Reducing electrical system costs

Consider these cost-saving ideas for retrofitting existing equipment and tips for cost savings throughout the new-building engineering process.


It happens too often on projects. You’re working hard on a project when the client decides to check a cost estimate. The next thing you know, the design comes to a screeching halt because the project is over budget. The client is asking for ideas to help reduce construction costs without changing the facility’s function. Simple items begin to get pulled from the project. Fancy architectural finishes, angular rooms, and curved walls are replaced with more cost-effective solutions. High-end light fixtures are replaced with more practical fixtures. As a natural extension to cost-cutting measures, focus then turns to the electrical distribution system because the components are expensive to procure and install. You’re tasked with engineering new concepts for the electrical system. This article presents cost-saving ideas for retrofitting existing equipment and tips for cost savings throughout the new-building engineering process.

Go underground

Install as many feeders and branch circuits underground or in the concrete floor slab as possible. This approach reduces costs in multiple ways. Material costs are reduced by using less expensive PVC conduit instead of higher cost electrical metallic tubing, intermediate metal conduit, or rigid conduit. Eliminating overhead support systems for the conduit runs further reduces material and labor costs. PVC conduit is easier to install than rigid conduit. While the possibly does exist that the feeders and branch circuits may need to be derated in underground or in slab installations, the increased cost of the derated conductors is typically less than the cost of installing the conductors overhead (see Figure 1). An additional benefit of installing the feeders and branch circuits underground or in slab is a potentially compressed construction schedule. While the cost savings can be substantial, this approach requires careful coordination of conduit stub-up locations. This may be difficult if equipment has not already been selected or purchased. Additionally, this approach may reduce future flexibility and impede cable inspection and repair. 

Figure 1: This screen shot shows underground conductor derating calculations performed by an electrical engineering software package. Courtesy: CH2M Hill

Three-wire system

Design a system that uses a 3-phase, 3-wire electrical distribution system (three phases plus a ground) even if there are loads that require a neutral. The neutral conductor is typically the same size as the phase conductors because it is difficult for the designer to have access to all the load information necessary to calculate a reduced neutral size. Additionally, a reduced neutral size might limit load modifications in the future. Therefore, the designer is generally conservative and provides a full-size neutral within the distribution system. This has the effect of increasing feeder conductor costs by about 25%. In reality, the actual cost increase is more because the neutral conductor is a current-carrying conductor and, according to the National Electrical Code (NEC), if there are four current carrying conductors in a conduit, all four conductors must be derated 20%. For every four-conductor feeder, the cost increase is approximately 30% to 40%, or higher.

A more cost-effective solution is to limit the quantity of four-conductor feeders. This is done by designing a 3-phase, 3-wire system. Where a neutral conductor is needed (i.e., single-phase loads), install a delta-wye transformer. This transformer does not necessarily have to change the distribution voltage. For example, rather than designing a 3-phase, 4-wire system to accommodate 277 V lighting, design a 3-phase, 3-wire system and, where required, provide a 480 V delta to 480 V/277 V wye transformer for the 277-V lighting. 

Take another look at aluminum

Be open-minded about alternate conductor types—consider using aluminum conductors. This solution can be cost effective. Aluminum conductors are UL-listed and meet NEC requirements for installation, although some municipalities or states may restrict their use. Aluminum alloys used in today’s conductors are significantly better than the alloys used in days past. The AA-8000 electrical-grade aluminum alloy conductor material does not have the same issues with expansion and contraction as the old alloy that so many people fear. Most equipment terminations are typically dual rated for either copper or aluminum conductors. Terminations can be either mechanical set screw or compression type, although consideration should be given to larger parallel feeders due to the possibility of landing more conductors than the equipment is designed to terminate. Additionally, voltage drop on aluminum conductors will be greater than that for copper conductors because the resistance per foot of aluminum is higher. Aluminum conductors can be installed in all UL-listed raceway systems, and they can be used for service entrances, feeders, and branch circuit wiring. Insulation types for aluminum conductors allow installation in both wet and dry locations and are sunlight resistant. 

Another option is to use a combination of copper and aluminum conductors within the project. Consider designing all feeders rated less than 250 A and branch circuits with copper. Specify feeders rated more than 250 A to be aluminum. Using this approach, a 400 A, 3-phase, 3-wire underground aluminum feeder is about 15% less expensive than a comparable copper feeder. Also, consider specifying aluminum windings for transformers and tinned aluminum bus bars in panelboards and switchboards instead of copper. 

Performance vs. detailed design

Specifications for circuits and conduits should be rule-based, allowing the electrical contractor to choose where to combine circuits and where to route conduits. While the engineer can prepare project documentation indicating circuiting and routing, generally it is not necessary. Allow the electrical contractor to choose the best routing options based on source/load locations, building types, construction sequencing, and sharing of conduit supports. The designer may still need to define routing zones to avoid cross-discipline routing conflicts. 

Allow the electrical contractor to combine circuits in a conduit and share neutral conductors where appropriate. Circumstances where circuits must be installed in a specific manner or conduits must be routed in a very precise location should be detailed in the design documents. Rule-based circuit and conduit routing allows the contractor to provide the best route with the least amount of labor and materials. This also has the benefit of allowing design team members to focus their time on the critical circuit and conduit coordination issues rather than noncritical issues. 

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TOM , TX, United States, 03/06/13 09:06 AM:

Some utilities require a 4 wire incoming service even when there are only 3 wire motor loads.
PRASAD , GA, United States, 03/06/13 10:25 AM:

Interesting article !
JASON , SC, UNITED STATES, 12/10/14 03:47 PM:

In all of my design implementations, I found that the cost of going overhead is more expensive. The addition of supports do not typically outweigh the de-rating and the labor that is required to install the underground duct with the conduits and the spacers and the bare ground in a duct. The overhead cable trays also cuts down in pulling the cable from point "A" to "B". I am of course speaking from an industrial sector. In a commercial sector this comment may not be valid. Also the aluminum cables are typically bigger than their copper conterparts so the raceway sizes will have a cost impact.

The Al vs Cu is very contraversial. I have some clients that are so set on copper they would request a new lead engineer for even proposing the idea. To date I have not been associated with an Al conductor project, but I have only been in the industrial industry (18 years). Commercial my have more applicable scenarios. 250HP 460V Motor require big Cu wire and Al would need to be even bigger so labor would play a factor.
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