Energy Efficiency Boosts Job Growth

Investing in energy efficiency is a good idea. How do we know? Lately, you’ve probably heard a lot about greenhouse emissions reductions and energy security and recent Federal policy has reflected as much. But are there larger economic implications? We know that energy efficiency may save consumers money long-term, but does investing in energy efficiency create jobs? Turns out, the answer is a resounding yes.

While the U.S. economy has struggled to regain its pre-recession foothold, investments in energy efficiency seem to pay off not only in terms of cost savings, but also in job creation. Recent reports based on the Impact Analysis for Planning (IMPLAN) modeling on Department of Energy (DOE) program data suggest that energy efficiency investments produce jobs at a greater rate than any other sector analyzed in the study including trade and services, construction, renewables, manufacturing, and energy. According to the Southeast Energy Efficiency Alliance’s (SEEA) third Energy Pro3 Report, Benchmarking Job Creation in the Southeast, every $1 million dollars invested in energy efficiency results in just over 17 jobs.

In her article, Understanding the True Benefits of Both Energy Efficiency and Job Creation, Casey J. Bell outlines two ways in which energy efficiency supports the job market. First, jobs are created as a result of the initial investment into an energy project. Second, the money saved in utility bills is re-spent in other, more labor intensive, markets.

The American Council for an Energy Efficient Economy (ACEEE) explains that three types of jobs are created as the result of an investment in energy efficiency. Direct jobs represent the consultants and contractors hired to implement the energy conservation measures. These workers will purchase materials in order to complete the job. As the ACEE explains, these purchases put money into the larger economy for manufacturers and service providers that supply the construction industry. The resulting supply-chain jobs are indirect jobs that were, in part, created because of the demand for materials for energy efficient products.

Finally, once savings are realized, money that would have otherwise have been spent on energy will be redirected to other labor intensive market sectors, permanently adjusting the spending patterns of the owner. More labor intensive markets ultimately require more resources, creating more jobs than if the building owner had chosen to conduct business as usual. The ACEEE considers these jobs induced.

The potential for greater job growth makes a convincing argument for integrating energy efficiency into other strategic growth goals at all consumer levels including local, state, and federal governments. The larger the project, the greater the economic impact. It seems that investing in energy efficiency is not only a smart solution for energy management but also an excellent way to bolster our economy.