As a business owner, you know that many manufacturing establishments rely heavily on nitrogen for daily operations. In fact, nitrogen plays a significant role in the success of today’s biggest industries, like electronics manufacturing and food packaging. Whether your organization falls into one of these categories or another, such as metal and heat treatment or medical device production, you likely understand the laundry list of costs, dangers, and complications that accompany nitrogen delivery. Luckily, these problems can be avoided if you generate your own nitrogen.
Companies in all industries can create nitrogen by investing in an on-site nitrogen generator. These systems require a higher up-front cost than traditional nitrogen deliveries and rentals but offer an exceptional return on investment (ROI). Let’s take a closer look at nitrogen generator benefits and the savings you’ll enjoy by purchasing your own system.
What Is the Nitrogen Generator Return on Investment?
When determining the potential nitrogen generator payback for your business, there are many factors to take into consideration. Of course, the biggest places where you will see savings include your nitrogen delivery costs. How much are you currently paying for nitrogen cylinders? What are your expenses for rental and delivery? As you save on these overhead costs, you will quickly see your nitrogen generator pay for itself.
There is also a “hidden” cost of nitrogen delivery that many business owners tend to overlook when they are considering why they should use a nitrogen generator. This recurring expense is not a direct fee, but rather, money that is thrown away due to wasted gas. Typically, when you rent a cylinder, about 10 percent of the nitrogen in the tank is leftover when you return it to the supplier. Because you pay for 100 percent of the tank’s capacity, this can add up to hundreds of dollars of wasted money over time. This alone is enough reason for many businesses to choose a nitrogen generator over delivery.
Lastly, there are costs associated with employee productivity and safety. Scheduling nitrogen delivery and cylinder pick-up takes up valuable employee time, which could affect your efficiency and revenue. Many employers also suffer expenses due to accidents that occur as a result of employees working with liquid nitrogen. Generators, on the other hand, provide a safe and streamlined way to create nitrogen at your location. These systems utilize the atmospheric air around them to generate gas, meaning there are no dangerous materials involved in the process.
Breaking Down Nitrogen Generator Savings
The value of a nitrogen generator compared to delivery is quite clear, but how do you visualize the concrete figures you need to make a purchase decision? Take a look at this example of savings for a company that operates six days a week, with sixteen-hour days:
- Yearly Bulk Nitrogen Costs – A business that uses 2,880 hundred cubic feet (CCF) of nitrogen in a month spends about $2,300 for the gas alone (at a rate of $0.80 per CCF). After adding in rental and delivery fees associated with nitrogen delivery, the annual cost is over $27,000. This figure is more than 10 times the price of running a generator to produce your nitrogen.
- On-Site Generator Costs – The savings you see with nitrogen generation use become evident when you plug the same figures from the above scenario into the equation. If your nitrogen generator produces 683 standard cubic feet per hour (SCFH), and the average cost of generating power is $0.10 per kWh, it brings your nitrogen gas cost down to $0.0614 per CCF. In this scenario, your yearly cost of running the generator equates to $2,120. Keep in mind that there are annual maintenance costs of around $550, so your total cost would be about $2,700.
In the example noted above, the nitrogen generator will have paid for itself in a mere 17 months. The best part is that after the ROI has paid for the generator, your business will continue to save about $25,000 annually, compared to the cost of nitrogen delivery. Your specific needs may be a bit different from this scenario, but the upfront cost of purchasing a nitrogen generator will still be worth it, as you’ll see thousands of dollars in savings in the coming years.
On Site Gas: Your Number One Source for High-Quality Nitrogen Generators
On Site Gas is an industry leader in the field of nitrogen generation. Our company provides everything a manufacturer may need to make this system fit their operations, from PSA nitrogen generators and membrane systems to generator container systems and refurbished nitrogen generators. To speak with one of our experienced representatives and find out more about nitrogen generator ROI, contact us today.