LCC (Life Cycle Cost) of Air Compressor

When investing in an air compressor, the sticker price is just the beginning of the story. Over time, costs associated with energy use, maintenance, downtime, and more add up—and often far exceed the initial purchase cost. Understanding the Life Cycle Cost (LCC) of an air compressor enables you to make strategic investment decisions, optimize operational efficiency, and reduce total ownership cost.

This article explains what LCC means for an air compressor, the components of the cost, how to calculate it, and additional concepts like Life Cycle Profit.

What Is Life Cycle Cost (LCC)?

Life Cycle Cost—often abbreviated as LCC—refers to the total cost of owning and operating an air compressor over its useful life. It is commonly used as a comparison tool when choosing between different products or system designs that fulfill similar functions. An LCC analysis helps organizations evaluate trade-offs beyond the purchase price.

In particular, LCC can:

• Guide decisions in procurement (choosing more efficient or durable models)
• Assist in conversations with subcontractors, customers, or regulators regarding system characteristics
• Support environmental decisions by revealing operational impacts
• Reveal that a cheaper compressor today may cost more in the long run

However, LCC has its limitations: it is based on estimates, relies on current knowledge and assumptions (e.g. about energy prices), and does not inherently capture “soft” values like production safety or reputation.

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Basis for LCC Calculations

When constructing an LCC model, the following components are typically included:

1. Capital Expenditure (CapEx) — purchase of the compressor itself, plus installation costs
2. Operating Costs (OpEx) — primarily energy consumption during operation
3. Maintenance & Service Costs — routine maintenance, parts replacement, labor, downtime costs

These combined costs over a defined period form the LCC.

Because many variables are uncertain—especially for future years—LCC is often a qualified estimate. It is influenced by factors like evolving energy prices, changing maintenance practices, and the actual condition of equipment over time.

How to Calculate the LCC for an Air Compressor

A straightforward formulation is:

Life Cycle Cost = Initial Investment + Lifetime Maintenance Costs + Lifetime Energy Costs

Each term is critical to the total cost.

Below is a breakdown of each component and what to watch out for:

Component	Key Considerations	Why It Matters
Initial Investment	Purchase price of the compressor Installation costs (foundation, piping, wiring) Site modifications or extra infrastructure	A lower upfront cost is sometimes tempting, but can lead to higher downstream costs (e.g. due to inefficiencies or added installation complexity).
Maintenance Costs	Scheduled service (filters, oil, parts) Unscheduled repairs Labor cost Service contracts vs in-house maintenance	These costs accrue over years and vary by manufacturer, quality, and service intervals.
Energy Costs	Electricity consumption based on compressor efficiency (kW per unit output) Load profiles (full load, part load, idle) Hours of operation	Energy is frequently the largest component of operating cost. A more efficient compressor often saves more energy over time, offsetting higher initial cost.

Life Cycle Profit (LCP)

In addition to costs, Atlas Copco introduces the concept of Life Cycle Profit (LCP), which accounts for gains such as energy recovery and reduced rejects or downtime.

When calculating LCP, one should consider:

• How equipment condition at end of life affects value (e.g. whether restoration is needed)
• Potential for energy recovery systems
• Reduction in rejects or quality losses
• Extended lifetime through preventive measures

The calculation model should be tailored to the specific compressor type, duty cycle, and production environment.

Practical Steps & Best Practices

To make your LCC analysis robust and useful, consider the following:

1. Use actual data from comparable compressor installations
   Collect historical energy consumption, maintenance costs, and failure rates.
2. Collaborate across stakeholders
   Involve procurement, operations, maintenance, and suppliers in building the model.
3. Adjust for local variables
   Factor in local energy prices, labor rates, environmental conditions, and regulation.
4. Include installation costs in upfront investment
   Don’t neglect piping, wiring, structural foundations, space modifications, etc.
5. Model scenarios
   Run sensitivity analyses (e.g. “what if energy cost rises by 10%?”, “what if downtime increases 5%?”)
6. Update model over time
   As real data accumulates, calibrate your estimates; re-evaluate when major changes occur.
7. Consider “soft” and hidden costs/benefits
   Safety, production quality, downtime risk, and reputational impact may matter as much as hard costs.

Example (Illustrative)

Below is a simplified hypothetical example to illustrate how LCC might play out:

Year	Energy Cost (USD)	Maintenance Cost (USD)	Cumulative Cost
0	—	0	$50,000 (capital + installation)
1	8,000	2,000	60,000
2	8,200	2,100	70,300
3	8,400	2,200	80,900
4	8,600	2,300	91,800
5	8,800	2,400	103,000

In this scenario, by year 5 the total investment plus operating and maintenance costs sum up to ~US 103,000. If a more efficient compressor costs US 5,000 more upfront but saves US 1,000/year in energy, its LCC may become lower over the lifetime. So calculating the life cycle cost can help you choose the right air compressor.

Why LCC Matters in Practice

• Better decision making: You can compare options on a total cost basis rather than just first cost.
• Energy savings: Identifying energy as a major cost encourages selection of high efficiency compressors.
• Long-term budgeting: Helps plan for maintenance, spare parts, refurbishments, or replacements.
• Risk management: Encourages evaluation of downtime risk, reliability, and residual value.
• Sustainability: Lower operating costs often go hand-in-hand with lower environmental footprint.

Reference

1. Life Cycle Cost of a Compressor – https://www.atlascopco.com/en-us/compressors/wiki/compressed-air-articles/compressor-life-cycle-cost