What does the hourglass do?

It skips time needed for tool generating items by X minutes. It has no impact on time needed for energy regeneration.

I just tried it by using a tool up until it was on cooldown and then used the hourglass and I was able to generate more tools right away.

They are helpful when you are waiting for various items to reenergize. I use them most often while waiting for my terrariums to produce or, in the Lemon Days board, I save the hourglasses for the end to make sure all the trees are at max bloom level so I can earn $250 for each tree I sell (versus $50 if they are not blooming).

I think the lower level hourglass (green?) only reduces the reenergizing time by ten minutes but if you merge them more, the reduction in time goes up quite a bit to more than an hour.

Hope this helps!