Creating jobs with energy efficiency

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Alabama is not the best—but it is far from last—in the list of Best and Worst States to Make a Living. In the 2015 rankings from MoneyRates.com, Alabama places number 22, ahead of many larger states with bigger total economies. However, the employment rate in the state remains static at 6.1% since May.

“[Jobs] are not the cause of a healthy economy,” says Adam Davidson of NPR’s Planet Money, “they’re the byproduct.” As business leaders transition from dealing with energy as a static cost of doing business into a mindset of energy management as a source of revenue, opportunities for employment are beginning to appear.

It is estimated that 17 jobs are supported for each $1 million spent in the public sector. In construction, the numbers are slightly higher, around 20, but the impact of the investment reaches much further. As the American Council for an Energy Efficient Economy (ACEEE) notes, a simple retrofit of a municipal, or private, building begins with construction hiring. Then, a large project will require vendors, subcontractors, supplies, and distribution—jobs that are sustained or created from the initial investment. The money from the project cash flows into the local economy to purchase goods and services.

In addition to new jobs, energy management can increase wages for existing workers by reinvesting savings into higher salaries, better training, and bonuses for employees. Median wages in the U.S. have trended downward in recent years. As they begin to improve, investment in energy can be one opportunity to change income trends.

Some cities, like Chattanooga, are looking to energy management to boost employment. Chattanooga is comparable in size to Birmingham and expects to save$22 million, minimum, over the next eight years. Those savings can be used to invest in increased hiring, better training, more building conversions, and a better quality of life for the citizens as a whole. Using the IBM Smart City grants and incentives as a launching point, Birmingham could increase the economy and reduce future spending by following a similar path.

According to Birmingham-based energy consulting firm, Sain Engineering, there are three main ways energy efficiency can contribute to job growth.

New Construction: Commercial construction is expected to increase throughout 2015, indicating a positive growth sector and opening the door to better discussions on energy efficient building. Commissioning the new projects and proper energy management can cut operating costs, which can also be reinvested into new jobs.

Retrofitting: Older buildings in urban areas are being re-purposed for new uses and many cities are mandating new energy standards for older buildings. These upgrades are creating jobs in construction but also opening new positions for energy-minded professionals who design, monitor and maintain buildings to more efficient standards.

Revenue Freedom: As businesses and municipalities save revenue after investing in energy saving measures, the money saved can be used to expand existing workforces and open new locations—creating new jobs simply by being more prudent with existing revenues.

Cities are going to spend money on energy. In fact, energy usage accounts for 30% of the operating cost of a typical office building—and the top controllable cost. Smart energy management is a wise use of public funds—creating jobs and saving costs with a high return on investment over time.

This article was originally posted on Al.com.