Growing the Energy Efficiency Workforce Research Series
In Illinois, nearly 10,000 energy efficiency jobs have been lost since the beginning of the pandemic. How can we learn from previous crises to guide recovery efforts to help the energy efficiency workforce not only bounce back but bounce forward? SEDAC's research into workforce resilience explores some lessons learned from past crises, including the financial crisis of 2007 and 2008, natural disasters, and 9/11. These lessons learned can guide our efforts as we seek to rebuild the energy efficiency workforce in a more equitable way.
Lesson 1. Develop shovel ready programs to tap into funding opportunities.
In an effort to save existing jobs and create new ones during the financial crisis of 2007 and 2008, the American Recovery and Reinvestment Act of 2009 (ARRA) established an economic stimulus package estimated at $831 billion (Congressional Budget Office, 2012). ARRA included an allocation of $27.2 billion for energy efficiency and renewable energy research and investment. The Alliance to Save Energy (2013) describes the ARRA as the “single largest investment in energy efficiency in U.S. history.” One of the primary purposes and promises of the Act was to launch a large number of “shovel ready” projects that would generate jobs (Calmes & Hulse, 2009). However, a sizable number of these projects, most of which pertained to infrastructure, required longer to implement than expected and never came to fruition (Cooper, 2010). This was largely attributed to the regulatory process that is involved in such projects.
In contrast, the ARRA expenditures for energy efficiency and renewable energy required less regulatory burden and were, by-in-large, successful at stimulating job creation in the relevant energy sectors (Lim, Guzman & Bowen, 2020). Though the American Recovery and Reinvestment Act of 2009 had its setbacks, many energy efficiency organizations used funding to successfully increase demand for services.
Energy efficiency stakeholders looking for support should pursue resources built into existing and future federal and state stimulus package and stay abreast of legislation to come. If the energy efficiency industry wants access to stimulus funding, having “shovel ready” projects will be crucial, as will identifying ways to more successfully navigate and streamline complex regulatory processes. The Alliance to Save Energy’s proposals for federal stimulus funding provide opportunities for developing “shovel ready” retrofit projects for small businesses, mission critical facilities, and transportation infrastructure (rest stops, airports).
It's important to note, however, that many organizations that serve underserved and economically distressed communities may not have the resources to develop "shovel ready" projects, nor the access to funding pipelines. To rebuild in an equitable way, support needs to be provided to these organizations to help them access funding opportunities.
Lesson 2. Develop criteria for prioritizing programs.
There is no shortage of suggestions for how to help the energy efficiency workforce rebound, grow, and become more resilient. Yet, it can be challenging to decide how to prioritize strategies when budgets are tighter than ever and resources are limited. The Urban Land Institute (2013) offers recommendations for prioritizing programs, in the context of rebuilding key infrastructure after natural disasters. They recommend criteria for prioritization that include assessment of criticality of need, protection of market value, potential market value to be created, and additional performance considerations. Energy efficiency programs are more likely to secure funding and be considered "essential" if they meet these criteria.
Do the programs not just make buildings more efficient but also address other critical needs such as mitigating risks from natural disasters or making buildings healthier as a response to the pandemic? Do they address multiple vulnerabilities in the system? Do they protect the market value of critical infrastructure? Do they provide opportunities to enhance market value, add jobs, or create new revenue streams? Are they easily executed and delivered? Is future funding likely to be available? Answering these questions can offer guidance for which new programs to pursue, and can also provide avenues for selling energy efficiency programs at a time when resources are scarce.
Lesson 3. Pay attention to the winners and the losers
The economic recession of 2008 and 2009 had a disproportionate impact on communities of color and young people (Kalleberg & Wachter, 2017). African American and Latino homeowners experienced higher rates of default on mortgages and foreclosures than white homeowners. They were also more likely to lose their jobs or experience large drops in their wages.
Young workers entering the job market in 2008 and 2009 also experienced more adverse effects, which have extended in the 12 years since the start of recession (ibid.). These workers experienced lower earnings during the recession and afterwards, accepted worse jobs, and subsequently saw reductions in their wealth accumulation, health and wellbeing. They delayed milestones such as forming a family and buying a home, and were less likely to have confidence in public institutions and believe that hard work pays off.
We are only beginning to see the impacts of the pandemic and subsequent recession on vulnerable populations, but it is already clear that there are outsized impacts for certain minority populations. It’s also clear that young workers entering the job market are being severely impacted. The energy efficiency workforce will need to be proactive in developing programs that can help these individuals gain access to quality training and jobs so that racial and economic disparities do not widen, as is typical in recessions.
Lesson 4. Leverage communication channels to support rapid development of programs
Many states invested in energy efficiency and green jobs as a response to the 2008 recession. Some states like Illinois already had legislation in place requiring utilities and state energy offices to provide energy efficiency programs to meet energy savings goals. In 2008, the Illinois General Assembly passed a $31 billion capital investment program that included $4.4 billion in funding for building energy efficiency, mostly for public and state facilities and urban weatherization initiatives (Chicago Green Collar Jobs Initiative, 2009).
This increase in funding for energy efficiency services prompted increased investment in job training programs. The Chicago Green Collar Jobs Initiative identified job shortages in several key energy efficiency occupations, including certified assessor/auditor, site supervisor, contractor, and measure installer. They noted that Illinois, and the Chicago region in particular, was well positioned to respond to the increasing demand for energy efficiency services because of the following assets:
- A strong regional workforce development infrastructure, with workforce boards and community colleges that work together to identify and meet needs
- A track record of developing sector-specific workforce strategies, working with local workforce investment boards to grow businesses
- Experience in green curriculum development
- Funding opportunities. Illinois prioritized some of the ARRA and state building energy efficiency funding for training programs, and stakeholders applied for jobs-related grants
- Existing provider base for green workforce strategies--including education and training providers with programs to prepare workers
These assets are likely to support job growth in energy efficiency during the current crisis as well, provided that the funding opportunities are available. A strong regional workforce development infrastructure, with a strong existing provider and training program base, will be essential. This infrastructure may need to be mobilized quickly to take advantage of funding opportunities.
Lesson 5. Emphasize the secondary benefits of energy efficiency
Litman (2017) interviewed Jim Barrett, chief economist at American Council for an Energy-Efficient Economy (ACEEE) to explore why some states invested in green jobs during the recession (including energy efficiency) while others did not. States with high energy prices were much more likely to invest in green jobs, while some states invested in green jobs despite low energy prices because of “strong political will.”
Barrett noted that states considering investing in green jobs during the recession had to consider opportunity cost: “When you think about spending to create green jobs, you also have to think about what that money would have done otherwise.” He admits that there are alternative investments that could potentially create more jobs, but argues that states should consider the “secondary benefits” of green jobs. Energy efficiency, he explains, gives businesses a competitive advantage, reducing their operating costs. Investing in energy efficiency makes states “a more competitive home for business” and opens the door for businesses to grow and create more jobs. It creates safer, more comfortable, and healthier indoor environments. States that recognized these benefits were more likely to invest in green jobs. State agencies such as the Department of Commerce and Economic Opportunity are ideally situated to promote clean energy jobs as an economic opportunity, not just an environmental opportunity.
Lesson 6. Spur job growth through government mandates
One way to increase demand for energy efficiency services and generate jobs during a recession is to push for legislation that mandates energy efficiency. In New York, the Greener, Greater Buildings Plan (enacted in 2009), required annual benchmarking and energy audits every 10 years for large buildings, adoption of energy codes, and code-compliant lighting in commercial spaces. These laws were estimated to generate $700 million in savings and create roughly 17,800 construction jobs (Casey, 2013). Small energy efficiency contracting businesses saw a huge surge in employment because of this act.
Lesson 7. Increase collaboration among stakeholders
Research on natural disasters can provide some guidance on how we might cope with the current crisis. One approach encourages increased collaboration among stakeholders including governments, higher education, nonprofits, and industry. For example, in response to natural disasters, the NSF-sponsored Build Efficiency for a Sustainable Tomorrow Center established communications between industry and educational institutions that support 2- and 4-year college programs in energy efficient building systems (Mosley, 2018). The same study looked at how the Emerald Cities E-Contractors Academy provided training for small, minority, women or veteran owned energy efficiency retrofitting contractors in the aftermath of a natural disaster. Emerald Cities helped connect companies to apprentice pipelines within their states’ union networks.
Lesson 8. Ensure long-term sustainability of programs
In another example of recession-funded energy efficiency, the Corporation for Ohio Appalachian Development (COAD) utilized $62 million in ARRA weatherization funding for two years, and was able to expand its workforce by 400 people (Casey, 2013). Manufacturers of insulation equipment also experienced significant job growth as a result of this funding. Unfortunately, this funding disappeared after two years, and COAD was forced to lay off many of these workers. While federal stimulus funding may provide essential funding for a short period of time, lawmakers, utilities and other programs need to work together to ensure the long-term sustainability of such efforts.
Lesson 9. Don't neglect employee wellness
Kleinberg (2004) explored how workers developed “worker’s block” in the weeks and months after 9/11. Many employees were emotionally disengaged. They had “diminished interest or participation in significant activities, feelings of detachment or estrangement from others.” Kleinberg warns that if organizations ignore these problems and don’t take steps to build employee morale and foster cooperation, worker’s block can lead to reduced performance and threaten the health of the organization.
Kohll (2017) contends that workplaces are more resilient when employees have a group of people who can build them up when times are tough. What makes the current situation so challenging is that employees are physically removed from the people who can build them up. It will take extra effort to build employee morale and foster cooperation in the current situation, but the cost of ignoring such efforts could be severe.
Governments and businesses are recognizing that supporting employees during times of crisis can be a cost-saving measure. While discussing the impact of California wildfires, Deloitte (2019) points out that it is often more cost effective to provide for the physical and emotional needs of employees during a crisis, rather than recruiting and training new employees if a natural disaster or global pandemic displaces workers or takes them out of commission for a while. While individual businesses can develop their own policies and programs regarding sick leave, wellness services, and disaster response, broader changes and employee protections could make a much bigger impact: small business loans so that employers don’t have to fire and rehire employees, generous sick leave and parental leave packages, and universal health care and preschool, to name a few. Ameren Illinois can set an example for other companies by providing robust wellness services, employee benefits and protections, and encourage other organizations to do the same—especially its partner organizations.
Lesson 10. Provide opportunities to learn, in response to changing circumstances
After a major earthquake in Christchurch, Wilkinson and colleagues (2017) noted that “most subcontracting businesses [were] not well equipped with business knowledge and thus jeopardize[d] the permanency of their businesses.” Specifically, subcontractors had defective managerial skills and financial literacy, making it challenging for them to manage the increased demand for contracting services in the aftermath of the earthquake. When contractors were given opportunities to enhance their business knowledge, they developed more resilient business practices. They were able to strengthen their core businesses, diversify their business operations, find flexible ways to meet challenges, and improve their finances.
Ameren Illinois has provided similar training opportunities for minority businesses through a partnership with the Minority Business Development Center (MBDC) in Peoria. This spring, they offered a “boot camp” for five diverse-owned businesses that received individualized coaching to help them expand their energy efficiency work. Training topics included licensing and certification, quickbooks and accounting, preparing financial statements, operations and administration, contractor insurance, safety, and customer services. MBDC also provides back-office support to participating contractors, including invoicing and program documentation. These opportunities are likely to be especially valuable during the pandemic as small businesses are struggling to recover from the economic impacts of the pandemic.
Lesson 11. Plan for the next crisis
If there’s anything that the pandemic has taught us, it’s to plan for the unexpected. Obviously, a system or organization that has a plan in place will be more resilient when the next crisis comes. Based on their review of responses to California wildfires, Hirsch and Strawser (2014) describe how organizations can plan for unanticipated long-term disruptions, using some basic crisis management principles. They recommend
- developing a base plan for all business functions
- streamlining the decision-making process
- recognizing remote workforce challenges and opportunities (for staff, contractors and program administrators, who may need training, accommodations, and extra time to complete work)
- establishing relationships and agreements with recovery providers far in advance
- being present and visible
- developing internal resources
- developing multiple channels of communication so that critical information is readily accessible before and after a disaster