LEDs are known for giving organizations big savings by reducing energy and maintenance costs, but there’s another way they save money: increasing productivity.
Upgrading to LED lighting can have a substantial impact on an organization’s bottom line. An increase of just 1 percent in productivity can slash the payback period or even completely pay for an LED retrofit project.
One company profiled in a 2018 National Bureau of Economic Research paper enjoyed a 0.7 percent increase in productivity after upgrading to LED lighting.[ii] This translated to an increase in profits that shortened the payback period from 3.5 years (based solely on energy savings) to just a couple months (energy savings + worker productivity increases).
Other studies have found similarly dramatic improvements in worker cognitive function and productivity from using LED lighting. One study from the International Journal of Industrial Ergonomics—comparing fluorescent and LED lighting—found an 8.3 percent performance improvement in visual and cognitive tasks.[iii] The same study found employees working LED lighting had faster reaction times, reduced fatigue and increased activity.
An Indoor and Built Environment study found dramatic productivity increases and a boost in employee morale from the marriage of LED lighting and natural sunlight in facilities that use daylighting techniques.[iv]
The “3/30/300” rule is helpful to put these studies in perspective:
Developed by commercial real estate firm, Jones Lang LaSalle, the 3/30/300 rule says that companies typically spend $3 per square foot on utilities, $30 for rent and $300 on employees.
If your building is 15,000 square feet, then you’re probably spending around $45,000 on utilities, $450,000 on rent and $4,500,000 on employees. (The total amount adds up to $4,995,000).
Reducing energy costs by 50 percent would save you $22,500 annually. Improve space utilization by 10 percent and you save $45,000. Increase employee productivity by 5 percent and you save $225,000.
A small change in the employee category can have a huge impact on your bottom line. This is why a small productivity increase can outweigh the substantial energy savings LEDs deliver and make LED lighting projects quickly pay for themselves.
When you combine the energy savings, maintenance savings, rebates and tax incentives, and employee productivity increases that LED lighting delivers, the payback period can be as short as just a few months. It’s clear LED lighting is the next step in smart facility management.
How will you increase productivity in your organization? See how Amerlux’s suite of interior and exterior LED solutions can deliver huge savings and enhance productivity.
[i] Oh, J.H., Yang, S.J., & Do, Y.R. (2014). “Healthy, natural, efficient and tunable lighting: Four-package white LEDs for optimizing the circadian effect, color quality and vision performance,” Light:Science & Applications, 3(141).
[ii] Adhvaryu, A., Kala, N., & Nyshadham, A. (2018). “The light and the heat: Productivity co-benefits of energy-saving technology,” National Bureau of Economic Research. DOI: 10.3386/w24314
[iii] Hawes, B.K., Brunyé, T.T.,Mahoney, C. R., Sullivan, J.M., & Aall, C.D. (2012), “Effects of four workplace lighting technologies on perception, cognition and affective state,” International Journal of Industrial Ergonomics, 42(1), pp. 122-128. DOI: 10.1016/j.ergon.2011.09.004
[iv] Xuan, X., (2016), “Study of indoor environmental quality and occupant overall comfort and productivity in LEED- and non-LEED-certified healthcare settings,” Indoor and Built Environment, 27(4), pp. 544-560. DOI: 10.1177/1420326X16684007