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The ROI of Waste Heat Recovery: Calculating Payback for VAM Chillers in India
🌡️ The ROI of Waste Heat Recovery: Calculating Payback for VAM Chillers in India
Quick Links: Understanding Waste Heat Recovery | Capital Investment | Annual Savings | Real ROI Scenarios | Lifecycle ROI | Decision Framework
Understanding Waste Heat Recovery Economics 🔥
Every industrial facility generates waste heat from boilers, furnaces, diesel generators, or process equipment. VAM (Vapor Absorption Machine) chillers convert this lost energy into productive cooling. The ROI equation:
ROI = (Annual Savings + Hidden Benefits) ÷ Incremental Capital Investment
Capital Investment: What You'll Actually Spend 💰
Complete System Costs (500 TR Example)
- BROAD Exhaust-Fired VAM Chiller: Equipment ₹5.5-6.5 crores
- Heat recovery integration: ₹60-80 lakhs
- Auxiliary equipment: ₹1.2-1.5 crores
- Installation & commissioning: ₹40-60 lakhs
- Total CAPEX: ₹7.7-9.4 crores
Incremental investment vs. standard 500 TR electric chiller: ₹3-3.9 crores – this is what your savings must justify for positive ROI.
Annual Savings: The Revenue Side ⚡
- 💡 Displaced Electricity Costs: 500 TR electric chiller consumes ~1.26 million kWh/year. Savings ₹88 lakhs–1.51 crores depending on kWh rate.
- 📉 Demand Charge Reduction: Peak demand eliminated 900 kVA; annual savings ₹32-54 lakhs.
- 🔥 Generator Efficiency Improvement: Waste heat recovery reduces backpressure, saving ₹4.2 lakhs fuel/year.
- 🔧 Avoided Future Chiller Replacement: Reduces incremental investment, accelerating payback.
Real ROI Calculations: Three Indian Scenarios 🇮🇳
| Industry | System | Annual Savings | Payback |
|---|---|---|---|
| Pharmaceutical, Gujarat | 600 TR exhaust-fired VAM | ₹2.36 crores | 1.53 yrs (18 months) |
| Textile Mill, Tamil Nadu | 400 TR steam VAM | ₹1.52 crores | 1.84 yrs (22 months) |
| Food Processing, Maharashtra | 500 TR hot water VAM | ₹2.04 crores | 1.42 yrs (17 months) |
Lifecycle ROI: The 20-Year Perspective 🌱
- Energy cost avoidance: ₹18.5 crores
- Demand charge savings: ₹5.2 crores
- Carbon credits: ₹2.8 crores
- Avoided replacement costs: ₹2.5 crores
- Total Value: ₹29 crores → NPV ₹20 crores, IRR 35-45%
Decision Framework: When ROI Justifies Investment ✅
- Proceed Confidently: Payback < 3 yrs, Operating hours > 4,000/year, Electricity rates > ₹8/kWh
- Proceed Cautiously: Payback > 5 yrs, Seasonal operation, Small capacity <100 TR
- Reconsider: Payback > 7 yrs, Unreliable heat source, Very low electricity rates
Turn wasted thermal energy into productive cooling, reduce electricity costs, and maximize lifecycle value with BROAD Steam VAM chillers.
BROAD Air Conditioning India Pvt. Ltd. (BROAD India) is a subsidiary of BROAD Group.
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