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Industry Overview
Economic Impact
Cluster Organizations
Cluster Strengths
Cluster Challenges
Recent Accomplishments
Key Initiatives
Cluster Contact
Industry Overview
The energy efficiency industry cluster includes more than a thousand firms across Oregon and the Pacific Northwest region with a diverse set of products and services, holding in common thier capacity to reduce energy use and cost in commericial, industrial, and residential buildings. Cluster components include energy services companies, utilities, construction, manufacturing, distributors, consulting firms, design services (architectural and engineering), commissioning/retro-commissioning, evaluation, measurement, & verification, residential weatherization, and home energy performance. A number of these sales and professional service positions support trades positions such as plumbers, pipefitters, sheet metal workers, and electricians. Home energy performance contractors offer entry points for new careers in clean energy. This cluster supports the largest network of "green jobs" in the State of Oregon. Wage rates are competitive and job growth in the cluster is strong.
This cluster has enormous potential for leading and innovating a new energy economy in the United States. Serious greenhouse gas reductions strategies are built on a foundation of maximum penetration of energy efficient technologies in the built environment. Utility economics favor energy efficiency as the lowest cost resource to meet future electrical energy needs in the state, region, and country. Developing economic capacity at a multiple of 2 to 4X is realistic and would result in the creation of tens of thousands of new jobs in the state.
Economic Impact
The industry cluster includes over 1200 companies comprising of a broad range of products and services. Estimates of annual sales from this cluster are as high as $1B. Recent studies estimate that Oregon has one of the highest “green job” counts of any state (weighted by population) and the majority of those green jobs are in the energy efficiency sector. Wages across the cluster vary by company type, but the high incidence of engineering and skilled trades positions result in wage rates higher than state averages. Energy efficiency investments tied to construction projects conservatively create 10 direct jobs per $1M of construction activity.
Cluster Organizations
There are a number of industry specific organizations and trade associations representing the cluster:
Northwest Energy Efficiency Council (NEEC) represents and promotes market opportunities for companies in the energy efficiency industry in the northwest. NEEC is a regional trade association representing a broad array of business types that have energy efficiency as a core product and service function.
Northwest Energy Efficiency Alliance (NEEA) is a non-profit organization working to maximize energy efficiency to meet our future energy needs.
Energy Trust of Oregon is a non profit administrator of electricity and natural gas energy efficiency programs.
The cluster also includes members of the American Institute of Architects; American Society of Heating, Refrigeration, and Air conditioning Engineers; Illumination Engineers Society; and several trade unions.
Cluster Strengths
- Twenty-five year histroy of delivering building-related energy solutions for Oregon customers.
- Partnerships with Oregon utilities and the Energy Trust of Oregon.
- World class businesses known as national leaders and innovators in green and efficient building design and technologies.
- A business case for products and service that offer triple bottom line advantages.
- State tax credits which encourage investment by building owners in energy efficiency.
- Efficiency is the "first fuel" in a new energy economy that is focused on carbon reduction.
- Energy efficiency is a high yield, low risk investment for building owners
Cluster Challenges
- Energy efficiency investments often have higher first costs (but lower life cycle costs) necessitating capital availability. The current economic downturn has limited access to capital for building owners to make prudent investments to improve the energy performance of their properties.
- End use customers remain unaware of capital investment grade opportunities on their properties
- Split incentive challenges -- tenants pay energy costs, but property owners make infrastructure investment decisions.
- Workforce needs of the industry are not being adequately met by education and training institutions
Recent Accomplishments
- Organizations such as the Energy Trust of Oregon or Bonneville Power Administration are exceeding targets for energy efficiency. The cost of the acquisition of this resource is a fraction of the marginal cost of new traditional generating capacity. Oregon was recently was ranked #3 in a state scorecard for energy efficiency.
- Oregon is one of the national leaders in the design and construction of buildings, earning recognition from the Leadership in Energy and Environmental Design (LEED) rating system.
- NEEC produced a report on energy efficiency cluster workforce needs that finds Oregon companies bullish on job growth potential.
- Energy efficiency is increasingly being included as a key national strategic priority. The Northwest Power and Conservation Council’s 6th Power Plan identifies energy efficiency as the predominant resource for meeting electricity needs for the state over the next 20 years.
Key Initiatives
- Maintain the Business Energy Tax Credit (BETC) for energy efficiency investments. The BETC, created two decades ago to stimulate investments in energy efficiency, is one of the main drivers behind the development and growth of the energy efficiency industry cluster. BETC has been and can continue to be a positive economic contributor to the state by stimulating job creating investments in energy efficiency projects and accelerating the acquisition of low cost energy efficiency resources for Oregon’s energy future.
- Establish policies and programs that facilitate adequate capital access, especially those with attractive terms and low transaction costs. There is a need for innovative capital financing mechanisms to help Oregon energy consumers meet the first cost investment challenge of making cost effective energy efficiency improvements in homes, businesses, industry, and agriculture across the state.
- Pass carbon policies at the federal and state level that provide clear market signals on the advantage of improved energy performance.
- Promote regulatory flexibility to ensure sufficient opportunities for new approaches and successful deployment of new efficient technologies in the field.
- Encourage cluster employers to work closely with education and training institutions to develop curriculum and in-field experiences to prepare students for work in the industry.
- Deploy ARRA energy efficiency funds in a manner that cultivates a long term and sustainable market for energy efficiency.
Cluster Contact
Stan Price
Northwest Energy Efficiency Council
(206) 292-5592