5-minute read
Executive Summary
Businesses with moderate to high oxygen consumption can reduce long-term oxygen costs by switching from cylinder delivery to an on-site PSA oxygen generator. If your operations depend on a reliable oxygen supply, you may be wondering why your costs keep increasing and how to lower them. We’ll walk you through six easy steps to determine how to lower industrial oxygen costs, promoting efficiency within your business with oxygen you can produce right at your facility.
Table of contents
- Executive Summary
- Why Industrial Oxygen Costs Keep Rising
- Step 1: Identify where your oxygen budget is going
- Step 2: Understand how PSA oxygen generators work
- Step 3: Map your oxygen demand to a generator
- Step 4: Compare total cost of ownership
- Step 5: Evaluate operational fit
- Industries that Benefit Most from On-Site Oxygen Generation
- FAQ’s
- Ready to Lower your Oxygen Costs?
- About NOVAIR USA
Why Industrial Oxygen Costs Keep Rising
You may have noticed a rise in oxygen costs year-over-year. This is because cylinder and liquid oxygen delivery pricing is built on a complex cost structure that is controlled by the supplier. You not only pay for the gas itself, but also the cylinder rentals, hazmat handling, delivery costs, and minimum order thresholds. When demand spikes or fuel prices increase, you may face unexpected surcharges or supply shortages with little warning.
For businesses that rely on a continuous or high-volume oxygen supply, this model becomes increasingly expensive over time. Delivery contracts escalate annually, and delays or other supply chain disruptions can put your operation at risk.
The limitations of delivered gas supply are well documented across industries. Understanding why PSA systems outperform liquid oxygen delivery is the first step toward a more cost-effective approach.
Step 1: Identify where your oxygen budget is going
Before you can lower your industrial oxygen costs, you need a full view of what you’re actually spending. Create a breakdown of your last 12 months of oxygen costs using these four categories:
- Gas cost per unit (per cylinder, per liter, or per cubic foot)
- Cylinder rental fees
- Delivery fees and minimum order charges
- Emergency or off-schedule delivery surcharges
Calculate the sum of these costs and divide by 12 to find a monthly baseline. Any solution options should be measured against this over a realistic timeline, about three to seven years.
Step 2: Understand how PSA oxygen generators work
Pressure Swing Adsorption (PSA) is the technology that allows for oxygen generation in most on-site generators. In this process, ambient air is drawn into the machine and passed through zeolite molecular sieve beds, which adsorb nitrogen and allow oxygen to travel through at high purity levels, typically 93% +/- 3%.
This process runs continuously, producing oxygen at a consistent purity and flow rate that meet your facility’s requirements. The oxygen generation systems run on standard electricity, with minimal additional costs including routine maintenance.
For a deeper look at the technology and how it compares to liquid oxygen in commercial settings, see the benefits of oxygen generators in commercial settings.
Step 3: Map your oxygen demand to a generator
On-site generators are sized to match your actual oxygen consumption. Before determining which oxygen generator works for your business, you will need to define:
- Your required flow rate (liters per minute or cubic feet per hour)
- Your required purity level (varies by application)
- Operating hours per day and days per year
- Whether demand is constant or variable
Each application has different requirements and consumption. For example, aquaculture operations often run oxygen 24 hours a day to maintain dissolved oxygen levels in tanks. Veterinary clinics may have lower continuous demand but require immediate availability. Wastewater treatment facilities typically need high-volume, sustained flow. Each use case has a different sizing requirement, and a correctly sized system avoids both underperformance and unnecessary capital spend.
Step 4: Compare total cost of ownership
Total cost is the main factor when it comes to deciding which oxygen source to go with. Typically, this is where the math shifts in favor of on-site generators for high-volume oxygen applications. There is no end date with delivered oxygen. Often, delivery companies will lock you in to a 5 year or more contract with auto-renewal and additional charges when renewing. With an on-site generator, there is an upfront investment, a payback period, then a dramatically reduced ongoing cost for the foreseeable future.
When evaluating oxygen supply options, consider these important factors:
- Current annual oxygen spend (see Step 1)
- Estimated upfront capital investment of a generator sized to your operation
- Annual generator operating costs such as electricity and maintenance
- Payback period (capital investment divided by annual savings)
Payback periods typically fall into the two to five year range. After that point, oxygen costs are reduced to standard electricity and routine maintenance.
Supply chain risk is also worth factoring in. Cylinder-dependent operations face potential disruption from delivery delays, driver shortages, or regional supply constraints. An on-site generator eliminates that variable entirely.
| Factor | Oxygen Delivery | PSA Oxygen Generator |
|---|---|---|
| Upfront Cost | Low | Higher |
| Monthly Costs | Ongoing | Minimal |
| Delivery Fees | Yes | N/A – None |
| Cylinder Rentals | Yes | N/A – None |
| Fuel Surcharges | Possible | N/A – None |
| Supply Chain Risk | High | Low |
| Oxygen Availability | Supplier-dependent | On-demand |
| Long-Term Cost | Higher | Lower |
Step 5: Evaluate operational fit
A PSA oxygen generator is the asset that requires a physical installation. Before moving forward with your oxygen decision, assess your facility for:
- Available floor space for the unit
- Electrical capacity to support the power requirements
- Access to compressed air
- Proximity to point of use
NOVAIR oxygen generation systems are designed for a variety of industrial and healthcare environments, and are tailored to fit a range of facility types. Discover the full NOVAIR oxygen generator line to understand the available configurations and specs for what fits best in your facility.
Industries that Benefit Most from On-Site Oxygen Generation
On-site oxygen generators deliver the strongest return in operations that consume a continuous or high volume oxygen supply, as well as those in locations where reliable delivery is difficult.
While there are many applications that can benefit from on-site oxygen, common ones include:
Aquaculture and Fish Farming
Dissolved oxygen management is crucial for fish health and harvest yield. The high-volume, continuous oxygen demand makes aquaculture a clear fit for on-site gas generation. Fish farms in remote locations create additional supply risk that delivery creates.
Veterinary Clinics and Animal Hospitals
Oxygen is required for anesthesia for surgical operations, critical care and emergency treatment, and recovery. Vet clinics that rely on delivered oxygen run the risk of running out of their supply when it matters most for their patients.
EMS and Disaster Response
Emergency medical operations need an oxygen supply at all times. Running out of oxygen is not an option when it comes to disasters and emergency situations. Having a continuous supply that fills cylinders or can be brought to the site of the emergency removes delivery dependency in a high-pressure situation.
Wastewater Treatment
Wastewater treatment facilities require a large volume of oxygen to accelerate the aerobic digestion process. Delivery-based oxygen supply introduces cost inefficiency and logistical complexity for larger treatment plants. On-site generation provides a consistent amount of oxygen with predictable costs.
| Speak with an expert to start using on-site oxygen. |
FAQ’s
Savings depend on current oxygen spend and consumption. Most NOVAIR customers see a strong return on investment within just a few months to about a year due to improved operational efficiency and decreased delivery costs.
PSA generators typically produce a range of oxygen purity. NOVAIR PSA oxygen generators produce 93% +/- 3% oxygen. Other types of generator technology may be able to achieve higher purity levels if needed. Speak with a NOVAIR representative to discuss which option meets your purity requirements.
Liquid oxygen cylinder delivery involves recurring costs, often locked into a long-term contract, while PSA oxygen generators require a one-time capital investment with minimal ongoing operating expenses. The total cost of ownership is typically in favor of on-site generation for higher-volume oxygen demands over a three to five year horizon.
Oxygen generation systems require minimal routine maintenance, including periodic filter and sieve bed replacement. NOVAIR offers several preventative maintenance programs to keep your generator running at optimal performance.
Key Takeaways
- Switching from cylinder delivery to an on-site oxygen generator can lower industrial oxygen costs significantly.
- Delivered oxygen costs rise due to complex pricing structured by suppliers, including rentals and delivery fees.
- Understanding how PSA oxygen generators work helps businesses generate oxygen on-site efficiently.
- Evaluating total cost of ownership reveals potential savings and mitigates supply chain risks associated with delivered oxygen.
- Industries like aquaculture, veterinary clinics, wastewater treatment, and more benefit most from on-site oxygen generation due to high and continuous demand.
Ready to Lower your Oxygen Costs?
Find out exactly how much you can save by switching to an on-site oxygen generator by speaking with a US-based representative. NOVAIR USA manufactures industrial on-site oxygen generation systems designed for continuous-duty applications across a variety of industries. Contact our team to discuss your facility’s gas volume, oxygen demand, and how on-site generation fits your infrastructure.
About NOVAIR USA
Headquartered in North Tonawanda, New York, NOVAIR USA, part of NOVAIR Groupe, is an industry leader in on-site oxygen generators for industrial and healthcare applications. NOVAIR has been manufacturing air and gas systems worldwide since 1977. Our reliable, USA-made solutions are designed for safety and predictable operating costs. We also serve multiple healthcare and industrial sectors with our oxygen generators and medical gas equipment.
NOVAIR USA — On-Site Gas Generation Since 1977
