Reduce compressed air costs in your business

Last updated: 6 September 2022

Compressed air equipment can lose up to 40% of the energy supplied.

But there are ways you can reduce the amount of energy lost in the process, which can:

  • lower your electricity bill
  • cut your maintenance costs
  • decrease your greenhouse gas emissions
  • improve working environment.

The figures on this page come from our Boosting Business Productivity program. We worked with more than 300 businesses to explore their energy use and minimise their energy cost.

Assess your current energy use

Install a power meter on compressed air equipment to track and monitor energy use. Also install an air flow meter to track and monitor compressed air use. This data can be used to identify where you can save energy.

The best way to understand how much compressed air contributes to your electricity bill is by getting an energy audit. An energy auditor can review your energy bills and the way your business operates, to identify where you’re losing energy and what you can do about it.

Find an energy auditor near you.

It’s always good to seek advice and knowledge from similar businesses and industry groups.

Read about businesses like yours.

Ways to reduce compressed air costs

1. Schedule regular maintenance

Air leaks can lose up to 50% of the compressed air produced by your compressor. A 6mm air leak can cost over $6000 a year in energy costs.

Routine maintenance will minimise air leaks. A good time to check for leaks is after hours when equipment isn’t running.

Also check there is not water build-up in the system, and that the compressor run-time meets the manufacturer’s best practice guidance.


On average, annual regular maintenance will:

  • costs less than $4600
  • save nearly $60,000
  • take less than 1 year to pay back
  • save more than 45 tonnes of greenhouse gas emissions.

2. Install timers and operational controls

Operational controls do the manual work for you so you don’t need to rely on staff or use more energy than needed.

Operational controls can switch the system on or off for you. If you have multiple compressors, schedule them so that they operate in the most efficient way according to the load.

Consider whether you can lower the system air pressure for the task at hand. Often, for every 100kPa lower, you can save 8% energy and cost.


On average, installing timers and operational controls will:

  • cost less than $6000 to implement
  • save more than $5800 annually
  • take 1 year to pay back
  • save more than 45 tonnes of greenhouse gas emissions.

3. Install a variable speed drive

Idling compressed air systems can use up to 40% of full load.

A variable speed drive can adjust the speed of the compressor according to the air demand. That way, you’ll only use the energy needed.


On average, installing a variable speed drive will:

  • cost less than $25,500 to implement
  • save over $8000 annually
  • take 3 years to pay back
  • save more than 95 tonnes of greenhouse gas emissions.

4. Upgrade equipment

Make sure your compressed air system is maintained regularly before considering upgrading to new equipment.

If you have a well maintained compressed air system and it’s still short of compressed air, or it’s more than 10 years old, it may be time to upgrade to a newer more energy efficient system.


On average, upgrading compressed air equipment will:

  • cost less than 16,500 to implement
  • save more than $4500 annually
  • take less than 4 years to pay back
  • save nearly 30 tonnes of greenhouse gas emissions.

For more information about managing the energy use in compressed air systems, download the NSW Office of Environment and Heritage guide to compressed air guide (PDF, 1.95MB).

What else can you do?

Get recommendations for an energy upgrade project

Our energy upgrade tool does the hard work for you. It recommends opportunities and funding options, and calculates return on investment for your business.

Use the energy upgrade tool.

Upgrade compressed air equipment at a discount

You may be eligible for discounted energy-efficiency products and services, including compressed air projects, through the Victorian Energy Upgrade program.

To get started, contact an accredited provider.

Then, you can pay for the remaining cost with energy-specific finance.

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