The energy efficiency industry cluster includes more than a thousand firmsacross  Oregon and the Northwest region with a diverse set of products and services, holding in common their capacity to reduce energy in use and cost in commercial, industrial, and residential buildings.

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 their capacity to reduce energy use and cost in commercial, 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 jobs in the trades, 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 and pays competitive wages.

This cluster has enormous potential for leading and innovating not only a new energy economy in the United States, but a foundation for gowth across the entire economy.  The energy efficiency cluster helps all other industry clusters become more competitive and profitable by eliminating wasted energ and redeploying that financial resource toward economic gain.  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 1,200 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.

Northwest Environmental Business Council (NEBC) is a regional trade association representing companies working in the energy and environmental sectors. It supports its members in the areas of business development, education, information dissemination, and regulatory and legislative advocacy.

Clean Energy Works Oregon (CEWO) is a non-profit program established to reduce energy waste by encouraging homeowners to take direct action.

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 history 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.
  • Clean Energy Works Oregon simplifies residential energy efficiency improvements
  • 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
  • Strong government awareness and support, both at the state and local community level

Cluster Challenges

  • Energy efficiency investments often have higher first costs (but lower life cycle costs) necessitating capital availability.
  • 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.
  • Energy efficiency not yet being acquired at the scale commensurate with the cost and availability of the resource
  • Current low natural gas prices complicate business case development for some efficiency investments.

Recent Accomplishments

  • The Energy Trust of Oregon is 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 (2013) ranked #4 in a state scorecard for energy efficiency.
  • Pilot program to test “pay for performance” energy efficiency approaches part of Energy Trust 2014 plan.
  • 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.
  • 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

  • Support Governor John Kitzhaber’s plan for meeting 100% of electricity load growth through energy efficiency
  • Improve cost effectiveness methodologies that artificially restrict the market for energy efficiency investments
  • Improve the alignment of utility business models with the aggressive acquisition of energy efficiency
  • 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.
  • Enact energy performance disclosure requirements creating market transparency for building energy use.

Cluster Contacts

Stan Price

Northwest Energy Efficiency Council

(206) 292-5592