«NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency & Renewable Energy, operated by the Alliance for ...»
The first is that impacts from the installation phase are all positive, resulting in $13.7 million in economic activity in Boulder County and $19.5 million for the state as a whole in 2009-2010. At the same time, the total investments by program participants supported 85 jobs in Boulder County, just under 7 jobs per million dollars of investment in 2009-2010. For the state as a whole, program investments supported 126 jobs, more than 9 jobs per million dollars of investment. Wage and salary earnings increased by $5.1 million in Boulder County and $7.1 million for the state as a whole during this time. These job impacts represent a small portion (less than 0.1%) of the county’s total employment in 2009. Still, with the county in recession in 2009, every job—be it a new job, one that is retained, or extra hours added to keep a worker fulltime—was a welcome addition. 10 The differences between county and state impacts are likely due to the fact that (1) not all contractors were located in Boulder County, and (2) the larger share of each dollar spent leaves the county but stays within the state.
According to the Bureau of Labor Statistics, employment was estimated at 152,804 in Boulder County at the end of 2009. Unemployment was 6.4%, which was historically high for the county. See U.S. Bureau of Labor Statistics News Release, U.S. Dept. of Labor, Oct. 19, 2010 and Bureau of Labor Statistics, U.S. Dept. of Labor, County Employment and Wages, Fourth Quarter 2009, July 20, 2010, www.bls.gov/cew/.
The results in Tables 2.2 and 2.3 are not intended to be precise forecasts. The totals offer reasonable insights into the benefits of the energy efficiency and renewable energy investments, but due to the small level of spending relative to that studied in most I-O analyses, even modest changes in the assumptions could change the results in individual sectors.
Analysis of the annual utility bill savings alone for one year found that this level of spending ($124,197) resulted in no net gain in jobs and a very slight gain in economic activity for both the county and the state as a whole. This is due primarily to the relatively low level of utility bill savings during the first year. It should be noted that some measures, such as solar PV, are longterm investments. Their savings accumulate over the full 30-year life of the investment.
Similarly, the calculation of average utility bill savings used for this analysis was adversely impacted by participants who increased the square footage of their homes, enhanced living spaces, or made lifestyle changes. In some instances, the measures were installed to increase comfort (reduce drafts, provide better lighting, etc.) or to improve aesthetics. Also, first-year energy use may reflect a period of homeowner experimentation. Some might have tested different thermostat settings, for example, to find out for themselves how to balance newfound comfort against energy savings. A more detailed assessment of qualitative impacts is included in Section 3 of this report.
Jeff Cope sat at the reception desk at Bella Energy, a Louisville (Boulder County) solar integrator, looking a little big for his chair. Cope, who held the title of Solar Advisor for Inside Sales, actually handled all kinds of tasks, from answering phones and receiving FedEx packages to providing sales help and sketching preliminary solar designs. At the time of this interview, Cope said he was happy to have a job in solar, as he was in fact a displaced semiconductor industry engineer. He took the job in early 2010. Bella Energy had been growing, largely because of business from the CSLP. In Fall 2009, Bella sales activity, including onsite sales visits, had about doubled thanks to ClimateSmart. At least half of the company’s residential projects and one-third of total gross revenues were coming from ClimateSmart program leads. Since the moratorium on residential PACE financing, Bella’s residential sales have slowed, but the company is refocusing on the commercial solar market, for which Boulder County still has an active CSLP. Bella hired Cope in anticipation of work in that market.
Cope’s career path supports the argument that solar jobs can make a difference. His former employer was an electronic chip manufacturer in Richmond, Virginia, which closed after foreign competitors applied questionable trade practices. Cope qualified for Trade Adjustment Assistance (TAA), including retraining, from the U.S. Department of Labor. “I wanted to move into a green tech industry, and solar fit the bill,” he explained. He moved to Colorado at his own expense but received TAA support for retraining at Solar Energy International, a 20-year-old solar training center in Carbondale, Colorado. Cope said he is never bored in his job, even though it would not seem to require a master’s degree in engineering. “I don’t expect to stay in my current role, though I am sure I will be in the solar industry,” he said. He credits his after-hours role as a new parent for giving him the drive to make this career work. “I want to get this clean energy transition going for the next generation,” he said.
Sustainable Careers (Cont.)
Bella Solar looks for employees with good educations. Most of the employees have college degrees, and the average wage is about $40,000 per year, according to John Shaw, commercial sales director. With supportive policies and local programs like CSLP, Cope and his solar employer see strong prospects for growth in coming years.
2.4 Macroeconomic Impacts Projected Through 2020 The following tables provide an estimate of the net impacts from the CSLP program, assuming it were to continue for the next 10 years through 2020 (or a similar 10-year period). This analysis assumes similar annual participation levels and investment patterns and the same level of perparticipant utility bill savings (i.e., the same level of energy savings experienced by current participants and no increase in utility rates) for each year noted. The analysis looks at nine sectors.
The tables show how each of the industry sectors is affected in each of two benchmark years, 2015 and 2020. The impacts shown are not cumulative. The total impact, year on year, indicates that jobs created would be sustained, with some additional job growth as the program continues.
For example, total annual jobs in Boulder County increase from a base of 85 in 2010 to 88 in 2015 and then to 93 in 2020. Although the impacts are small, relative to the larger economy, this is only because the scale of investment for the CSLP is small, relative to the entire county economy. 11 In 2009, the gross domestic product (GDP) for the State of Colorado was estimated to be $252.7 billion for all industries. See, Gross Domestic Product by State, Bureau of Economic Analysis, U.S. Dept. of Commerce, Regional Economic Accounts, www.bea.gov/regional/gsp/.
Macroeconomic Impacts of the Boulder CSLP by Sector in One Future Year (2015) Table 2.5. Macroeconomic Impacts of the Boulder CSLP by Sector in One Future Year (2020) The analysis indicates that three industries in particular benefit the most from the program in each of the years noted. These are the retail and wholesale trade sectors, the construction sectors and the service sectors. The trade and service sectors are winners largely for two reasons. First, they benefit from the actual investments in the energy efficiency measures made in each of the years. Second, they benefit from the higher level of goods and services sold as program participants spend their energy bill savings elsewhere in the economy.
The construction sector benefits primarily because special trade contractors and others are involved in installing the new renewable systems and making the efficiency upgrades. The construction sector alone pulls in about one-third of the net job increases. Using the annual installation investments as a benchmark for evaluation, it might be noted that about 95% of the net job impacts are from the efficiency investments made in that year. The remaining impacts are the result of spending of utility bill savings by program participants.
As might be expected, the energy industries incur some overall losses in jobs, compensation, and output. But this result must be tempered somewhat as the industries themselves are undergoing internal restructuring. For example, as the electric and natural gas utilities engage in more energy efficiency services and other alternative energy investment activities, they will undoubtedly employ more people from the business services, engineering, and construction sectors.
Therefore, the negative employment impacts should not necessarily be seen as job losses; they might rather be more appropriately seen as a redistribution of jobs in the overall economy and future occupational tradeoffs.
Explained differently, while the electric utilities may lose traditional jobs (due to selling less energy), they would gain many of those jobs back if they moved aggressively into the energy efficiency business, thereby absorbing some of the job gains realized in other sectors, such as the construction and service sectors. In effect, if they expand their participation in the energy efficiency market, their job totals can increase relative to the estimates based on a more conventional definition of an electric or natural utility as solely an energy supplier.
Electric and natural gas utilities are very capital-intensive (i.e., they require greater total assets for each dollar of revenue generated by the utility, relative to other industries). Thus, as the revenues of the utilities decrease under the CSLP and other efficiency programs, the amount of capital investment will also decrease (i.e., fewer new power plants and pipelines are built), lowering the industry’s value added and output contribution to the larger economy. As the analysis indicates, this impact is tempered by the investments in efficiency and spending of energy bill savings. The full impact of these investments and the annual savings (in technologies such as PV noted earlier) are not realized until the investments are paid off.
2.5 Economic Analysis Conclusions Based on the analysis presented in this section, it is clear that Boulder County and the State of Colorado benefited from the residential ClimateSmart Loan Program (CSLP). The PACE financing mechanism set the stage for job growth, increased economic activity throughout the economy, and positioned both to reap even larger benefits in the future. In addition to the county and statewide benefits, the aggressive commitment to energy efficiency provided the opportunity for program participants to reduce their energy bills.
Participant spending in Boulder County alone contributed to 85 short-term jobs, over $5 million in earnings, and almost $14 million in economic activity in Boulder County. Participant utility bill savings totaled about $125,000 for the current year. For the state as a whole, program spending supported another 41 short-term jobs outside of Boulder County, $2 million in earnings, and almost $6 million in economic activity. Viewed in the long term, analysis of an ongoing CSLP program with similar participation levels results in significantly greater savings.
The economic impacts noted here and discussed in this section, above, occur in a context that is more fully described in Section 3, Qualitative Assessment. For overall CSLP conclusions and their more general implications for PACE programs, see the discussion in Section 4.
3 Qualitative Assessment of CSLP
3.1 Purpose and Approach The economic analysis presented previously tracks spending and jobs development that can clearly be traced to Boulder County ClimateSmart-financed spending. Anecdotal reports from this and other PACE programs suggest there are other influences that may be significant as well.
For example, reports from PACE programs nationwide concur that economic activity inspired by a local PACE program, but ultimately using other forms of financing, may be significant.