VFD stands for Variable Frequency Drive, and is a motor whose speed is controllable by changing the characteristics of the electricity powering it.
Traditional motors rotate at a constant fixed speed, which requires a constant amount of electrical current. Many motors are used in applications where it might be acceptable to run the motor at a decreased speed, which would require less electrical energy. One example is a cooling fan. If a fan is used to cool something, it is often acceptable to vary the fan speed to provide more cooling when it is needed. A VFD, used to power the fan, would allow the fan to run at various speeds, providing many levels of cooling. As energy costs increase, VFD drives (and their associated energy and cost savings) become very attractive.
Variable Frequency Drives, in addition to saving energy, can prolong the life of the equipment they power. They are only cost effective for larger motors