On August 7, 2012, Nichole Edroas spoke at the Santa Clara County Board of Supervisors’Economic Summit, where she proposed that the County explore expanding its already successful “Energy Upgrade California” energy efficiency programs into the commercial sector and couple this market expansion with programmatic inclusion of on-site electric power generation such as solar, building integrated solar, fuel cells, wind and other forms of what is known in the energy industry as “distributed generation.” Learn more by watching the video below. You can also read the text of Nichole’s comments by clicking the following link: Nichole Edraos, Santa Clara County Economic Summit, August 7, 2012.
Are Energy Efficiency programs you’re hearing about another well-meant hustle, or is there lasting prosperity to be had in the seemingly small step of scheduling your home Energy Assessment today? Beyond anecdotal reports, ARRA-funded enthusiasm for excellent Energy Efficiency (EE) programs like Energy Upgrade California and Evergreen, San Jose’s “Project 5002,” are EE endeavors really just a mirthless game of shuffleboard, shifting workers around without creating any real value?
The shuffle, it turns out, is in the money diverted to create more growth, not the workers; EE programs DO create a snowball effect of lasting prosperity over the long haul. This post will seek to demystify why investing your time and attention in EE is an excellent way to do your part to keep lowering national unemployment, create a more comfortable home and keep up with your neighbors as they add efficiency upgrades and appliances.
Energy Efficiency creates lasting prosperity because:
EE projects are labor intensive construction-type jobs which yield cash for reinvestment
Relative to other industries, money-saving Energy Efficiency projects are labor-intensive, creating on average approximately 20 total jobs per $1M spent, higher than the average 17/$1M across all sectors, and DOUBLE the average 10/$1M in the Energy industry. Total jobs are defined as 1) the job performing the EE project itself (“gross direct”), 2) jobs in the supply chain and supporting industries for the project (“indirect”) and 3) jobs created when people who are earning money spend their money (“induced”). A link to sources and further definitions is at the end of this post.
Money that would have been wasted on utility bills is spent elsewhere in the economy
Freed-up energy savings are used to build new buildings, buy cars, create or buy new businesses and product lines, further creating more jobs.
Money spent reinvesting energy savings creates a healthier economy. A by-product of a healthy economy is more jobs.
A higher average of 20 EE jobs/$1M combined with money redirected elsewhere in the economy creates a very impressive snowball effect. Here is an example of this phenomenon derived from The American Council for an Energy Efficient Economy’s November 14 “How Does Energy Efficiency Create Jobs” post.
In the graphic at left, assume that a community will spend an aggregate of approximately $15M in energy improvements. These are money-saving projects improving lighting, managing refrigeration costs and refining HVAC usage, all currently supported with great rebates.
The “1st Year Investment” scenario at the left shows that EE projects create 45 “net” jobs/$15M invested in the first year of the EE project. This means that 45 additional (not shuffled) jobs exist as a result of the EE improvements. These jobs come from the higher average number of workers per $1M (20 vs.17), as well as the diversion of the energy savings to other parts of the economy. These jobs include people performing the work, people supporting the supply chain for the people performing the work, and the jobs created when people who are earning money spend their money.
The Long-Term Impact shows the snowball effect of reinvesting money wasted on utility bills. Over the course of 20 years, an initial investment of $15M creates 438 jobs that would otherwise not exist but for the original EE project. 22 jobs per year are created every year for 20 years.
In my neighborhood, 22 jobs per year/$15M would help soothe in the pain we are feeling.
There are fast, easy, inexpensive ways to keep the snowball rollin’. If you are a homeowner and live in California, please see our “Insulation is Sexy Stuff…” post on this topic to get your Energy Assessment scheduled. If you need a recommendation on what you can do to expand EE programs, or live outside CA, use the contact link above and we’ll connect you with some great ideas.
Our next post will be about ways to be a “Net Zero” household by marrying Energy Efficiency upgrades with solar upgrades.
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Source: ACEEE’s ”How Does Energy Efficiency Create Jobs”