Energy & Sustainability worked example

Equipment Energy ROI Payback with upgrade capital cost of 312,500 $: a worked example

What does the result look like when upgrade capital cost reaches 312,500 $? The full calculation is worked below with real intermediate numbers. an energy manager or finance lead needs to screen an efficiency upgrade before capital approval

The inputs for this scenario

  • Upgrade capital cost: 312,500 $ (raised for this scenario; the documented default is 125,000)
  • Annual utility cost savings: 46,000 $ / yr (unchanged)
  • Annual added maintenance or service cost: 6,000 $ / yr (unchanged)

Working through the calculation

  • Applying the documented formula (Net annual energy savings = annual utility cost savings - annual added maintenance or service cost) to the inputs above produces each figure below.
  • At this operating point the engine returns 7.81 yr for equipment energy upgrade payback, the number this scenario is built around.
  • At this operating point the engine returns 40,000 $ / yr for net annual energy savings.
  • At this operating point the engine returns 312,500 $ for upgrade capital cost.
  • At this operating point the engine returns -112,500 $ for five-year net energy value.

How this compares with the baseline

  • Against the tool's baseline example, where upgrade capital cost sits at 125,000 $ and the headline result is 3.13 yr, this scenario comes in 150% above the baseline at 7.81 yr.
  • A figure at this level is achievable when upgrade capital cost is genuinely sustained, not just peaked for a shift. Simple payback ignores the time value of money, utility-rate escalation, and available rebates or tax incentives, all of which can materially shorten the real payback.

Results at a glance

  • Equipment energy upgrade payback: 7.81 yr (headline result)
  • Net annual energy savings: 40,000 $ / yr
  • Upgrade capital cost: 312,500 $
  • Five-year net energy value: -112,500 $

Run it with your numbers

  • Every input above is editable in the live Equipment Energy ROI Payback calculator, which recalculates instantly and can be shared with the inputs intact.

Last reviewed 2026-05-12.