Old, inefficient motors can be a significant source of energy waste, but replacing them often comes with high upfront costs.

To address this, a subsidy or scrappage scheme can incentivize businesses to upgrade their motor systems. Subsidies should prioritize projects identified in energy audits with significant energy-saving potential, such as installing Variable Speed Drives (VSDs), even if they aren’t immediately economically attractive.

Careful design of subsidy rates is crucial to deter free-riders and ensure the program supports genuine improvements.

Such schemes can drive widespread adoption of efficient technologies, reduce energy consumption, and lower operational costs.