their performance. These include the costs of the energy consumed by the air compression systems. When maintained properly, an industrial air compressor with higher energy efficiency will have a lower overall energy cost throughout its lifespan. Similarly, there are maintenance costs to factor in for capital expenditure equipment. Air compressors require regular maintenance to operate efficiently, and the maintenance cost of an air compressor can add up to a significant value throughout its lifetime.

This is why it is important to understand the life cycle cost when understanding the total cost of ownership of a compressor. The life cycle cost provides a more comprehensive cost efficiency in the long run instead of focusing on just the initial cost of an air compressor. Companies can ensure overall cost savings through the entire lifespan by selecting an air compressor system with high energy efficiency and low maintenance requirements.


The life cycle cost of a compressor is a concept that encompasses all the significant costs incurred by a screw compressor, such as energy cost, maintenance cost and initial investment. In short, the life cycle cost or the total cost of ownership of an air compressor comprises all the expenses and investments that will be necessary during the lifetime of the screw compressor.

A life cycle cost analysis is a comprehensive tool for comparing and evaluating various compressor systems. It sheds light on potential total investments, encompassing three key components: initial investment; lifetime maintenance costs and lifetime energy costs.

With those elements:

Life cycle cost = (initial investment) + (lifetime maintenance costs) + (lifetime energy costs).


Initial investment constitutes the upfront cost of purchasing and installing the air compressor system. The initial investment can depend upon the type of the industrial air compressor required for the application. The cost can further increase if accessories such as air filters or refrigeration dryers are included in the compressed air system set up. The initial investment is the most visible amount in the acquisition of a screw compressor, as it is the first expense that must be faced. However, it usually represents only 10% of the total cost of ownership.

Lifetime maintenance costs includes all the routine maintenance and repairs performed during the compressor’s lifespan and contributes to the overall cost. Proactive maintenance practices can help minimise unexpected downtime and extend the compressor’s lifespan. Similarly, choosing an air compressor that has minimum maintenance requirements saves costs in the long run. The addition of accessories such as compressed air filters can also help reduce long-term maintenance costs as they can protect the internal systems of an industrial air compressor from damage caused by dust in the operating environment.


These costs include the cost of the energy consumed while operating the compressor through its entire lifespan. This is further dependent on the following elements:

  • Load power: this is the power consumed to generate compressed air at a specific pressure with the required flow.
  • Unload power: this is the power consumed when the air compressor runs idle without generating useful compressed air.
  • Blow-off losses: this is the cost of depressurising the air compressor during idle conditions, leading to the loss of valuable compressed air into the atmosphere.
  • Pressure drop: compressed air pressure drop refers to the decrease in air pressure that occurs as compressed air travels through a compressed air system. Every 1 bar(g) decrease in pressure consumes 7% more power, emphasising the importance of minimising pressure drops in the system.
  • Air leakages: compressed air leakages can account for 10-30% of the compressed air energy, resulting in significant power losses and operational inefficiencies.
  • It has to be noted that pressure drops, blow-off losses, and air leakages can be avoided with proper maintenance. Air leak detection can be a part of periodic maintenance plans to prevent compressed air loss due to leaks.


    It is crucial to know the life cycle cost of an air compressor to benefit from cost savings in the long run. As a capital expenditure purchase, calculating the total cost of ownership helps when factoring in the air compressor cost. It also helps to look at the costs from a more comprehensive lens instead of focusing on just the cost price of the equipment. Further, by identifying and addressing inefficiencies in energy consumption, maintenance, and initial investment, companies can enhance overall operational efficiency and productivity. Selecting the right compressor by factoring in the compressor’s life cycle cost not only improves the operational efficiency of the manufacturing process but also contributes to overall cost-efficiency. By prioritising energy efficiency and maintenance practices, companies can unlock cost savings and ensure the reliability of their compressed air infrastructure. Calculating life cycle costs helps you assess the long-term impact of energy consumption on your operational expenses. Investing in a more energy-efficient compressor can lead to big savings.

    Sovathya Koun, product manager, ELGi Compressors Europe

    This material is protected by MA Business copyright
    See Terms and Conditions.
    One-off usage is permitted but bulk copying is not.
    For multiple copies contact the sales team.