A REPORT FROM THE DONALD VIAL CENTER ON THE GREEN ECONOMY
This brief estimates the investment needed, and the jobs this investment would generate, to achieve zero net energy (ZNE) in all Municipal, University, School, and Hospital (MUSH) sector buildings in the Southern California Regional Energy Network (SoCalREN) territory. SoCalREN is a ratepayer-funded program regulated by the California Public Utilities Commission (CPUC) and serving public agencies and their constituents in the Southern California Edison (SCE) and Southern California Gas Company (SCG) service territories. This report was carried out at the request of the SoCalREN and its workforce development partner, Emerald Cities Collaborative, whose mission is to both reduce the region’s energy consumption and create quality jobs and job opportunities for residents in the region.
ZNE for existing buildings is achieved by first making deep reductions in energy use and then generating the remaining energy needs from on-site renewable generation. While the exact level of energy reductions needed to make a building ZNE-ready depends on a variety of factors, including building size, energy use, space constraints, and operational patterns, we assume, based on available information on completed ZNE retrofits, that at least a 45 to 60 percent energy reduction is necessary to feasibly prepare MUSH buildings in the SoCalREN territory to achieve ZNE. We present two ZNE scenarios using two combinations of energy efficiency retrofits and on-site solar photovoltaic (PV) system installations for the remaining energy needs. We find that deeper levels of energy efficiency lead to lower total costs, since at least within this range, energy efficiency is more cost-effective than PV.
- Scenario 1 assumes a 60 percent reduction in energy use in all MUSH sector buildings, requiring an investment of $14.1 billion, and energy generation by on-site solar PV systems for the remaining 40 percent of energy demand, requiring an investment of $21.4 billion, at a total cost of $35.5 billion.
- Scenario 2 assumes a 45 percent reduction in energy use in all MUSH sector buildings, requiring an investment of $10.6 billion, and energy generation by on-site solar PV systems for the remaining 55 percent of energy demand, requiring an investment of $29.4 billion, at a total cost of $40 billion.
These numbers show that there is an enormous gap between the investment needed to achieve ZNE and the current levels of incentives and public investments for energy upgrades in all MUSH sector buildings. While the goal that the CPUC has adopted is less ambitious, requiring that 50 percent of existing commercial buildings should be ZNE by 2030, this study shows that the investment deficit needed to achieve this goal is huge. In the SoCalREN territory, SCE and SCG allocated $256 million for commercial and public sector energy efficiency programs during the 2013-14 program cycle and SCE currently spends about $100 million each year on two distributed generation programs. Only a portion of these program funds are available for MUSH sector buildings. Proposition 39 funds are available for school retrofits in this region, and there are a number of other potential funding sources. In total, however, achieving ZNE for all (or half of) MUSH buildings in the SoCalREN region would require substantially more public and private investment.
More investment will produce more jobs. We estimate that achieving ZNE on all MUSH sector buildings in the SoCalREN territory would create between 177,300 and 189,200 direct job-years. One job-year is equal to one full-time job that lasts for one year.
- In Scenario 1, energy efficiency retrofits would create 87,420 direct job-years and on-site solar PV installation would create 89,880 direct job-years, for a total of 177,300 job-years.
- In Scenario 2, energy efficiency retrofits would create 65,720 direct job-years and on-site solar PV installation would create 123,480 direct job-years, for a total of 189,200 job-years.
- If investments to achieve ZNE were spent over a five-year period, this would create between 35,460 (Scenario 1) and 37,840 (Scenario 2) direct full-time jobs annually.
- If the same investments were spread across 10 years this would create between 17,730 (Scenario 1) and 18,920 (Scenario 2) direct full-time jobs annually for 10 years.
- Investments spread across 15 years would create between 11,820 (Scenario 1) and 12,613 (Scenario 2) direct full-time jobs annually. This investment period aligns with California’s goal for 50 percent of existing commercial buildings to achieve ZNE by 2030.
ZNE investments will also create indirect jobs in the supply chain for ZNE projects and induced jobs by increasing regional demand for goods and services. We forecast that between 461,718 (Scenario 1) and 509,248 (Scenario 2) total job-years—including direct, indirect, and induced job-years—would be created in the SoCalREN region if all MUSH sector buildings were retrofitted to ZNE based on 60 percent and 45 percent energy reduction, respectively.
Annual construction apprentice openings, which provide unskilled, entry level workers with career-track job opportunities, will also vary based on the time period for investment.
- If investments to achieve ZNE were spent over a five-year period, we estimate that this would produce between 4,019 and 4,289 annual apprentice openings for five years.
- If investments were instead spent over 10 years, the number of annual apprentice openings would be between 2,009 and 2,144 openings annually for 10 years.
- Investments spread across 15 years would create between 1,340 and 1,430 annual apprentice openings for 15 years.
Investments to achieve ZNE in SoCalREN MUSH sector buildings will create a significant number of job and training opportunities for Southern California workers while helping the state meet its energy efficiency and clean distributed generation goals.
These are gross job projections, i.e. they do not subtract out jobs that would otherwise be created from power sold by the utilities. Estimating net jobs is difficult for a variety of reasons, including because jobs in the traditional power sector may or may not be located in the SoCalREN region. Studies show that energy efficiency and distributed solar generation are more labor-intensive than power plant generation, so we believe there is positive net job creation but since we cannot quantify it, we only report gross job creation here.