Simple payback
Annual saving (₹) = (annual kWh of unit A − annual kWh of unit B) × effective tariff (₹/kWh). Simple payback (years) = extra purchase cost of B ÷ annual saving.
If maintenance costs differ, for example because one design needs less frequent condenser cleaning or uses longer-life parts, add that difference to the annual saving. Keep it honest; include only differences you can justify.
Flip it: the most you should pay extra
Instead of asking whether a quoted premium pays back, decide the payback period you accept, then: maximum extra price = annual saving × accepted payback years. A business that wants its money back within three years and saves ₹5,400 a year should not pay more than ₹16,200 extra for the efficient unit. Anything less is a good buy on energy alone.
Worked example
Assumptions: unit A uses 2,100 kWh a year and unit B 1,500 kWh a year, both measured or rated under the same conditions; the difference is 600 kWh a year. Tariffs below are assumptions to show the effect; use your own effective rate from your bills.
| Assumed tariff | Annual saving | Max premium, 2-year payback | Max premium, 3-year payback | Max premium, 4-year payback |
|---|---|---|---|---|
| ₹7/kWh | ₹4,200 | ₹8,400 | ₹12,600 | ₹16,800 |
| ₹9/kWh | ₹5,400 | ₹10,800 | ₹16,200 | ₹21,600 |
| ₹11/kWh | ₹6,600 | ₹13,200 | ₹19,800 | ₹26,400 |
Make sure the comparison is like-for-like
- Same capacity and temperature band: a smaller cabinet uses less energy because it is smaller, not because it is better.
- Same test or site conditions: kWh measured at a cool test ambient cannot be compared with kWh from a hot kitchen. For deep freezers carrying BEE star labels, comparing labelled figures puts models on the same test basis.
- Same ambient rating: a unit that cannot hold temperature in your 43 °C summer is no saving at any price.
- Same usable space: compare cost per usable litre or per shelf position if the units differ.
Beyond simple payback
Simple payback ignores what happens after the payback year. If you expect to keep a unit for, say, eight years (an assumption, not a typical life), lifetime saving = annual saving × 8. At ₹5,400 a year that is ₹43,200 before any change in tariff. Electricity tariffs in India have generally risen over time, which increases savings, but do not assume a rate of increase you cannot support.
If you want to account for the value of money over time, discount each year's saving at your cost of finance. For short paybacks the difference is small; for long ones it matters.
Traps that inflate payback claims
- Savings quoted against an old, badly maintained unit rather than a new standard one.
- Energy figures at an unstated or mild ambient.
- Percentage savings without the kWh behind them. Ask for kWh per day or year, at stated conditions.
- Ignoring that the efficient option may need a stabiliser or different service; include any such costs.
Frequently asked questions
- What payback period is reasonable for refrigeration?
- That is a business decision, not an engineering one. Many owners use a period well inside the expected life of the unit, so that savings after payback are real profit. Set the period first, then use the maximum-premium method.
- Does a higher star rating always pay back?
- Not automatically. It depends on how many kWh the better model saves in your conditions, your tariff and the price difference. A unit that runs only lightly saves fewer kWh and takes longer to pay back.
- Is it worth replacing an old unit that still works?
- Use the same method, but the extra cost is now the full price of the new unit less anything you get for the old one, and the saving is the old unit's measured kWh minus the new unit's. Old units that run almost continuously in summer, struggle to hold temperature or need frequent repairs often justify replacement sooner than the energy figures alone suggest.
- Where do I get reliable kWh figures for a unit I have not bought yet?
- Ask the supplier for daily or annual energy at stated test conditions, and for the ambient temperature used. Compare units only on figures measured the same way. Where models carry a BEE star label, that gives a common basis.
