Simple Calculators: A Smarter Way to do Business

June 1, 2012

Recently, the mechanical insulation
industry developed new tools to help show the direct benefits of mechanical
insulation to the end user. In particular, the development and release of the
Mechanical Insulation Design Guide’s Simple Calculators has the potential to
greatly help the construction industry calculate and share the immediate Return
on Investment (ROI) for properly installing or maintaining mechanical
insulation.

However, like any other new advancement, the basis for
success is how well the new tool can be shared and utilized across the
industry. During a Merit Committee meeting at a recent National Insulation
Association (NIA) Annual Convention, the committee members discussed how to
spread the word of these valuable tools across our industry.

We feel that these Simple Calculators should be shared and
used by insulation contractors, distributors, engineers, facility maintenance
personnel, college and university academia, and even cost accountants.

Yet, the question comes to this: How do we share these tools?
The answer is simple. We, the members of NIA, need to use these tools and share
the knowledge of the benefits with not only our own membership, but to the
greater industry and world as well.

So, as an insulation contractor, I started a campaign of
educating whoever would listen about the impact of the proper and appropriate
installation of mechanical insulation on the energy use and cost for any
facility, no matter how large or small. The core theme for every single
presentation I make to an engineer, facility owner, or even CFO is this:
Mechanical insulation is an investment not an expense! It has a real and
definable Return on Investment and I can prove it!

Here is an example of how using the Simple Calculators can
show decision makers that properly installed mechanical insulation is an
investment that more than pays for itself. In early 2011, my company was asked
to provide pricing to insulate piping and equipment at a Veterans
Administration Medical Center in southern Florida. Due to the small size of the
project, our calculations were less complicated, which made it easier to
explain the cost savings to the client.

Our first task was to do a field take-off, which involves
taking pictures, and measuring the temperature of the un-insulated piping and
equipment.

After we completed our field take-off and prepared an
estimate for each system and piece of equipment, we asked the customer for the
type of fuel used and the approximate cost of that fuel.

Now, we had all the information we
needed to prepare an estimate of the energy and financial savings for our
customer. All that was left to do was input the data into the Mechanical
Insulation Design Guide’s Simple Calculators. For our application, we used the
Energy Calculator for Horizontal Piping located at www.wbdg.org/design/midg_design_echp.php
and the Energy Calculator for Equipment (Vertical Flat Services) located at www.wbdg.org/design/midg_design_ece.php.

For each pipe size, we entered all the
data and printed out the calculator’s findings. Then we repeated the process
for each tank.

Here is an example of the input information we gathered for
one piece of pipe:

  1. Length of pipe run (ft.)100
    ft.

  2. Select Pipe Size, NPS (in.) 1½
    in. pipe

  3. Operating Temperature (Fº) 275
    Fº

  4. Ambient Temperature (Fº) 85
    Fº

  5. Wind Speed
    (mph)8 mph

  6. Select Insulation Fiberglass (0º F to 450º F)

  7. Installed Cost Multiplier .70

  8. Emittance of Surface 0.90 All Service Jacket

  9. Expected Useful Life of  Insulation System (years) 15
    years 

  10. Operating Hours per Year 8,760

  11. Efficiency of Fuel Conversion (%) 80%

  12. Select Fuel Fuel Oil

  13. Cost of Fuel ($/gal) $2.75/gal

As
you can see, the facts sell themselves. By increasing the thickness of the
insulation, the customer receives incredible savings on fuel. As a result, the
customer elected to use 2-inch-thick insulation; and, on the one item above
alone, is saving over $13,000 a year in fuel costs. These figures are based on
early 2011 fuel costs; and since the price of fuel has risen significantly
since then, our customer is enjoying even greater savings now.

Our
calculations determined that the insulation for the entire project would pay
for itself in less than three months and save the hospital $30,000 per year in
fuel costs!

Our
original estimate submitted to the hospital did not include this ROI data.
After a few weeks, when we had not received the purchase order, we added the
ROI data and re-submitted the estimate to the hospital engineer, and asked that
he share it with his CFO. Amazingly, we received the purchase order within four
days!

In
this example, the Simple Calculators allowed us to easily and accurately
determine the immediate and long-term cost benefits of installing mechanical
insulation, and communicate those cost savings to our customer. Ultimately,
using these tools resulted in new business.

However,
these calculators are not just useful for insulation contractors; anyone
interested in reducing costs can benefit from using them. Insulation
contractors, distributors, engineers, maintenance personnel, and managers can
use the Simple Calculators to quickly and accurately determine the potential
energy and financial savings of properly installing or maintaining mechanical
insulation.

Here’s
how: Look for uninsulated or under-insulated piping, vessels, or equipment.
Conduct an evaluation of the equipment that includes temperature measurements
during the take-off, and then use the Simple Calculators to determine the
results.

Whether
you are an insulation contractor competing for a bid or a facility owner trying
to reduce energy costs, the Simple Calculators will help you to achieve your
goals. And by sharing the benefits of mechanical insulation you’re also
promoting the mechanical insulation industry as a whole, thus reinforcing the
message that mechanical insulation is not an expense, but possibly your best
investment.