Variable speed drives (VSD) or frequency inverters are solid-state devices and save energy whenever electric motors run at less than full power. VSD is actually a frequency converter in which 50Hz or 60Hz ac input voltage is first rectified into dc which is then converted back into variable-frequency ac voltage. It must be noted that the power demand of motor varies with the cube of the motor speed, i.e. power is proportional to (speed)³.

This means that a reduction of speed by 20% will result in reduction of power consumption by nearly a half, i.e. 50% saving. Since most HVAC equipment seldom runs at full power, significant energy savings can be made with these variable speed drives.