According to federal data provided by the Energy Information Agency, in 2007, 32% of all U.S. energy was consumed by the Industrial Sector. Since electricity accounted for 33% of the industrial energy usage, the Industrial Sector represents a very lucrative target for energy efficiency upgrades over the next decade.

The electrical industry certainly recognizes the importance of this market. A good example of this is the high priority the National Electrical Manufacturers Association (NEMA) has set for promoting industrial efficiency before Congress and the U.S. Department of Energy’s Industrial Technologies Program (ITP).

Much of NEMA’s effort has the specific goal of stimulating increased government funding for incentives for the replacement of older inefficient motors with new high-efficiency NEMA Premium® electric motors. NEMA’s multi-prong approach is bearing fruit in the form of legislation that would support a “crush for credit” motor rebate program, as well as launch a national assessment of the current electric motor products and market completed by the DOE which would update the last such study done in 1998.

Past NEMA efforts helped shape parts of the Energy Independence and Security Act of 2007 (EISA.07) which includes national motor efficiency regulation that in December, 2010 will replace EPAct efficiency level motors with NEMA Premium® electric motors.

Fortunately, NEMA’s Motors and Generators (MG) Section has helped develop language that has been included in the recently passed House energy/climate bill (HR 2454) and appears in the Senate version, the American Clean Energy Leadership Act (ACELA, S 1462) which will hopefully be voted on soon.

ACELA, S 1462, the Senate’s version states that a major priority of the bill is to: “Revitalize America’s manufacturing industries by boosting their use of clean energy and energy efficiency, so they remain competitive – and we prevent American jobs from being lost overseas – as energy costs rise in the future.”

When EISA 2007 impacts the market later this year, the door will be opened for the manufacturers and distributors of energy-efficient motors to more easily encourage industrial customers to upgrade a more substantial portion of their installed base of outdated, energy-hungry motors. Add to EISA’s mandate the eventual passing of the ACELA bill, and motor marketers would see the lowering of the greatest barrier to broader adoption of NEMA Premium® motors – the higher initial cost for the NEMA Premium® products.

Pending legislative incentives that would boost purchases of NEMA Premium® electric motors:

• HR 2454 includes a “crush for credit” motor rebate program that would provide a $25 per horsepower rebate for the purchase of a NEMA Premium® motor, while providing a $5/HP rebate for the proper disposal of the less efficient old motor.
• Advanced motor technologies tax credit that would provide $120/HP to OEMs and end-users for the substitution of energy-efficient motor systems with adjustable speed capability.
• A DOE assessment of the electric available electric motors and the current motor market.

Currently, the U.S. market for NEMA Premium® electric motors in the 1 to 500 HP range is nearly $3 billion, and they account for something over 25% of all sales. Everyone in the value chain can expect a significant increase in both the percentage of NEMA Premium® motors sold, and the revenue generated by those energy-efficient sales.

This is a great time for distributors to energize their marketing efforts within the industrial organizations that continue to rely on energy-hogging motors systems.