Ask in a meeting how much an hour of downtime costs and you’ll hear estimates that vary tenfold. Each department responds based on its own pain, and no one has the company’s number.
Without this number, any discussion about investing in energy becomes a personal preference. With it, the calculation resolves itself. Follow along to see the six components that make up the **cost of downtime** and what it determines in practice.
Executive summary
- The cost of downtime has six components, and lost production is usually the smallest of them.
- The number changes by line and by shift, so the company average is misleading.
- With the number in hand, the decision about contingency stops being an opinion and becomes arithmetic.
Index
- Why the estimate is usually wrong
- The six components that make up the calculation
- How to calculate in an afternoon
- What the number determines
- Frequently asked questions about the cost of downtime
- Conclusion
Why the estimate is usually wrong
The calculation people do in their heads is revenue divided by hours worked. It’s quick and usually ends up being too low.
The error has two sources. The first is that it ignores what happens outside of production, and the second is that it treats all hours as equal, when peak hours and midnight shift hours cost very different things.
There is a formal method for this
The calculation of the impact of a disruption has a name and a standard. The **business impact analysis**, known by the acronym BIA, is the process that measures the effects of the disruption of critical processes and defines how long the non-recovery becomes unacceptable.
It is part of the continuity management system provided for in ABNT NBR ISO 22301, and ABNT ISO/TS 22317 provides the specific guidelines for BIA. Tecnogera comes in after this stage, when the list of critical processes already exists. A company does not need to certify anything to use the reasoning.
The six components that make up the account
Add the six for the same hour and for the same line.
1. Lost production
What was not produced, valued by the contribution margin and not by the sale price. Using the price inflates the number and undermines the credibility of the account in the first review.
2. Discarded raw material
What was in process and not utilized. In food, chemical, and pharmaceutical industries, this component alone often exceeds the lost production.
3. Idle labor
Idle people still cost money. Add the hourly cost of the team that is not working, including charges.
4. Cost of restarting the process
Here is the component that is often left out of the estimate. An oven that takes hours to return to regime, a line that needs new validation, a cold chamber that needs to recover temperature.
In continuous processes, the restart time is often longer than the downtime.
5. Contractual fine and penalty
Service level agreement with the client, delivery deadline, supply contract. Not every company has it, and those who do usually know the value by heart.
6. Reputation cost
It is the most difficult to measure and the easiest to ignore. It doesn’t need to become an exact number: just record how many times a year the company can fail before losing a customer.
How to calculate in an afternoon
The guide below requires no software or consultancy.
1. Choose a line and a scenario
Don’t try to calculate the entire company at once. Take the most critical line and a concrete scenario, such as an hour of downtime during the highest production shift.
2. Add the six installments for that hour
With numbers from the system itself. Most of it is already in the ERP, payroll, and contract.
3. Repeat for the worst-case scenario
Redo the calculation for four hours, and then for an entire shift. The curve is rarely linear, and that’s where the cost of restarting appears with full weight.
4. Compare with the cost of prevention
On the other side of the equation is the temporary energy subscription sized for the critical load. If the downtime costs more than the subscription, the decision is made and doesn’t need a meeting.
This is the comparison that Tecnogera includes in the proposal because it turns the equipment price discussion into a return discussion.
What the number decides
Three things, and all become easier with it.
- **The size ofthe contingency.** Protect what is costly to stop, and this usually cuts the investment in half.
- **The priority among projects.** With the number, energy competes for budget on equal footing with any other investment.
- **The conversation with the board.** Operational continuity stops being an engineering topic and becomes a spreadsheet line because risk has turned into value.
Frequently asked questions about downtime cost
What is the average cost of an hour of downtime?
There is no useful average. It varies by sector, line, and shift, and two companies of the same size can have very different numbers. What matters is the calculation for your operation.
Can it be calculated without a management system?
Yes. The six installments come from payroll, contract, and process technical sheet. A system helps with accuracy, but the calculation can be done without it too.
Is lost production the largest portion?
No. In continuous processes, the cost of restarting is usually higher. In food and chemical industries, discarded raw materials tend to lead.
Do I need ISO 22301 to do this?
No. The standard organizes the process for those who want a formal continuity system, but the impact analysis reasoning applies to any company, certified or not.
With the number in hand, what do I do?
Compare it with the cost of avoiding the stoppage. If the downtime costs more than the contingency, the calculation pays off. The next step is to size by the critical load, with the power it requires.
Conclusion
The cost of downtime is the number that separates decision from guesswork in energy choices. It takes an afternoon to calculate, uses data the company already has, and changes the conversation from inside out.
Tecnogera sizes contingency based on the critical load and includes this comparison in the proposal, so the rental value appears alongside the cost of not having it. If you already have your number, bring it to the conversation and we’ll set up the other side of the calculation.
Last updated: September 2026.
