Good day folks, customer is asking this question of me: is there a easy way to figure cost of VFD upgrade from standard 3 phase AC motor including controls on a 5hp,10hp, or 20 hp motor for instance?

Probably in the range of $100+ per hp. Much depends on the enclosure and how much automation you need vs. a simple speed control.

Dear Michael, Sorry to be salesman here and you have most likely already thought about this too, but if the question is what it costs to go from a mains operated to VFD operated 3 Phase AC motor, then the question is more how much he will save, and if we are talking pump/fan torque curve this becomes even easier. If this is a normal case with a reasonable duty cycle then if you calculate the costs of operation your customer will be convinced very fast and you can easy get into a clear win win situation, maybe with additional business to follow for you.

Google DSIRE energy credits. This website has a list of energy credits by state and equipment type. The averages I have seen run from $30 per horsepower up to $100 per horsepower depending on your application.

Baldor has a program as well, called BEST. But Jan brings up a good point on estimating the savings based upon your fan/pump curve as well. Baldor's version doesn't have that, but I believe the the Dept. of Energy has a program for it.

Michael.... you're getting a lot of energy savings comments.. which are great benefits of VFDs on centrifugal loads.. but strictly from a straight forward cost standpoint.. ..it's the price of the equipment (contact me off line.. I'll give you budgetary pricing) plus how much time you estimate to mount and wire.. (figure it in days.. ie one day, two days, etc). The automation and control is a separate issue.. if you're putting a VFD on an inlet vane controlled airhander for instance, you can just use whatever is controlling the vanes to the be speed reference of the VFD. But, it can be a lot more complicated than that depending on your situation.. If you're going to have to install transducers, or marry it to an existing communication buss.. the cost is going up.. send me more specific examples and I'd be glad to help you..

@Michael C.:
One more thing to consider is that not all "standard" machines have sufficient winding intergrity to operate successfully on a variable frequency drive source. This may entail upgrading the rotating equipment to "VFD-capable" designs, which should pretty much match the existing footprint for 5-25 hp ratings but may not for larger torque capability requirements.

To simplify it down to the absolute basics for a rule-of-thumb approach:
(Upfront costs) + (operation cost for specific period) + maintenance = (lifetime cost).

In the case of existing installed base, upfront costs are (generally) zero.
Therefore, the payback for a new arrangement (VFD, energy efficient, etc) is the time required to "save" the additional costs expended for the transition.

All the above are good answers, but...lets start with the basics.

What is the application? How slow does your customer want to run?
What are the existing motors, are they capable of running on a VFD at slower speeds? What is the insulation rating of the current motors?
May or may not need new invertor duty motors.

As for the drive a few questioons are necessary:
What voltage?
What is the distance between were the VFD is mounted and the motor? looking for wire length. Might need a load reactor.
What is the power source? might require line side reactors
NEMA rated enclosure required for mounting of VFD?
What is the source of the speed command?
What is the source of the run command?
Is communication required?

After these questions are answered than pricing can be addressed.