Energy Efficiency Is the Best Job Creator: Report

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Say you’re a city mayor with a $1 million to invest in job creation. Where will you get the most bang for your buck?

It turns out the energy efficiency is the best job creator when compared against other industries  that vie for such dollars, according to a report by the Cadmus Group.

The independent consulting firm looked at the job creation impact of a 13-city energy efficiency retrofit effort on behalf of the Southeast Energy Efficiency Alliance (SEEA). It found that every $1 million spent from 2010 to 2013 resulted in the creation of just over 17 jobs.

Cadmus Group also looked at the number of jobs other industries would create if the money flowed their way. Energy efficiency bested all of them: construction; renewables energy; energy generation, distribution and transmission; and manufacturing.

energy efficiency best job creator

The report, Benchmarking Job Creation in the Southeast, also found that energy efficiency produced the strongest ‘labor income.’ That’s the total payroll paid by an employer, including wages and salary, benefits and payroll taxes, as well as income earned by self-employed workers and single proprietors.

This  reflects the fact that energy efficiency creates “good paying jobs,” according to SEEA.

energy efficiency best job creator

 

Last, the report looked at how well the states faired in producing jobs through the program. Winners were Florida, Georgia, Alabama and Tennessee, which produced even stronger job growth than the region as a whole. SEEA attributed their performance to several factors, such as local program administration and spending; the availability of financing for retrofits; consumer education efforts; local market conditions; existing energy efficiency momentum; and the presence of strong marketing support, utility partnerships, and workforce training and development programs.

“Strong job growth is central to long-term economic prosperity,” said Mandy Mahoney, president of SEEA, which administered the 13-state federally funded program.  “The healthy job numbers and economic output produced by the SEEA Consortium reinforce the powerful impact energy efficiency investments have in this region. These results help set the stage for new opportunities such as innovative financing programs. New loan products, such as property assessed clean energy (PACE) and on-bill financing that enable energy efficiency retrofits, are well positioned to launch additional job- and wealth-creating opportunities.”

The Department of Energy provided $20.2 million the southeastern program as part of the Better Buildings Neighborhood Program. It resulted  in 10,000 building energy audits and 6,000 home and commercial building retrofits. The participating cities were: Arlington, Va.; Atlanta, Ga.; Birmingham, Ala.; Blacksburg/Roanoke, Va.; Carrboro, N.C; Chapel Hill, N.C; Charleston, S.C.; Charlotte, N.C. Charlottesville, Va.; Decatur, Ga.; Hampton Roads, Va.; Huntsville, Ala.; Jacksonville, Fla.; Nashville, Tenn.; New Orleans, La.; and Richmond, Va.

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Elisa Wood About Elisa Wood

Elisa Wood is the chief editor of MicrogridKnowledge.com. She has been writing about energy for more than two decades for top industry publications. Her work also has been picked up by CNN, the New York Times, Reuters, the Wall Street Journal Online and the Washington Post.

Comments

  1. Elisa,

    Thanks for bringing this to our attention. Efficiency and conservation are common sense, and will create plenty of jobs such as: consultants, sales, auditors, installers of solar and mechanical devices – to name a few.

    Cam Carey

  2. This is good news, but I think it misses a major point. Saving money from energy efficiency help preserve jobs and raise productivity. Very often the annualized savings can equal the total costs of 1-5 employees or many more for bigger projects. The money saved can be used to expand the business, return to shareholders, pay employees more, or just help keep people from losing their jobs. It’s all about capital and resource efficiency. If we can do more with energy spend, then we’ve raised productivity and that not only makes us wealthier, but in many cases it may mean jobs saved and improved competitiveness. And we have to think about competitiveness in a broader sense then just manufacturing. Lower energy spend on schools or for healthcare not only helps us reduce costs in those key sectors (or reallocate resources to more productive uses such as service delivery or hiring more teachers), but often reduces peak demand on the electrical grid and improves its stability. Again we all benefit from that.

  3. Oops last entry was sent before I finished typing.

    This is good news, yet I think it misses a major point. Saving money from energy efficiency help preserve jobs and raise productivity and the savings/benefits are recurring (which is sometimes not the case with other types of consumption). Very often the annualized savings from energy-efficiency can equal the total costs of 1-5 employees or many more for bigger projects – if not, in aggregate smaller projects have the same result. The money saved can be used to expand the business, return to shareholders, pay employees more, or just help keep people from losing their jobs.

    It’s all about capital and resource efficiency. If we can do more with energy spend, then we’ve raised productivity and that not only makes us wealthier, but in many cases it may mean jobs saved and improved competitiveness. And we have to think about competitiveness in a broader sense then just manufacturing. Lower energy spend on schools or for healthcare not only helps us reduce costs in those key sectors (or reallocate resources to more productive uses such as service delivery or hiring more teachers), but often reduces peak demand on the electrical grid and improves its stability. Again we all benefit from that.

    Finally, government spending on energy-efficiency is often a very good use of capital. Remember if the Government’s cost of capital is around 1%-3% and EE projects are typically returning 10% to over 100% IRR, then that’s an outstanding return on investment. I wish most private sector companies and corporations would view spending on EE with such rationality, but they almost never do. The folly of demanding 2-year paybacks on EE projects persists to the detriment of most major companies, the country, society, and the environment.

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