“There is a significant disconnect between those who make decisions regarding industrial capital expenditures, and those who are tasked with managing the costs of manufacturing operations,” said Alex Chausovsky, manager and principal analyst, Motor-Driven Systems and Industrial Automation, at IHS. “Individuals making capital-expenditure decisions when building new industrial facilities rarely, if ever, consider the long-term costs associated with projects."

The means that decision makers consistently make initial purchase price the priority, rather than total cost-of-ownership. Energy efficiency doesn't factor in to the decision-making process.

"Operators that take over these projects after their completion are often faced with much larger energy bills than they would have if the most efficient equipment had been specified during the construction phase of the project," Chausovsky said.

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