Surge Protection - Is it Better to Rent, or Buy?

Organizations of all types – including businesses, schools, government agencies, and non-profits depend on electronic systems such as fire alarms, security systems, and communication and data information networks. Management knows that if any of these systems are damaged or inoperable for any reason, normal operation instantly becomes more difficult, and in some cases, it may mean shutting down entirely.

Because of this importance, savvy managers look for ways to protect these systems and to decrease the potential for operational disruptions. One potential source of damage to electronic systems is, of course, electrical surges and spikes. Electrical surge events are generated from outside the facility, due to electrical grid switching, lightning activity, and the actions of nearby neighbors such as welding, among other sources. They can also be created internally by inductive loads such as motors in machinery, pumps, and HVAC equipment. Whether they are created externally or internally, electrical surges are much more common than most people believe, and most of these events pass by each day unnoticed by management and staff.

SPDs are an attractive investment

Downtime can be very costly, particularly for large companies and manufacturers; downtime losses are often reported ranging from $20k to over $1M per day. With a typical cost between $100 and $400, SPDs (Surge Protective Devices) are a very attractive investment with a high ROI. For many electronic systems, the cost to install surge protection is usually less than the sales tax on the protected system!

With such an attractive protective investment available, a person might expect that every organization that depends on electronic systems for their daily operation would have purchased and installed appropriate SPDs. But the reality is that many have not!

Without such protection, these organizations are ‘tossing the dice’ every day, hoping that an electrical surge does not put their operation on hold. The truth is that smaller, daily surges are probably already causing damage to their electronic systems, shortening their life and decreasing their reliability.

Power companies to the rescue!

One particularly interesting development is that some power companies are now offering SPDs on a ‘subscription’ model for their residential power customers – essentially customers are renting SPDs that the power company installs at the facility’s service entrance. The specifics of the arrangement varies by company and location, but here are some typical elements that make up such a program:

• An SPD is installed at the service entry for a monthly charge of $10.
• There is also usually an installation fee between $25 and $50.
• The system is promoted to provide “enhanced protection” for “your major appliances, motors and compressors”. Examples of protected devices include the refrigerator, HVAC, washer and dryer. .
• If you want computers, TVs, or other electronic devices covered for repairs, there is an additional cost – typically $3 - $5 per month

Setting aside for the moment the fact that some of the power surges that damage your electronic systems are caused by the very company that is providing your electricity, is the SPD subscription service a good investment option?

SPDs: Rent vs. Buy

1. The first thing to note is that this service is generally targeted at residential customers, not businesses or organizations.

2. As we have covered in some other blogs and articles, a single SPD at the service entry is far better than nothing, but not the best way to protect the variety of systems and applications in a residence or business facility. The layered approach does a much better job protecting each sensitive system with an appropriately engineered SPD.

3. A quick cost estimate: The first year will cost about $208, based on a $10 monthly charge, a $40 installation fee, and $4 monthly upcharge for protecting electronics. Following years would cost $168, if the cost stays constant. Purchasing an equivalent SPD would cost between $100 and $400, so the rental costs would have paid for the device somewhere between 6 months and two years or so.

Conclusion

There is no doubt that installing surge protection is the simplest and most cost-effective way to maximize the life and reliability of electronic devices, systems, and equipment. Of course, one size does not always fit all situations, which is why professional installers carefully review the existing systems and connections to support an overall protection strategy.

The new SPD subscription service model may fit the need for customers in specific circumstances, much as leasing a house or car may be the best arrangement for certain situations. For more complex residences, and for businesses with specific critical systems that support their operations, it is unlikely that a single SPD at the service entrance will meet the need. In that case, please contact us for a no-commitment review of your situation!