Air compressors powered by electrical motors will use a surprisingly large amount of energy each and every year of operation. The annual power cost to operate a compressor can equal the initial cost of the unit. The initial purchase price of a 100 horsepower air compressor will range between $30,000 and $50,000 depending on the type and options. The same 100 horsepower compressor operating 6,000 hours a year (a power rate of $0.07 per kW and a motor efficiency of .90) will have an annual power cost of $34,800. You can determine the annual electric power cost of your compressors with this formula. The first step is to multiply the horsepower of the compressor times. 746 times the hours of operation times your power rate (HP x .746 x hours x power rate). Then, divide that number by the motor efficiency. Everyone in the plant should be made aware of the total power cost for operating the compressors. This is especially important for anyone that works with air-operated equipment.