Replacing your air compressors: an investment that pays off, thanks to Hydro-Québec’s financial support

Often nicknamed the plant’s “fourth utility,” compressed air is one of the most expensive forms of energy in the manufacturing sector. The good news: Hydro-Québec’s Efficient Solutions Program can cover a significant share of the cost of modernizing your compression systems.

In most Québec plants, compressed air powers pneumatic tools, cylinders, conveyors and dust collectors — to the point where it is often mistakenly seen as free. Yet energy accounts for roughly 76% of a compressor’s life-cycle cost, and barely 10% of the electricity consumed becomes useful energy, the rest being lost as heat or through leaks. Aging or fixed-speed equipment can therefore prove very costly, year after year, without anyone noticing.

That is exactly what Hydro-Québec’s Efficient Solutions Program is designed to address: financial support for energy efficiency measures in businesses. Every kilowatt-hour saved contributes to the “2035 Action Plan” and delivers lasting reductions on the electricity bill.

Please note: The funding described in this article is offered through Hydro-Québec’s Efficient Solutions Program and is available only for facilities located in Québec. Similar energy efficiency incentives exist in other provinces — contact us to find out what applies to your site.

Quick wins, before replacing anything at all

According to Hydro-Québec, simple steps — lowering pressure, fixing leaks, keeping up with preventive maintenance — can generate savings of up to 20%. More advanced measures (variable frequency drives, storage, high-efficiency dryers, energy managers, heat recovery) go further still, and that is where the Efficient Solutions Program comes in.

Three ways to fund your project

1. Energy analysis: up to $60,000 to identify profitable projects

This component has your facilities assessed by specialists in order to target the most profitable projects, including your compressed air systems. Paid in two instalments, the support can reach $60,000 when the analysis combines energy efficiency and power demand management.

2. The Simplified Option: more than 200 predefined measures, calculated in a few clicks

For common projects, such as replacing a fixed-speed compressor with a variable frequency drive (VFD) model, the OSE calculation tool lets you assess the eligible support among more than 200 predefined measures and submit the application directly. As of March 31, 2026, the minimum support threshold dropped from $2,500 to $1,000; small businesses can receive up to 90% of eligible costs.

3. The Customized Option: for complex or innovative projects

Redesigning the compressor room, recovering waste heat, installing smart sequencers: the Customized Option targets projects generating at least 25,000 kWh in savings. Support reaches 45¢ per kilowatt-hour saved, up to 75% of eligible costs (maximum $5M), with guidance from a Hydro-Québec technical resource.

First case in point: Fenplast saves more than $20,000 a year

Door and window manufacturer Fenplast was running a compressed air system that had reached the end of its useful life and consumed far too much energy. By working with a specialized partner on both the project and the application to Hydro-Québec, the company secured financial support of more than $57,671 and has since generated recurring savings of roughly $20,072 a year — support that considerably shortened the payback period.

Second case: at Canam, seven compressors replaced by a single unit

At Canam, seven compressors were running in cascade with no centralized control, and significant pressure losses forced the system to operate at a higher pressure than necessary. The upgrade focused on simplicity: a single 200 HP variable-speed compressor now meets the entire demand, on an optimized network. The result: efficiency improved by more than 45% and financial support of $276,436.88, which markedly improved the project’s return on investment.

Where to start?

Before undertaking any work, three reflexes: confirm your project’s eligibility, estimate the support with the OSE tool, and document the current consumption of your equipment (pre-project measurement may be required). A well-designed, well-maintained and well-funded system means a lighter bill and a more competitive plant.

Specialized support, from analysis to grant

Replacing a compressor remains a technical project: it pays to have the right guidance. A specialist in compressed air systems, Comairco is a Hydro-Québec partner and the company that submits the largest number of compressor replacement applications to the program in Québec. Since 2019, its engineering team has opened 83 projects, 41 of them completed: 22,579,161 kWh saved and $6,171,293 obtained for its clients.

Expertise recognized by Hydro-Québec itself, which in a December 2024 letter highlighted the team’s outstanding contribution and the quality of its advice: the businesses it supported saved more than 1 million kWh in 2024 alone.

Learn more: Efficient Solutions Program – Hydro-Québec

Contact: Louis Masse, Eng., Engineering Supervisor, Québec & Atlantic, Comairco / lmasse@comairco.ca / comairco.com

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Replacing your air compressors: an investment that pays off, thanks to Hydro-Québec’s financial support