Variable frequency drives (VFDs) also called variable speed drives or inverters work to electrically change the speed of a motor. There is a technical explanation of how this is done using terms like vectors, flux, feedback,motor slip, etc. There is also a practical way to understanding how they work and how they help save energy. Since we want to know how to save money, this is the route we'll take.
Motors are everywhere in commercial and industrial facilities. Fans, pumps, conveyors, air conditioners, air compressors are all driven by motors, and the list goes on. Most of these devices are sized for maximum conditions such as maximum flow rate for a pump or fan, maximum output for an air compressor and so on. In the old days these devices normally ran at full capacity (meaning full load and maximum energy consumption). The output was then throttled in some way with valves, dampers or bypasses. This was a very inefficient way to operate and this is why the VFD is such a wonderful device. It helps precisely match the motor speed with the needed output.
Typical motors in the US run at a frequency of 60 hertz or 60 cycles. This is the normal alternating current frequency for US power plants. Motors are designed to run full speed at 60 hertz. Slower speeds are directly proportional to the AC frequency fed to the motor. So at 30 Hz the motor is running at half speed and so on. As the name implies, it is the job of the variable frequency drive (VFD) to alter this frequency and change motor speed as needed.
VFD's can work in two ways, manual or automatic. In manual mode the operator has to manually adjust the motor speed by manually selecting the frequency setting. This works fine for speeds that infrequently or never change. Settings such as conveyor speed, a summer and winter fan speed, etc. are good examples of when a manual speed change works fine.
In automatic mode, electronic controls constantly monitor conditions and adjust the VFD accordingly. For example it may monitor pump pressure and automatically adjust speed to meet the pressure set point. This setting requires some additional controls and control feedback but, when set up properly, the speed control is remarkable.
VFD's save money (and potentially lots of it) by running the motor only at what speed is required. No more running with the gas pedal at full throttle and adjusting the speed with the brakes! We now have a cruise control that tells the motor to only do the work required and no more.