The Light and the Heat: Productivity Co-Benefits of Energy-Saving Technology

Abstract

We study the adoption of energy-efficient LED lighting in garment factories around Bangalore, India. Combining daily production linelevel data with weather data, we estimate a negative, nonlinear productivitytemperature gradient. We find that LED lighting raises productivity on hot days. Using the firm’s costs data, we estimate that the payback period for LED adoption is less than one-third the length after accounting for productivity co-benefits. The average factory in our data gains about $2,880 in power consumption savings and about $7,500 in productivity gains.