Reigniting the energy efficiency engine Ben Evans, VP, Public Affairs, Alliance to Save Energy

July 14th, 2020

Market Leadership

There’s a terrific lyric from the late, great songwriter John Prine that goes, “We are living in the future. I’ll tell you how I know. I read it in the paper, 15 years ago.”

I sometimes think of that line when I hear people talking about the coming clean energy revolution, because in so many ways, it’s already here. One of the clearest indicators of that is the underappreciated job growth in the industry, particularly in energy efficiency, which is now one of the largest sectors in the entire energy economy.

Just how large? According to the U.S. Energy and Employment Report (USEER), the energy sector employed nearly 7 million Americans in 2019, or almost 5% of the U.S. workforce. Of that – at least before COVID-19 unleashed its wrath – nearly 2.4 million Americans worked in energy efficiency. With a significant R&D boost and other support from the federal government, energy efficiency has emerged as an economic powerhouse over the past few decades, driving billions of dollars in economic activity and employing contractors, engineers, manufacturers and other workers across the country.

COVID – as it has so many things – has derailed that progress, at least temporarily. Since March, the industry has hemorrhaged more jobs than any other energy sector, as home and building owners have delayed or canceled efficiency projects. With nearly 60% of efficiency jobs in construction, this has been particularly hard on contractors, most of which are small businesses, but it threatens the manufacturing sector as well (think of windows, insulation, HVAC equipment, etc.)

We got a glimmer of hope last week when E2, E4TheFuture, and other partners released the latest monthly clean energy jobs data, showing that the clean energy sector gained more than 106,000 jobs in June. More than 72,000 of those were in efficiency. It remains to be seen if this is a temporary blip or if the job losses will pick back up in the coming months. That likely hinges on how much and how soon we can safely reopen the economy.

Regardless, the damage COVID has done is staggering. Even with June’s gains, the cumulative efficiency job losses since March total 360,000 – roughly double the size of the coal industry workforce. The losses come after a particularly strong run of growth in recent years. According to USEER, energy efficiency was the fastest growing energy sector from 2015-2019, adding more than 400,000 jobs for a growth rate of 20% - three times the job growth rate in the overall economy.

We can get back that momentum, but it will require action in Washington, and we at the Alliance to Save Energy are working to make that a priority. With the right policies in place, we can encourage investment from consumers and businesses that will stimulate economic activity and hiring.

One way we can do this is through more aggressive tax incentives encouraging home and building owners to do efficiency upgrades. Another is to leverage federal funding to attract private investment for efficiency projects at public facilities – hospitals, police stations, military installations, schools, and community shelters – to not only be more energy-efficient but to be more resilient and flexible in responding to future disasters. We could also send federal funding directly into local communities to kickstart efficiency projects, specifically targeting small businesses by providing matching funds for utility programs already in place.

These investments won’t just put thousands of people back on the job, they will lower energy bills, reduce carbon emissions, and conserve critical resources. Congress and the Trump administration have the opportunity to not only help our economy recover, but to build a stronger future. It’s time for Washington to get to work so that others can too, including 360,000 energy efficiency workers.