Johnson Controls Survey Indicates Healthcare Sector More Likely to Invest in Energy Efficiency

Investment driven by cost savings, brand enhancement but constrained by limited capital availability

Jul 12, 2010, 09:00 ET from Johnson Controls

MILWAUKEE, July 12 /PRNewswire/ -- People hoping to observe energy efficiency leadership in action may want to take a trip to their local healthcare facility. According to new research from the American Society for Healthcare Engineering (ASHE) and Johnson Controls (NYSE: JCI), healthcare organizations are more likely to invest in energy efficiency for their facilities compared to other industry sectors across North America.

In March 2010, Johnson Controls, in conjunction with ASHE and the International Facility Management Association (IFMA), commissioned the 2010 Energy Efficiency Indicator (EEI) survey, which polled 2,882 executives and managers responsible for making investments and managing energy in facilities worldwide. Of these respondents, 288 operated in the healthcare sector in North America.

The research found that 58 percent of healthcare building decision-makers say that energy management was very or extremely important to their organization, compared with 52 percent among North American respondents across all sectors. Sixty-two percent of healthcare organizations plan to make capital investments in energy efficiency over the next 12 months, compared with only 52 percent overall in North America.

"This year's survey shows that energy cost savings and enhanced brand image are important to our industry. In order to continue to serve our communities, my colleagues understand that we need to try to keep our costs down," said Dale Woodin, executive director, ASHE. "The compassion that we offer patients and families is reflected in the way we run our business and provide care."

The survey indicates that the healthcare sector has implemented a variety of measures to achieve energy efficiency including lighting retrofits (73%), adjustments to HVAC controls (57%), installation of occupancy or daylight sensors (56%) and upgrades or improvements to building automation systems (56%). Other notable measures include the early replacement of inefficient equipment (41%) and the retro-commissioning of major building systems (23%, up from 16% in 2008).

Compared to results from the 2008 Healthcare EEI, the 2010 findings suggest an upward trend in the percentage of healthcare executives that have a goal of either achieving green building certification or incorporating green elements into their new construction projects (80% in 2010, up from 72% in 2008).

"The healthcare sector has had an increasing commitment to energy efficiency and we continue to see that with our customers' interest in making investments," said Richard Smith, director, energy solutions healthcare, Johnson Controls. "However, limited access to capital to invest in energy upgrades continues to hold the industry back from reaching the full savings potential of energy efficiency. It is important for healthcare decision-makers to become educated about the alternative financing methods that are emerging."

Lack of capital budget was cited as the primary barrier to efficiency investments among both healthcare respondents (45%) and the overall North American sample (38%). An additional twenty-one percent of healthcare leaders say insufficient paybacks or return on investment is the primary barrier to investment.

"In light of the difficult credit environment, it comes as no surprise that our industry is playing close attention to ROI. From 2008 to 2010, the average maximum allowable payback for investments has dropped from 3.8 years to 3.4 years," said Woodin.

The EEI survey results for the healthcare sector will be discussed today at the ASHE Annual Conference and Technical Exhibition in Tampa, Fla.

The survey is managed by the Johnson Controls Institute for Building Efficiency, a new initiative of Johnson Controls, providing information and analysis of technologies, policies, and practices for efficient, high performance buildings and smart energy systems around the world. For more information, visit

About Johnson Controls

Johnson Controls is a global diversified technology and industrial leader serving customers in over 150 countries. Our 130,000 employees create quality products, services and solutions to optimize energy and operational efficiencies of buildings; lead-acid automotive batteries and advanced batteries for hybrid and electric vehicles; and interior systems for automobiles. Our commitment to sustainability dates back to our roots in 1885, with the invention of the first electric room thermostat. Through our growth strategies and by increasing market share we are committed to delivering value to shareholders and making our customers successful.

About Johnson Controls Building Efficiency

Johnson Controls Building Efficiency is a leading provider of equipment, controls and services for heating, ventilating, air-conditioning, refrigeration and security systems for buildings. Operating from 500 branch offices in 150 countries, we deliver products, services and solutions that increase energy efficiency and lower operating costs for over one million customers. We are involved in more than 500 renewable energy projects including solar, wind and geothermal technologies. Our solutions have reduced carbon dioxide emissions by 13.6 million metric tons and generated savings of $7.5 billion since 2000. Many of the world's largest companies rely on us to manage 1.5 billion square feet of their commercial real estate.

About ASHE

The American Society for Healthcare Engineering (ASHE) is one of the personal membership groups of the American Hospital Association (AHA). ASHE represents a diverse network of 10,000 members dedicated to optimizing the healthcare physical environment. For information on ASHE, go to

SOURCE Johnson Controls