IMS Research, now part of IHS Inc., reports that IE1 Standard Efficiency motors still represent a significant portion of revenues in low voltage (LV) motor markets that are under government-mandated transitions to higher efficiencies.
International Electrotechnical Commission (IEC) standards define motor efficiency as IE1, IE2 and IE3. IE1 has the lowest efficiency, while IE3 has the highest. The global IE1 LV motor market was estimated to be worth $7.5 billion in 2012, which represented 60 percent of the total regulated LV motor market by revenues. Regulatory exemptions that allow motors of lesser efficiency to be produced beyond the required inception dates stated in the legislation have slowed the turnover of both annual sales and the global installed base of motors to IE2 or above. IMS says this has greatly impeded the high-efficiency motor markets from gaining traction and has diluted revenue growth in the global LV motor market significantly.
“From an energy efficiency standpoint, this is the most exciting time in the industrial motors market in the last 20 years,” said Mark Meza, principal analyst for IHS. “However, obtaining the lowest cost solution on the front-end rather than considering the overall cost of ownership of the motor is still the market reality, despite regulatory efforts to rebalance this dynamic.”
Exemptions pertaining to a motor’s defined purpose and its operating environment, namely temperature, elevation, and duty cycle, are being exploited to circumvent the original intent of the legislation, which is to promote the use and installation of more high-efficiency motor types.
IE1 motors are still the dominant motor efficiency class in the European Union and South Korea despite these markets being more than two and six full years, respectively, into the transition to IE2 machines.
A similar dynamic working against the high efficiency motor market can be found in all regulated motor markets around the world, according to IMS.