Nov 21, 2011

Energy Efficiency = More Net Jobs

According to the American Council for an Energy Efficient Economy (ACEEE), investments in energy efficiency improvements net more jobs than investments in power generation. Energy efficiency retrofits, and putting subsequent savings ($) into industries other than power generation, employs more people. 

Here's a scenario provided by the ACEEE:

A city decides to spend $15 million improving energy efficiency in public buildings. These improvements will lower the city's energy bills by $3 million a year, each of the next 20 years.

Three types of jobs will be created from the $15 million investment. First, contractors will have to install the energy efficiency measures (direct jobs). Second, contractors will require materials (insulation, tools, etc.) from manufacturing and building supply companies (indirect jobs). Finally, workers in both categories will spend their earnings on necessities and fun (induced jobs).

Over the short term the city's spending on energy efficiency puts $15 million into employing people in more labor-intensive industries than power generation, i.e. construction, manufacturing, and retail. Figure 1 shows ACEEE's analysis of average jobs per industry per million dollars of revenue. 

Over the long term, annual energy efficiency savings spread evenly across manufacturing, construction, trade, and government services (aka. community renewal), will employ roughly 17 people per year per $1 million spent. Figure 2 shows net job gains if capital is shifted in these manners over the short and long terms.

Energy Efficiency strategy = Option 1.
Power Generation strategy = Option 2.

Energy Efficiency strategy = 22 more jobs per year.

This blog distilled from an article by Casey Bell, senior economic analyst at the American Council for an Energy-Efficient Economy (ACEEE). Facts & figures from "How Does Energy Efficiency Create Jobs?" fact sheet. 

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