How does a variable speed drive (VSD) reduce energy costs?

The VSD (similar to a variable frequency drive or VFD) is capable of saving up to 60% of the energy to operate a motor by reducing energy to the work of the motor application. For example, the VSD will slow down the motor when a fan is required to only run at 80% to meet a setpoint. The 20% reduction in speed will save half the energy compared to a motor running at full speed. According to VSD manufacturers, many fan and pump applications have a return on investments in only one year.