Last month, the Department of Energy released its annual U.S. Energy Employment Report (USEER), summarizing 2021’s energy sector employment statistics. Of particular significance, the report highlighted the lingering effects the pandemic has had on the energy efficiency job sector. The report states that the energy efficiency industry was hit especially hard by the COVID-19 pandemic in 2020, resulting in across-the-board declines amounting to a total loss of 271,719 jobs. And while there were modest gains in 2021, energy efficiency jobs grew more slowly than in the total energy sector. However, job gains in energy efficiency still outpaced job growth in U.S. employment overall, and efficiency remains one of the largest energy technology sectors, with over 2.1 million workers.

Key Insights

The report provides a snapshot of employment in key sections of the traditional energy sectors, which employ approximately 7.8 million Americans. While the report makes it clear that the energy sector was deeply impacted by the COVID-19 pandemic and is still in the process of recovering, it mentions that there is incredible potential for job growth in the coming years. For instance, according to the report, nearly all technologies added energy jobs in 2021. This includes increased employment in transmission, distribution, and storage; energy efficiency; and motor vehicles.

Despite setbacks, energy efficiency still represents one of the largest employers amongst all traditional energy and energy efficiency sectors, more than the electric power generation sector, fuels, and the transmission, distribution, and storage sectors. Additional highlights from the report include: 

• In 2021, the energy efficiency technology group added 57,741 jobs and saw positive job growth in all efficiency technologies. Traditional HVAC, the largest energy efficiency technology, added the most jobs of any category: 17,740 (3.3%).
• Construction had the highest percentage of companies reporting hiring difficulty, with 91% of respondents indicating that it was “very difficult” or “somewhat difficult” to find employees. Nevertheless, the largest gains in energy efficiency were in the construction industry, with 25,131 new jobs (2.2% growth).
• By technology group, 2021 employment was highest in ENERGY STAR appliances, products, and services, with 549,543 workers.

Takeaways

Even with increases in technology-based energy employment, the efficiency job sector needs to be rebuilt. Fortunately, policy options are available that can help the process – for full proposals, visit the Alliance’s COVID-19 response page. In addition, the USEER offers some insights into where efforts should be concentrated:

• ENERGY STAR. The report finds that the ENERGY STAR program was responsible for more than 549,543 jobs in 2021. Despite the number of jobs it creates, the program’s budget has fallen in recent years. The Alliance is calling on Congress to increase its budget to $80 million to expand product categories and support building efficiency programs.
• Workforce development and diversity. While the report finds that the efficiency sector is slightly more diverse than the national average, it is far from representative for women and Black Americans. Legislation like Alliance Honorary Board Member Rep. Bobby Rush’s (D-Ill.) Blue Collar to Green Collar Jobs Development Act would help increase training and opportunities.
• Tax priorities. The report finds that while the efficiency job sector has begun to rebuild from the pressures of the COVID-19 pandemic, the sector’s job growth has slowed to 2.7%, compared to the pre-pandemic job growth of 4%. For this reason, significant initiatives are needed, including a known method for job stimulation: tax incentives. The Alliance supports several tax incentives that accelerate the efficiency sector’s job growth, such as strengthening and modernizing the Sec. 25C tax credit for homeowner improvements, the 179D tax deduction for commercial buildings, and the 45L tax credit for construction of high-efficiency new homes.

Rebuilding the energy efficiency sector is critical. It employs tens of thousands of workers, lowers utility bills, and is one of the cheapest and fastest ways to cut carbon emissions. As Congress looks to shape the next stage of the energy economy and meet this defining moment in our clean energy transition, the energy efficiency sector should be at the top of policymakers’ lists.