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ENERGY SAVINGS OFTEN BRING IMPROVEMENTS IN PRODUCTIVITY
AND PRODUCT QUALITY

Simple energy savings are just the start. Cool Design is delivering awesome productivity results in many workplaces around the country. Researchers at Carnegie Mellon University's Intelligent Workplace design studio (www.arc.cmu.edu/cbpd/) are quantifying the value of the 'people benefits' of Cool Design. In one example, improved lighting with an extra up-front cost of $370,000 saved almost $700,000 in energy and operating costs for a typical workplace. But the resulting productivity gains are worth as much as $14 million. 

Some simple math shows why productivity savings routinely exceed direct energy cost returns: In a typical building, energy costs average $1.50 to $2.50 per square foot, while salaries exceed $200 per square foot. Cutting energy use in half typically saves $1 per square foot per year, while boosting productivity just 5 percent saves more than $10 a square foot. 

How it Happens

Today's best architects and engineers have learned a great deal about the use of energy-saving design to increase worker morale productivity in offices, commercial buildings and factories. Designing to give employees the lighting and comfort they want usually means giving workers more control over lighting, heating, and cooling. Top managers have always been rewarded with corner offices and personal thermostats - daylight and climate control. With cool design, companies can reward everyone else. 

In a typical case, Control Data Corporation's Operations Group in Sunnyvale, California upgraded lighting for $15,000. Energy use dropped 65 percent, saving $7,000 a year. The reduced glare cut the number of input errors, raising productivity by an estimated six percent, saving $28,000 a year - four times the energy cost savings. When Lockheed built a daylit, energy-efficient engineering facility in Sunnyvale, California, they saved $300,000 to $400,000 a year on energy bills, and productivity rose 15 percent. 

Why aren't more buildings Cool Buildings? Why are so many developers, architects, and engineers ignoring 92 percent of long-term building costs? Because of the formidable barriers woven into the system of making buildings: Almost everyone involved in building construction is rewarded for minimizing initial cost as opposed to life-cycle cost. Moreover, they are rarely the ones who will pay the energy bill or salaries of people working in the building. 

Here are more examples of energy strategies that also produced measurable savings in core business activities: 

  • In Costa Mesa, California, VeriFone, a subsidiary of Hewlett-Packard that makes electronic swipe readers to verify credit cards, achieved an excellent result when it renovated a building housing offices, a warehouse, and light manufacturing, beating California's strict Title 24 building code by 60 percent with a 7.5-year payback. More astonishing, however, is the five percent increase in employee productivity and 45 percent drop in absenteeism after the overhaul. 

    These benefits brought payback to under a year, for a return on investment of more than 100 percent. Workers in the new building no longer complain of end-of-day headaches or end-of--week sluggishness. They loved the extensive use of day-lighting and say the air was so fresh they felt as if they were working in a forest - no mean feat considering the building sits in the lap of the 405 freeway and John Wayne Airport.
  • Hyde Tools is a Southbridge, Massachusetts manufacturer of industrial cutting blades. Not long ago, the company did a $98,000 lighting upgrade from old fluorescents to new high-pressure sodium-vapor and metal-halide fixtures (with $48,000 paid for by the local utility). Estimated annual energy savings are $48,000, for a payback of about one year. But with the new lighting, workers were able to see small particles that were causing defects in their high- precision blades. Hyde Tools estimates the improved product quality is worth another $25,000 a year - bottom-line savings that are critical to a small company. Hyde says every dollar saved on the shop floor is worth $10 in direct sales, meaning the quality improvements were worth the equivalent $250,000 in added sales. Through an energy-saving project, Hyde Tools achieved the equivalent of $730,000 annual increase in sales. 
  • One of the best-documented increases in productivity from Cool Design is West Bend Mutual Insurance Company's move to a new 150,000-square-foot headquarters near Milwaukee, Wisconsin. A detailed study of productivity in the old building during the 26 weeks before the move and the new building for 24 weeks afterwards found productivity increased 7 percent when new, energy-friendly work stations were fully functional. The productivity gains were worth at least $364,000, and probably much more. The award-winning design uses a host of energy-saving features, all on a $90 per- square-foot budget. Even in open-office areas, workers have individual control over both temperature and air flow using radiant heaters and vents built directly into their furniture and controlled by a small desktop panel. The same panel controls lighting and white noise that masks nearby sound. The high-tech workstations paid for themselves in under one year, thanks to annual electricity costs 40 percent lower than the old facility. 
  • When subsidiary Prince Street Technologies, a subsidiary of Interface Carpet, built a new 160,000- square-foot factory in Cartersville, Georgia, they used extensive natural daylighting. Daylight streams into the factory through 32 skylights - a big help for employees making richly colored carpets. A company official brags theirs is "the only carpet factory with a 60-foot picture window. The workers love it . . . It's made an immense difference in attitude." In the first three years after moving into the new building workers' compensation cases dropped from 20 per year to under one per year for savings worth an estimated of $100,000 to $200,000 a year - more than the value of the energy savings. 
  • Several North Carolina schools built with daylighting cut energy consumption by 20 to 64 percent, with a financial payback of less than three years. But more importantly, students outperformed those in non-daylit schools on standardized tests by as much as 14 percent. The Cool Design uses extensive south-facing skylights, with translucent fabric baffles to keep direct sunlight from entering the classrooms. Light sensors control backup electric lighting to maintain the correct lighting level. Each classroom also has shades to darken the room as well as override switches to increase light levels. 

    The extra cost of daylighting one of the schools was estimated at $230,000. But the reduced cooling and lighting loads allowed for smaller, less expensive mechanical systems that cut added costs to less than one percent of the total construction budget. The daylighting system paid for itself in less than a year. Best of all, evidence shows the students' performance was due to Cool Design, rather than simply having a new building. A study of the daylit schools notes a new, non-daylit building in the district actually showed a negative impact on achievement. A separate Canadian study of students attending elementary schools with full-spectrum light versus those attending in schools with standard lighting concluded that the students in full-spectrum light were healthier and attended school three to four days more per year.
  • The Wal-Mart store in City of Industry, California, uses half the energy of a typical new California store, thanks to advanced lighting and efficient, downsized climate control system. In place of ordinary opaque roofing, the store has an 18-kilowatt solar photovoltaic canopy. Annual energy savings are estimated at $75,000 to $80,000, which means a three-year payback of the added cost of the equipment. Southern California Edison, the local utility, provided a $170,000 incentive that shortened payback to less than one year. But rewards are much greater than that: Wal-Mart's decision to use skylights was sparked by the stunning success of its "Eco-Mart" store in Lawrence, Kansas. In a cost-cutting move, the company installed specially- designed skylights over just half the store, leaving the other side without daylighting. Managers using Wal-Mart's famous real-time inventory system quickly found that sales per square foot were significantly higher in the daylit half of the store, and higher than the same departments in other stores. 
  • Mail sorters at the main U.S. Post Office in Reno, Nevada became the most productive and error-free in the western half of the U.S. after a major energy and lighting upgrade in their building. A main feature of the overhaul was new ceiling and lighting system. Before completing the entire $300,000 renovation, managers installed the new system above one of their two sorting machines. In five months, productivity on that machine shot up almost 10 percent, while the other showed no change. A year later the increase stabilized at about six percent. Working in a quieter and more naturally lit area, employees did their jobs better and faster. The error rate by machine operators in the renovated area dropped to only one mistake per thousand letters. Energy savings projected for the whole building come to about $22,400 a year. The new ceiling also saved $30,000 a year in maintenance costs. Combined energy and maintenance savings came to $50,000 a year, a six-year payback. But the productivity gains were worth $400,000 to $500,000 annually - paying for the renovation in less than 12 months.
  • In the early 1980s, Pennsylvania Power & Lighting Company was concerned about the lighting system in the area housing its drafting engineers. The most serious problem was glare reflecting off work surfaces, slowed work and increased error rates. The company converted from general lighting to task lighting, creating more variance in lighting levels. As a result, lighting energy use dropped 69 percent, and annual operating costs fell 73 percent. Combined, the direct savings would have paid a 24 percent return on investment, covering the cost in just over four years. With improved lighting, careful documentation showed productivity jumped by over 13 percent - worth $42,000 a year to the utility. Simple payback dropped from 4.1 years to 69 days, turning a 24 percent return into a 540 percent return. Moreover, after the upgrade, the engineers' average sick leave dropped 25 percent. Finally, supervisors reported new lighting reduced the number of errors: better quality work was worth $50,000 per year.
  • The Superior Die Set Corporation of Oak Creek, Wisconsin upgraded lighting for $3,000, providing annual energy and maintenance savings of $1,750 - a payback of 20 months. Reduced reflections allowed drafters to cut turn-around time for drawings by more than 11.3 percent, worth $37,500 a year, reducing the payback to under one month.