Short answer: A single 1/8-inch compressed air leak on a system that runs around the clock costs about $3,000 a year in electricity at the August 2026 average Texas industrial power price. Leaks are rarely alone. The Compressed Air Challenge (CAC) says a typical plant that hasn’t been well maintained will likely have a leak rate of about 20% of its compressed air production capacity. The best time to measure leaks is when the plant is quiet, so if your facility has a planned holiday shutdown, that’s an ideal window.
How much air plants lose to leaks
The CAC’s leak fact sheet (revised May 2026) and the U.S. Department of Energy (DOE) compressed air sourcebook give the same benchmarks:
- Leaks can waste 20 to 30 percent of a compressor’s output.
- A typical plant that hasn’t been well maintained will likely have a leak rate of about 20 percent of total production capacity.
- Proactive leak detection and repair can bring leaks to under 10 percent of compressor output.
That matters because compressed air is expensive to make. A DOE compressed air tip sheet says a typical industrial facility uses about 10% of its electricity to generate compressed air, and some use 30% or more. The same tip sheet notes that the overall efficiency of a typical compressed air system can be as low as 10–15%: running a 1-horsepower air motor at 100 psig takes roughly 7 to 8 horsepower of electrical power at the compressor. Every cubic foot that leaks out carries that cost with it.
What one leak costs at Texas power prices
The CAC’s 2026 fact sheet prices leaks at $0.10 per kWh, assuming constant operation and an efficient compressor. Texas industrial power is cheaper than that on average. The U.S. Energy Information Administration (EIA) reports an average of 7.21¢/kWh for Texas industrial customers in August 2026, up from 6.42¢ in August 2025. Scaling the CAC figures to that price gives:
| Leak size | Annual cost (CAC 2026, $0.10/kWh) | Est. annual cost at 7.21¢/kWh (TX avg.) |
|---|---|---|
| 1/16 inch | $1,046 | about $750 |
| 1/8 inch | $4,190 | about $3,000 |
| 1/4 inch | $16,764 | about $12,100 |
To estimate your own numbers, multiply the CAC figure by your blended rate in dollars per kWh, then divide by 0.10. If your air system is only pressurized part of the year, scale by the share of hours it holds pressure. Your actual tariff, demand charges and compressor efficiency will move the result, so treat these as estimates, not quotes.
For example, ten 1/16-inch leaks at quick-connects and hose fittings around a shop floor would add up to roughly $7,500 a year at the Texas average rate under the CAC’s assumptions.
The costs that don’t show up on the power bill
Electricity is only part of it. The CAC and DOE point to several other ways leaks cost money:
- Lower system pressure. Leaks drag system pressure down, which can make air tools work less efficiently and slow production.
- Higher pressure settings to compensate. It’s tempting to raise the compressor’s pressure setting to make up for the loss. DOE’s rule of thumb for systems around 100 psig is that every 2 psi increase in discharge pressure raises energy use by about 1 percent at full output. Higher pressure also makes every leak and unregulated end use consume more air, so DOE recommends looking for alternatives, such as reducing pressure drop, before raising discharge pressure or adding compressor capacity.
- More run time. Leaks make compressors run longer and cycle more, which shortens the life of almost all system equipment and can add maintenance and unscheduled downtime.
- Unneeded equipment. Leaks can push a plant into adding compressor capacity it doesn’t actually need.
Where leaks hide
According to the CAC, leaks can come from any part of the system, but the most common problem areas are:
- Couplings, hoses, tubes and fittings
- Pressure regulators
- Open condensate traps and shut-off valves
- Pipe joints, disconnects and thread sealants
In many cases, leaks are caused by bad or poorly applied thread sealant, so the fix can be as simple as tightening or re-making a connection. Other leaks mean replacing a coupling, a hose, a drain or a section of pipe. Equipment that’s no longer in use should be isolated with a valve so it can’t leak. Condensate drains deserve a close look too; our post on condensate management covers what should happen to that water once it leaves the drain.
Use a holiday shutdown to measure leaks
The CAC describes two ways to estimate leakage, and both need a system with no production demand on it. The first requires all air-operated equipment to be turned off, and the second only isolates leakage if nothing else is drawing air. That makes a planned shutdown an ideal time to run either one.
Method 1: Load/unload timing (for compressors with start/stop or load/unload controls)
- Turn off all air-operated equipment, but leave the compressor running.
- Because only leaks are drawing air, the compressor will load and unload. Time several on-load periods (T) and off-load periods (t), in minutes, and average them.
- Leakage (%) = (T × 100) ÷ (T + t)
For example, if the compressor runs loaded for 1 minute and then sits unloaded for 4 minutes, leakage is 1 × 100 ÷ 5 = 20% of compressor capacity. The CAC says leakage should be under 10% in a well-maintained system.
Method 2: Pressure decay (for other control types, using a pressure gauge downstream of the receiver)
- Estimate total system volume (V, in cubic feet), including receivers, air mains and piping.
- Bring the system to normal operating pressure (P1, in psig). Then, with the compressor no longer supplying air, time (T, in minutes) how long it takes to fall to a lower pressure (P2) of about half the operating pressure.
- Leakage (cfm of free air) = V × (P1 − P2) ÷ (T × 14.7) × 1.25
The 1.25 factor corrects the result to normal system pressure, because leaks flow less as pressure falls. The CAC recommends running these tests quarterly as part of a regular leak detection and repair program.
Compressed air leak detection and repair
Air leaks are almost impossible to see, so other methods are needed to find them. The CAC calls an ultrasonic acoustic detector the best way, because it picks up the high-frequency hiss of escaping air. The DOE sourcebook adds that these detectors filter out background noise in the audible range, so they can be used while equipment is running. Brushing soapy water on suspect joints is reliable too, but it’s slow.
A leak program pays off when it’s treated as a process, not a one-time event:
- Tag and document each leak as it’s found, with its location, type and estimated size.
- Fix the biggest leaks first to get the biggest savings.
- Before any repair, isolate and bleed down that section and follow your site’s lockout/tagout procedure (OSHA 29 CFR 1910.147).
- Once leaks are fixed, re-check the compressor controls so the system actually captures the savings.
- Re-test to confirm the drop in leakage, and repeat the leak test quarterly.
Fixing leaks can also keep you from buying compressor capacity you don’t need. If you’re also dealing with moisture or pressure problems, our post on how detailed air processes save your plant more than just energy covers the broader picture.
How IOS can help
Innovative Oil Solutions runs detailed air audits with sonar leak detection. We find leaks, review pressure settings, air treatment and compressor sizing, then fix what’s wasting power. We do this work in San Antonio, Austin, Corpus Christi, Houston and Dallas–Fort Worth, out of our New Braunfels headquarters. If a holiday shutdown is on your calendar, it’s a good time to schedule a leak survey alongside your regular compressor service and preventative maintenance.
Request an Air Audit Call (830) 214-6544
Innovative Oil Solutions · 1965 Post Rd Ste 107, New Braunfels, TX 78130 · (830) 214-6544
Sources
- Compressed Air Challenge, Compressed Air Systems Fact Sheet #7: Compressed Air System Leaks, May 2026, Rev. 1. compressedairchallenge.org (PDF)
- U.S. DOE and Compressed Air Challenge, Improving Compressed Air System Performance: A Sourcebook for Industry (Compressed Air System Leaks and Pressure Drop fact sheets). energy.gov (PDF)
- U.S. DOE, Compressed Air Tip Sheet #1: Determine the Cost of Compressed Air for Your Plant. energy.gov (PDF)
- U.S. Energy Information Administration, Electric Power Monthly, Table 5.6.A, Average Price of Electricity to Ultimate Customers by End-Use Sector, by State (Texas industrial, August 2026 and August 2025; released October 23, 2026). eia.gov
- 29 CFR 1910.147, The control of hazardous energy (lockout/tagout). ecfr.gov
Cost figures at the Texas rate are IOS estimates scaled from the CAC table (CAC cost × 0.721). Examples are illustrations, not measurements from a customer site.