Energy Jobs Report Shows Progress in Efficiency Sector, but COVID-19 Puts Many in Jeopardy
Lost in the madness of the COVID-19 pandemic, we got some encouraging news earlier this week with the release of the 2020 U.S. Energy and Employment Report (USEER), which found that energy efficiency is not just among the largest employers in the energy sector but also added more new jobs over the last five years than any other energy industry.
The timing of the report – just as the government was releasing unprecedented unemployment data showing massive job losses resulting from COVID-19 – served to drive home just what is at stake in the energy efficiency industry right now. Most of these jobs are in construction– contractors going into homes and businesses to upgrade insulation, duct work, windows, HVAC equipment, etc. That activity, particularly in the residential sector, is drying up quickly. If that continues, the damage will spread to manufacturing, engineering and other sectors, leading to significant economic fallout.
Now that Congress has passed its immediate stimulus response to the pandemic, we need to start looking next at measures that will not only put people back to work, but that continue the growth that we have seen in recent years. Sectors such as energy efficiency that deliver multiple benefits – good-paying jobs, lower energy bills for households and businesses, and lower greenhouse gas emissions – should be a priority.
USEER By the Numbers
The incredible growth in the jobs report – released by the National Association of State Energy Officials (NASEO) and the Energy Futures Initiative (EFI) – shows the huge potential energy efficiency has. Energy efficiency employment grew by 2.3%, adding more than 54,000 new jobs. In total, nearly 2.4 million Americans were employed in the energy efficiency sector. USEER’s breakdown of the energy efficiency sector showed that EE jobs span the workforce: 1.3 million jobs were in the construction industry, just under 500,000 were in professional and business applications, roughly 325,000 were employed in manufacturing of efficiency appliances and devices, and more than 186,000 jobs were in the wholesale trade.
These numbers cap four years of big gains for the efficiency sector. The ENERGY STAR program alone played a big role in that, with ENERGY STAR products driving a $100 billion market with more than 600 million certified products. Those products played a role in a broad selection of industries, including but not limited to HVAC, lighting, building products, appliances, and commercial food servicing equipment.
2020 Projections Versus Pandemic Shutdown Reality
The report also projected a vigorous 2020 for the sector, with growth at 3%. Unfortunately, the COVID-19 emergency suddenly throws that project into doubt.
In 2019, most energy efficiency employees, 56%, were employed by construction firms. These workers installed and serviced energy efficiency goods or performed efficiency related services. Construction firms reported that 78% of their employees spend more than half of their time on energy-efficiency related work. Whether they were retrofitting homes, building new commercial buildings, or improving the efficiency of public facilities, they benefitted from a strong bull market that created opportunities to finance those kinds of projects.
With much of the United States performing social-distancing measures, from non-essential business shutdowns to shelter-in-place orders, these kinds of projects have been frozen temporarily and may have trouble starting up again. Right now, energy efficiency service contractors are unable to enter many of the homes and businesses where they would have done their work just three weeks ago. Some of the companies that rely on service contracts have already begun furloughing and laying off workers.
Recession Threatens Efficiency Jobs Across the Board
Today no one knows how long the pandemic lockdowns that have brought the global economy screeching to a halt will last. In the U.S., many states have only increased response measures in the past several weeks and even optimistic projections indicate that we will experience several weeks to months of this economic freeze. As unemployment claims in the U.S. top a record 3 million, we know that many Americans will struggle just to put food on the table. In the coming months, people will simply have less money to spend on the new ENERGY STAR appliance or on the insulation upgrade their house needs. Small businesses will have less money to spend on efficiency upgrades for their facilities and financing will likely be harder to come by. Local governments will find it difficult to pay for energy efficiency retrofits to public buildings as their tax base erodes.
All these factors threaten the impressive job growth that USEER recorded in 2019. And each one of those jobs lost represent a real personal struggle for employees and their families. We need to act now to preserve as many of these jobs as we can.