FOR RELEASE: September 4, 2014
AAEF Releases Full Report on Economic Impact of Utility Energy Efficiency Programs
Little Rock, AR – The Energy Efficiency (EE) industry in Arkansas has developed into a strong and reliable job creator in Arkansas since the Energy Efficiency Resource Standard (EERS) went into effect in January 2011, according to data released today by the Arkansas Advanced Energy Foundation (AAEF).
“The Economic Impact of Energy Efficiency Programs in Arkansas”, authored by local economist James Metzger, CEO of HISTECON Associates, reports the first-ever attempt to identify and contact the hundreds of individual companies that work with Arkansas public utility companies as energy efficiency contractors throughout the state. Based on survey data, the study estimates that 9,000 jobs and $1 billion in sales have been generated by companies doing business in the EE sector. These are good-paying jobs that average more than $20.00 per hour for skilled labor, which is well above the state average wage
Importantly, the AAEF study shows that EERS programs have boosted sales for all Arkansas energy efficiency contractors by 44% during and through the end of 2013. This figure is much higher for smaller, Main Street companies which have experienced an 86% sales growth as a direct result of utility EE programs.
This economic growth in the EE sector through the end of 2013 is a positive antidote to the reported trend in overall job stalemate in the state, especially when considering that wages in the EE sector are higher than most of the employment categories open to many Arkansans.
In December 2010 Arkansas adopted a comprehensive set of policies on utility energy efficiency programs, including an EERS, when the Arkansas Public Service Commission (APSC) issued 10 Orders designed to expand the energy efficiency efforts of Arkansas utilities, requiring the utilities to be more aggressive in their efficiency investments.
“From the outset of the EERS programs, it seemed clear that an exciting potential existed for EE work to have a strong positive effect on the overall economy that would offset the perceived yet uncertain cost of energy-savings policies,” said Metzger. “With this report, AAEF is able to document for the first time that the potential is already being realized, and that the roots of future growth and even more positive impacts have taken hold in Arkansas.”
The AAEF study mapped the location of the utility EE contractors demonstrating both the large number of contractors (675 businesses both in-state and out-of-state) and the wide distribution of their locations.
“Arkansas continues to be a leader in the energy efficiency sector across the Southeast, and this is due to the strong policies that we have in place,” notes Steve Patterson, Executive Director of AAEF. “This study shows conclusively that the net benefits of energy efficiency programs greatly outweigh the costs. It is important that Arkansas continue these policies and continue to lead the way with new EE policy innovations that both create jobs and strengthen the overall economy in the state.”
In addition, the benefits from the EERS program continue to produce increased energy savings for the state. The annual reports filed at the APSC by Arkansas utilities document that the EERS program is having tangible results on energy demand in communities throughout the state, which in turn means that family and firm budgets will have more to spend on other goods and services, and these expenditures will help local economies grow faster than before.
Another benefit is the shift of jobs from the energy-production sector – a capital-intensive area of the economy – to construction trades and the general economy which actually creates more jobs per dollars spent. While the energy sector produces about 10 jobs for every $1 million invested, on average the construction sector creates about twice that amount of employment for the same dollar investment.
According to updated economic formula, the indirect impact of this work is another 2,000 jobs in related sectors and output of more than $300 million. Total impact of energy efficiency spending in the state comes to $1.3 billion and 11,000 jobs. These indirect effects are important contributions to many of the small economies in Arkansas.
Arkansas Advanced Energy Association is a business group dedicated to growing Arkansas’s economy by expanding our energy workforce and manufacturing base through the increased development, manufacture, and utilization of advanced energy technologies. www.arkansasadvancedenergy.com
The Arkansas Advanced Energy Foundation is the educational affiliate of the AAEA. The Foundation promotes greater public understanding of advanced energy in Arkansas through research, public education programs and economic and workforce development. The Foundation is dedicated to informing the energy policy debate with well-researched, fact-based data on the advanced energy economy in Arkansas and by providing a public forum where state leaders can address Arkansas’s energy challenges for the future. www.arkansasadvancedenergyfoundation.org
Report Shows Global Economic Impacts of Advanced Energy
A report released in January 2013 by Advanced Energy Economy (AEE) shows that advanced energy was a $1.1 trillion global market in 2011, larger than pharmaceutical manufacturing worldwide. Read the full report here: http://arkansasadvancedenergyfoundation.org/files/dmfile/AEEIEconomicImpactofAdvancedEnergy-Final.pdf
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