Total Cost of Ownership (TCO)

Total cost of ownership is the full lifetime cost of an asset — purchase plus energy, maintenance, downtime, spares and disposal — not just its sticker price. For energy-intensive equipment like motors and pumps, running cost usually dwarfs purchase cost, so TCO drives better decisions.

TCO counters the trap of buying on upfront price alone. For a motor or pump that runs thousands of hours a year, electricity over its life can exceed its purchase price many times over, so a more efficient (often pricier) unit has a lower TCO. Including maintenance, downtime risk and energy in the comparison is what justifies efficiency upgrades, predictive maintenance and quality equipment.

Related terms

Specific Energy Consumption (SEC) · Predictive Maintenance (PdM)

Related guides

Where this applies

Deciding to rewind or replace a failed motor · Deciding whether to retube a heat exchanger · Adopting a motor management policy