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On-Demand Industrial Ventilation System as an Investment

Updated: Jul 23, 2022




Capital Expense or Investment?


Having been in the dust collection and industrial ventilation space for over two decades, here is a very common roadblock that companies tend to encounter - how to justify the cost of an On-Demand Industrial Ventilation System. Often, the operators at manufacturing companies get sold on the benefits of an on-demand system but are unsuccessful in getting management approval for the purchasing decision. The potential savings that an Ecogate On-Demand System can make the financial decision a no-brainer after appropriate analytical consideration.


In this article, we’ll break down how the purchase of an Ecogate On-Demand System is actually a nearly guaranteed investment, unlike many others that come with extensive risk.



Easy to Make Investment


If your bank were to offer you a $200,000 Certificate of Deposit that paid 35% with a 20-year life we can all see how logical the decision would be to purchase the CD and anxiously wait for the tremendous return on our investment. If you didn’t have the cash available, you could easily justify securing a loan from another institution for an interest rate of say 7% annual interest and still have a net return of 28%. This hypothetical financial decision, presented as shown, is very easy to make.



How an Ecogate System Makes Financial Sense


While the previous Bank CD example is obviously too good to be true, many Ecogate users are benefitting from financial returns at this level or higher. How is how this is possible?


Incentives

Ecogate customer savings can often start before the installation of the project does. There is very often some sort of a capital investment rebate offered by local or national suppliers of electricity. We’ve seen many projects with substantial rebates offered by the electricity supplier ranging from 10-40% of the total cost of the project. Ecogate can assist you in finding and facilitating any rebate you may qualify for.


Profit Margins

Capital expenditures associated with the products that a business manufactures and sells are perceived as “good news/bad news”. Good in that this often means expansion is needed but bad in that who wants to spend more money! It is possible to view the addition of an Ecogate system to this expansion as more bad news in that it is not MANDATORY for the expansion and could be perceived as a means to save some capital investment money.


What needs to be kept in mind though is that an Ecogate system will reduce the cost of electricity for the life of the system generating an overall reduction in cost (net savings). The time frame to be considered needs to be multi-year not exclusively the day of purchase. When in doubt it helps to remember the old adage - “ a penny saved is a penny earned!”


When we say that an Ecogate system can save you on average 60% of your dust collector’s electricity bill, what we’re really saying is that an Ecogate system can earn you around 60% of your dust collector’s electricity bill - 60% saved is 60% earned.


Higher profit margins are what every business aims for. To achieve this there are two approaches.



Increase sales and/or lower costs. While your other capital expenditures can help you increase sales, an Ecogate On-Demand system can help you lower your costs, and thus work towards the same goal - higher profit margins!


Equipment Lifecycle

A typical dust collection system has a life cycle of 20-30 years, that’s plenty of years of an Ecogate system paying you every month. Beneath the surface, that’s also 20-30 years of maintenance costs! You’ve already spent a lot of money on your equipment and machinery, you shouldn't be spending more than you need to on maintenance.


Machines don’t last forever, therefore the goal becomes to make them last as long as possible before the inevitable higher maintenance costs arise. An Ecogate On-Demand system will not only make your entire system more efficient but will also offer you workstation utilization data to help you do preventative maintenance. Here’s an article covering this in more detail - spoiler, the hidden maintenance costs can be higher than everything we’re discussing here.


Flexibility

We talked about capital expenditures and for the most part, they’re needed to grow your business. However, there are definitely some instances where they are not needed, and having the option to skip on a capital expense could mean thousands of dollars back into your