a. Scope of the Variable Frequency Drive

This guide has been developed as an overview of Variable Frequency Drive (VFD) technology to assist in the effective understanding, selection, application, and operation of VFDs. In this guide, the word “drive” refers to the electronic VFD.

This guide does NOT cover other Variable Speed Drives (VSDs) that have mechanical or hydraulic controls.
The primary focus of this guide is for ‘off-the-shelf’, low voltage VFDs used in conjunction with AC, polyphase, induction motors in the factional to 500 horsepower range that are:

  • 600V or less
  • IGBT PWM (pulse width modulated using insulated gate bipolar transistors)
  • Commercially available

Engineered products for special and large motor applications are not included.

Selecting the proper VFD for your application is best achieved by understanding the technology, your specific load requirements and asking the right question up front. This question might be:

“Does my load profile vary sufficiently to justify a VFD?”

Note: It is strongly recommended that individuals or companies installing VFDs secure the services of a professional specialist qualified in VFDs in order to understand and maximize the available benefits.

Project managers for VFD projects who are not familiar with the technology often undervalue the importance of obtaining the correct data, analysis and up-front engineering that is necessary to thoroughly understand the system.

b. Overview of Variable Frequency Drives

A Variable-Frequency Drive (VFD) is a device that controls the voltage and frequency that is being supplied to a motor and therefore controls the speed of the motor and the system it is driving. By meeting the required process demands, the system efficiency is improved.

A VFD is capable of adjusting both the speed and torque of an induction motor.

A VFD therefore provides continuous range process speed control (as compared to the discrete speed control that gearboxes or multi-speed motors provide).

VFDs may be referred to by a variety of other names, such as variable speed drives, adjustable speed drives, or inverters.

Motor Speed Control

AC (Alternating Current) induction motors are essentially constant speed machines, with a variation of speed from no load to full load of about 2-5%, representing the “slip” of the motor.

The speed of the machine is determined by the frequency of the power supply and the number of magnetic poles in the design of the stator.

Fixed speed motors serve the majority of applications. In these applications or systems, control elements such as dampers and valves are used to regulate flow and pressure. These devices usually result in inefficient operation and energy loss because of their throttling action.

However, it is often desirable to have a motor operate at two or more discrete speeds, or to have fully variable speed operation. The conventional control elements can often be replaced by incorporating variable speed operation using a VFD.

Substantial energy savings can be achieved in many of these applications by varying the speed of the motors and the driven load using a commercially available VFD. Savings include capital costs and maintenance costs associated with these control elements.

The following table gives typical examples of loads and their energy savings potential.

Type Of Load Applications Energy Consideration

Variable Torque Load
- HP varies as the cube of the speed
- Torque varies as the square speed

- Centrifugal Fans
- Centrifugal Pumps
- Blowers
- HVAC Systems

Lower speed operation results in significant energy savings as power to the motor drops with the cube of the speed.

Constant Torque Load
- Torque remains the same at all speeds
- HP varies directly with the speed.

- Mixers
- Conveyors
- Compressors
- Printing Presses

Lower speed operation saves energy in direct proportion to the speed reduction.

Constant Horsepower Load
- Develops the same horsepower at all speeds.
- Torque varies inversely with the speed.

- Machine tools
- Lathes
- Milling machines
- Punch presses

No energy savings at reduced speeds; however, energy savings can be realized by attaining the optimized cutting and machining speeds for the part being produced.

c. Economics

Economics is typically one of the most important factors involved in selecting industrial equipment, but the method of evaluation is not straightforward. Many important economic considerations are often ignored in VFD evaluations.

Potential Energy Savings from Replacing an Inlet or Outlet Damper with a VFD

Airflow Volume (percent of maximum)

Daily Operating Time

Energy Consumed with Damper (kWh/year)

Energy Consumed Using a VFD (kWh/year)

in Energy Consumption (kWh/year)





18 500
29 300
61 700
63 300
44 200
34 200

251 200

4 800
9 800
26 800
35 900
32 600
35 200

145 100

13 700
19 500
34 900
27 400
11 600
-1 000

106 100

Reference: Office of Energy Efficiency, Natural Resources Canada, “How Much Will I Save”

Electrical savings are important but there are also other factors that should be included as part of an evaluation of the life- cycle costs of the equipment. For example when pumps or fans are operated at reduced speeds there are often significant maintenance savings due to reduced wear on seals, bearings, shafts, etc. The purchase price is typically less than 10% of the life cycle costs when operating and maintenance costs are considered. Productivity increases from reduced downtimes and reduced waste from optimized process control should also be quantified for significant life cycle cost economics.

Simple Payback Evaluation

The simple payback method is frequently used to determine how long it would take for a piece of equipment to “pay for itself” through saved costs. The payback time is calculated as follows:

Number of Years =
Total Initial Capital Cost
Total Annual Savings

This method should only be used as a risk indicator. Simple payback neglects the impact of a number of important variables, such as tax incentives, inflation, etc.

The following table provides a ‘VFD checklist’ of costs and savings and can help avoid overlooking economic considerations.

Net Present Value Evaluation

Calculating the net present value (NPV) is a better technique for appraising the profitability of an investment. By using the discounted cash flow technique, the NPV takes into account the time value of money. A summary of this approach appears in the following steps:

  1. Evaluate the cost/savings of the factors in the above table for each option that is being considered (for example, purchasing a VFD or purchasing a mechanical drive system instead). Capital costs will be expressed in total dollars; operating expenses will be expressed in terms of time.
  2. Determine the real discount rate that should be used for each time dependent and future-valued factor. For example, for energy savings calculations:
    • x% per annum = nominal discount rate
    • y% per annum = rate at which electricity rates will rise
    • i% = {x/y – 1}%
    As another example, salvage value in years from the present should be discounted using the rate at which the interest rate is expected to rise between now and ‘n’ years.
  3. The factors for each option should be discounted to their present values, using the appropriate discount rate. The number of years used for time dependent factors should be chosen as a reasonable payback period. Present value tables and annuity tables are useful for the discounting process.
  4. The net present value (NPV) of each option is found by summing the costs and savings that have been calculated in present value terms for each factor.
  5. For any option, if:
    • NPV > 0, there is a net gain
    • NPV < 0, there is a net loss
    • NPV = 0, breakeven occurs at the time under consideration.
  6. The option with the greatest positive value of NPV is the most profitable.
  7. The procedure could be repeated assuming different total time periods.
  8. A comparison between two options could also be made by using the relative difference between the options for each factor and finding one NPV.

Capital Costs

Variable Frequency Drive

The cost of Variable Frequency Drives can vary greatly, depending on the options required.

The cost should include:

  • speed controls,
  • start/stop controls,
  • engineering,
  • cable and conduit,
  • foundations,
  • spare parts and any related modifications.

For example, a battery back-up for the controls may be provided for auto restart or shut-down sequences.


The cost of an inverter duty motor should be considered for a new system; however, if the system is being considered for an upgrade to a VFD then the existing motor should be reviewed for size, capacity and efficiency. Usually only high efficiency motors should be considered.

See the CEATI Motor Energy Efficiency Reference Guide for more details.

Power Conditioning Equipment

The cost of any power conditioning equipment, such as harmonic filters, should be included. This includes filters for incoming power to the motor as well as power conditioners for harmonic voltages and currents sent back to the power supply from the drive.


Installation, labour and commissioning charges for the drive, motor and power conditioning apparatus should be determined.

Electrical System Upgrade

Upgrading the electrical system may be necessary if reliability greater than what the present system can offer is required. Potential upgrades include relay protective systems, supply transformer redundancy, transfer switching/alternate feeders, maintenance, emergency staff training and preventive maintenance programs.

Torsional Analysis

A torsional analysis will define the vibration effects of inverter harmonics in the drive train. This should be conducted for large drive applications.

Space Requirements

This includes the cost of any indoor space requirements for the drive and filters, as well as any outdoor space costs, such as those associated with transformers, filters or reactors.


Additional cooling may be required for drive installation. Water cooling may be a much more economical alternative for large applications, although HVAC equipment is often used.

Capital Savings

Use of a VFD may avoid certain capital investments. Examples are gear boxes, control valves, fluid coupling/mechanical speed changing equipment and reduced voltage starters.

Operating Costs and Savings

Electrical Energy and Demand Savings

There may be savings in terms of both energy consumed (kWh) and peak demand (kW) charges. The extent of these savings depends on the specific load profile of the application, the load profile of the overall operation, the local utility’s rate schedule, etc.
Installing a VFD, in addition to the other benefits, will usually reduce the total energy consumed (kWh). Manufacturers and utilities have on-line spreadsheets that can be downloaded, typically at no cost, and used to estimate the electrical savings.
The other element of electrical power cost is the apparent power charge, measured in kVA, which compensates the utility for the peak current that must be delivered during the month. Each utility rate structure is different and contacting your utility can ensure that the correct rates are being used. The figure below illustrates the daily demand (kW) and the apparent power (kVA). The ratio between kW and kVA is the power factor. Most utilities now charge a power factor penalty, i.e., charging for apparent power (kVA) rather than kW.

sample chart showing Demand (kw) and  Apparent Power (kVA)

Figure 1: Demand (kW) and Apparent Power (kVA)
Courtesy of UGS Profiler, Real time monitoring

The most significant factor affecting demand is the power required by the load. Variable frequency drives provide significant savings if the demand can be reduced.

It is also important to keep in mind the actual cost of the kilowatt-hours (kWh) of energy being saved. In the case of fixed price contracts or increasing rate blocks, the kWh saved are the last ones that would have otherwise been purchased and would usually have been charged at the highest price. However some utilities continue to use inverted and/or fixed cost rate structures so the actual cost per kWh is dependent on the utility’s rate structure.

In deregulated markets where the price per kWh varies depending on the supply and demand, each application’s energy savings will be dependant on the electric energy price for that period. For example, the volatile price in Ontario is illustrated below:

sample chart showing Electrical Energy (kWh) and Hourly Ontario Energy Price

Figure 2: Electrical Energy (kWh) and Hourly Ontario Energy Price (HOEP) ($/kWh) Price - Courtesy of UGS Profiler, Real time monitoring

sample chart showing Resulting Electric Energy Cost for 24 hours

Figure 3: Resulting Electric Energy Cost for 24 hours - Courtesy of UGS Profiler, Real time monitoring

Thus it is important to properly evaluate the true benefit of energy savings since using an “average energy cost” can be misleading.

Process Flow and Operational Improvements

Often the installation of the VFD will result in operational improvements and these efficiencies should be factored into the savings.

Elimination of other Mechanical Control Devices

The installation of the VFD may eliminate some mechanical control devices including valves and dampers. The costs associated with the purchase and maintenance of these devices also needs to be included in the VFD savings evaluation.

Advantages of using VFD: Maintenance / Useful Life

The reduction of maintenance and downtime may be quite substantial if an AC variable frequency drive is employed. Contributing factors are elimination of control valves, current-limit feature (prevents motor burnouts caused by multiple restarts) and protection of the motor insulation (it will be shielded from external voltage problems).

Useful equipment life, such as for bearings, can be extended by operating at reduced speeds. Stresses and metal fatigue in the drive train shafts will be lowered.

Improvements to VFD technology and ‘off the shelf’ spares have reduced repair time significantly and have generally not resulted in an operation issues.

Over-Speed Capability

The over-speed capability of variable frequency drives can save considerable operating costs, as well as investment, if increases in production levels occur. For example, the airflow through an existing fan may be increased by retrofitting a VFD to the fan motor, which will allow operation at a frequency higher than an existing 60 Hz rating.

Considerations in applying VFDs (Tips & Cautions)

A variable frequency drive is the most cost effective choice if the duty cycle is more evenly distributed over the entire range of flow rates. Relative energy savings improve if the performance and system resistance curves are steep.

Many potentially good VFD applications are passed up because benefits other than energy savings are overlooked. Frequently, process control and reliability far outweigh efficiency related benefits to the user. By using the average cost of energy in savings analyses, the savings can be understated for variable frequency applications. Instead, both the energy and demand charges of the local utility’s rate schedule should be used.

For variable torque loads, the variable frequency drive savings can be significantly greater since the horsepower varies proportionally to the cube of the speed. For horsepower applications above 25 HP, installation costs are usually comparable to the total capital cost for the drive. Below 25 HP, installation costs may be more than the cost of the drive.

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