Variable frequency drives adjust motor speeds to reduce electricity consumption in factories and buildings. Credit: Danfoss.In 2015, engineers at Toyota’s sprawling auto factory in Georgetown, Kentucky, found a way to save hundreds of thousands of dollars a year on electricity. They didn’t install solar panels or replace the factory’s machinery. Instead, they installed a device that allowed the ventilation fans to slow down when demand was low.
The company fitted 211 electric motors with electronic controllers that automatically adjusted their speed when the factory needed less airflow. The $1.25 million upgrade ultimately saved Toyota more than $700,000 annually in electricity costs. A U.S. Department of Energy case study estimated that the system would reduce the plant’s total electricity consumption by 2.6 percent.
Now, as artificial intelligence drives an extraordinary expansion of electricity-hungry data centers, energy experts believe the same relatively simple technology could unlock a vast, largely overlooked source of energy savings across the United States.
According to a national assessment by Lawrence Berkeley National Laboratory, roughly 52 million motor systems power America’s factories and commercial buildings. Together, they consume about 29 percent of the country’s electricity.
Yet many run inefficiently, using more power than their jobs require. Reducing that waste could help accommodate rising electricity demand, lower industrial energy bills and ease pressure on an increasingly strained power grid.
Why slowing a motor can save so much electricity
The problem is that many electric motors operate at a constant speed even when the equipment they power needs considerably less work.
Consider an office building after employees have gone home. Its ventilation system needs to move less air. Conventional systems may restrict airflow using dampers while the fans continue spinning at full speed. It’s rather like keeping your foot on a car’s accelerator while using the brakes to slow down.
This is where a device called a variable frequency drive, or VFD, comes in. By adjusting the frequency and voltage of electricity supplied to a motor, it can change the motor’s speed to match demand.
The physics makes this particularly attractive for fans and centrifugal pumps. Under favorable operating conditions, reducing their speed by 25 percent can reduce the mechanical power they require by roughly 58 percent.
Some installations can reduce energy consumption by 40 to 60 percent, Neal Elliott, director emeritus of the American Council for an Energy-Efficient Economy, told Canary Media.
The actual savings depend heavily on the machinery in question. A 2021 Berkeley Lab analysis estimated that widespread VFD adoption could reduce overall energy consumption associated with pumps by about 20 percent and air compressors by 29 percent. The estimated reductions for fans and refrigeration compressors were closer to 9 percent.
Despite these benefits, the same assessment found that VFDs controlled only about 16 percent of installed motor horsepower in industrial facilities and 4 percent in commercial buildings. Clearly, there is a lot of room for improved efficiency, which could ultimately free up entire gigawatts of power in the United States, when everything is added together.
A vast energy resource hiding in plain sight
The potential national savings are substantial.
In a 2022 analysis, Berkeley Lab researchers estimated that matching motors more closely to their actual workloads could save roughly 115 terawatt-hours of electricity annually, reducing electricity bills by approximately $13.2 billion. The estimates include both variable-speed controls and appropriately sizing motors for their jobs.
So, why haven’t companies rushed to capture them?
Cost and inconvenience remain major obstacles. Installing controllers requires money upfront, and retrofitting industrial equipment can interrupt operations, which for a busy plant is highly undesirable. Older motors may also require additional electrical protection or modifications.
Building owners and developers often choose cheaper equipment upfront, even when more efficient alternatives could save them money on electricity over time. Even when better options are available, plant managers and engineers still need to be advised and knowledgeable about them. Otherwise, they’ll just keep doing what they’re used to. And that’s all the more true if there’s no regulation forcing them to adopt more energy-efficient measures in their operations.
Technological advancements, however, are making VFD installation more attractive. Cheaper sensors, improved controls and advances in power electronics have reduced some of the engineering challenges that once made variable-speed systems difficult to deploy.
The National Electrical Manufacturers Association has also launched a pilot initiative with equipment manufacturers, utilities and efficiency organizations to measure savings in real facilities. The association hopes those results will persuade utilities to offer more financial incentives for motor upgrades.
The urgency for smarter electric motor use has only increased as data centers expand. A June 2026 Berkeley Lab forecast estimated that data centers could consume 11.8 percent of all U.S. electricity by 2030, with scenarios ranging from 9.5 to 15.3 percent.
“Offset your own power”
Kirk Anderson, an executive at electrical equipment manufacturer ABB, suggested that sufficiently widespread motor upgrades could offset as much as five years of data center electricity growth without additional generation. Despite the lofty claim, not every motor benefits from variable-speed controls, and electricity saved in one location does not automatically solve transmission bottlenecks elsewhere.
Still, Anderson proposed an unusual way to finance the transition: Have large technology companies help factories install the equipment, effectively paying to reduce electricity demand elsewhere rather than building entirely new supplies.
He called the idea “offset your own power,” in a statement according to Canary Media.
Such a program would need careful measurement to ensure that the savings were real, additional and available when the grid needed them.
But there’s real merit to fitting motors with VFDs. While utilities and technology companies spend billions of dollars developing new sources of power, perhaps some of the cheapest opportunities lie in using existing electricity more intelligently.
In thousands of factories and office buildings, the technology to do that already exists. Sometimes, providing more power to the economy begins with making a machine use a little less when demand is lower.
