Very good question. The prevailing view among many facility managers is that it is cheaper to repair failed motors larger than 15 horsepower (hp) than to replace them. Although this is usually true in terms of first cost, the best economic decision for a given motor is not quite so straightforward. When all the relevant factors are considered, replacement with an energy-efficient motor makes economic sense in many situations. We recommend that you read this excellent article from Minnesota Energy Resources.

Another thing to recognize is that a rewound motor is less efficient than a new one. Each time a motor is rewound, you lose in the region of 1% of its previous efficiency.