TODAY’S STUDY: STATE WORKERS CAN LEAD EFFICIENCY

For 40 years, California has led the way in boosting energy efficiency. With innovative policies instituted in the 1970s, it has reduced its energy intensity while growing its economy and expanding its green jobs market at nation-leading rates.

California’s average consumer today uses only two-thirds of the energy of the average U.S. consumer (and generates about half the greenhouse gas emissions).

The keys have been better appliance standards, better building standards, and a pioneering “decoupling” program that “decouples” utility profits from electricity sales by rewarding utilities for better customer efficiencies.

As other states institute energy efficiency resource standards (EERSs) and decoupling programs that will bring them into line with California, leaders on the Crazy Coast are moving on to a new idea: Training workers to be more efficient and build better efficiency.

As the report highlighted below makes clear, the opportunity runs the gamut from blue-collar skills and on-the-job training programs to university and graduate school research and management curricula.

This is far more than just another jobs scheme. It is expected to create over 200,000 new jobs in California by the end of this decade. At the same time, it will continue California’s drive toward reduced reliance on Old Energy sources.

And, because every dollar invested in energy efficiency saves three dollars in energy costs, the enhanced efficiency will fund the California utilities’ building of New Energy infrastructure as they transition to a New Energy economy.

California Workforce Education and Training Needs Assessment for Energy Efficiency, Demand Response and Distributed Generation
Carol Zabin, Karen Chapple, Ellen Avis, Jessica Halpern-Finnerty, et. al., March 2011 (Center on Employment in the Green Economy/U.C. Berkely)

Executive Summary

Purpose and Scope

This report presents the results of the California Workforce Education and Training Needs Assessment for Energy Efficiency, Demand Response, and Distributed Generation (CA Workforce Needs Assessment, or the WE&T Needs Assessment), conducted throughout calendar year 2010. It has benefitted from the contributions of many individuals and organizations, including those who helped plan and participated in the December 2010 Workforce Strategies, Energy Efficiency, and Green Jobs Summit…

Why A Workforce Needs Assessment

The WE&T Needs Assessment was called for in the California Long Term Energy Efficiency Strategic Plan (EE Strategic Plan).2 The EE Strategic Plan, adopted by the CPUC in September 2008, provides a road map for a dramatic scaling up of statewide efforts to meet California’s clean energy goals for energy efficiency.3The objective of the Plan is to compel sustained market transformation, thus moving California toward long-term deep energy savings in the residential, commercial, industrial, and agricultural sectors of its economy. The EE Strategic Plan is a central element in the implementation of the California Global Warming Solutions Act of 2006 (AB 32) and is also a main component of the implementation of AB 758, California’s Comprehensive Energy Efficiency Program for Existing Residential and Nonresidential Buildings law, passed in 2010.

Workforce Education and Training was one of the key issues addressed in the EE Strategic Plan, with this WE&T Needs Assessment identified as a necessary first step to guide further action. The importance of the workforce in achieving the state’s clean energy goals was articulated in the EE Strategic Plan in the following vision statement:

“By 2020, California’s workforce is trained and fully engaged to provide the human capital necessary to achieve California’s economic energy efficiency and demand-side management potential.”

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The Plan also recognizes the impact of energy efficiency programs and policies on career opportunities for California’s students, job seekers, and workers. It specifically calls for promoting the inclusion of low-income, minority, and disadvantaged communities in energy efficiency training programs; establishing energy education and training for employment in the energy efficiency workforce at all levels of California’s educational system; and engaging in a collaborative effort among state agencies, educational institutions, community-based and non-profit organizations, private industry, and labor to these ends. This direction explicitly articulates the importance of equity issues and career opportunities for all Californians, not only those with ready access to college and professional jobs. It also recognizes that developing a qualified energy efficiency workforce involves working with collaborators from the workforce community who have as their primary goal improving job opportunities and workforce outcomes for Californians.

The CPUC’s mandate is focused on the regulation of the energy and several other industries, but as a driver of investment in energy efficiency and related activities its actions impact the quantity and kinds of jobs that are created in the state. The CPUC’s recognition that its work affects the state’s workforce goals is analogous to its early foresight that achieving the state’s environmental objectives is intertwined with and heavily influenced by state energy policy.

The dual goals of clean energy and improving job opportunities and workforce outcomes for Californians, including those from disadvantaged communities, has led the WE&T Needs Assessment to focus explicitly on strategies that value both of these two goals, as well as to identify the trade-offs between these goals where they exist. The conceptual framework for connecting these goals is based in business and economic literature and is known as high-road economic development. High-road economic development consists of a market environment that favors business strategies built on quality work and innovation, resulting from investments in a workforce that is both highly skilled and rewarded for those skills. Such workforce investments, in turn, encourage the development of a stable and professionalized workforce with the capacity to adapt to new technologies and practices. In contrast, low-road economic development consists of a competitive environment that favors competing on the basis of cost rather than quality. This leads to jobs that do not pay as well and/or do not have career ladders and results in higher turnover, undermining worker and employer incentives to invest in training.

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Summary Of Results…

The condition of the California economy sets the overall context for analyzing the impact of energy efficiency and related policies and programs on jobs, and subsequently the possible need to adjust workforce development policies and programs. At present, two major problems plague the California economy. The first, a result of the Great Recession and the jobless recovery, is California’s unemployment rate, which remains at over 12 percent as of early 2011. The second problem is the long-term structural bifurcation of the state’s labor market into well-paid, higher-skill jobs and low-wage, lower-skill jobs, with little growth of jobs in the middle.

This situation has two implications for the WE&T Needs Assessment. First, the high and persistent unemployment rate means that, at present, there is a large queue of unemployed workers, particularly in the construction sector, where the number of jobs dropped over 40 percent since the peak in 2006. Second, the bifurcation of the labor market means that, without specific policy interventions, the jobs created by the investments in energy savings will mimic the wage disparities seen in the rest of the economy, with some high-wage jobs in professional occupations and many low-wage jobs for those without a college degree. These wage disparities have immediate and serious social implications for families and communities in California, and they ultimately affect the competitiveness and efficiency of the California economy…

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JOB IMPACTS AND LABOR SUPPLY

The WE&T Needs Assessment forecasts the number of jobs that will be created in 2010, 2015 and 2020 as a result of the energy efficiency and related policies and programs in California, using a variety of modeling and estimation techniques and three scenarios for levels of investment (low, medium, and high) during the next ten years. Using our medium scenario, we project these programs and policies will result in an investment of about $11.2 billion dollars from ratepayers, state, federal, and private sources for 2020, as shown in Figure 1, up from an investment of about $6.6 billion in 2010. This investment is projected to create a total of 211,000 jobs for that year, including direct jobs generated by the investments in energy efficiency activities, indirect jobs resulting from demand for inputs for these activities, and induced jobs resulting from the increased household and business incomes and reduced energy expenditures from these activities. These are person-year jobs, meaning that each job represents one full-time, one-year job, not one permanent job. This forecast shows that energy efficiency and related investments resulting from programs and policies identified in this report provide a significant stimulus to the California economy.

The number of directly-generated jobs in energy efficiency and related activities is projected at 52,371 full-time equivalent jobs for the year 2020; the remaining jobs are the result of the indirect and induced labor demand. These direct jobs represent a significant growth from the 27,718 total direct jobs we estimate were generated in 2010 from energy efficiency and related policies and programs. Direct jobs are the focus of this study because they are directly linked to energy efficiency and related activities and thus to the potential need for skill development.
As shown in Table 1, the number of trained workers needed to fill the new jobs created is projected to be at least 78,205 over the 11-year period beginning in 2010. This number is larger than the number of full-time equivalent jobs (38,937 net of 2009) because most jobs include both energy efficiency and other work. That is to say, the work from one new full-time equivalent job will distributed to more than one worker. To forecast training needs, the key estimate is the yearly increment of workers needed to fill new positions, above and beyond those hired in the previous year, since the latter were presumably already trained before hire. For the year 2020 alone, the number of new workers that require specific training in energy efficiency and related sectors is forecast at 5,262. Thus, from a total job creation forecast of 211,000 workers in 2020, the number of new slots available for workers needing specific skills in energy efficiency and related activities is only 5,262.

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Two-thirds of the direct jobs are expected to be in the construction trades (e.g., electricians, plumbers and pipefitters, sheet metal workers, carpenters, laborers, and construction supervisors). Another 17 percent of the jobs are in the fields of architecture and engineering, management, and public administration (including utility and third-party program administrators).
The remaining 16 percent are in manufacturing, advertising, office administration, and other industries.

Most of the new jobs are in traditional occupations, dwarfing the number of workers in new and emerging specialized occupations (e.g., solar installers or energy auditors). This finding is based on current staffing patterns; if specialized energy efficiency occupations become more prevalent over time, this balance may change. The degree of specialization depends partly on business decisions, but also on what certifications the state encourages and which training programs it funds.

At present, there are a significant number of unemployed and underemployed skilled workers in all of these industries. Graduates of training programs will compete against these experienced workers and can be expected to have difficulty in finding work utilizing their newly acquired skills, a point echoed many times in interviews we conducted with training providers as part of this study. In all sectors, this pool of unemployed workers is likely to exceed the number of new jobs created in the energy efficiency and related sectors at least until 2020.

In addition, the number of workers currently employed in energy efficiency and related occupations far outweighs the number of new workers that are projected to enter these fields through 2020. Some, if not many, of these incumbent workers are likely to require skills upgrade training as new best practices and new technologies are introduced.

The quantitative analysis shows that, at least through 2020, concerns about shortages of new workers for energy efficiency and related work are unwarranted, particularly for the most prominent energy efficiency occupations. There may be difficulty hiring for specialized niches, such as professionals with significant work experience, or short-term shortages for positions with new certification requirements, but these are the exception. In contrast, concerns about shortages of jobs for graduates from education and training programs are real and likely to persist through 2020, particularly for those with less than four years of college. As a result, great caution should be used in considering the funding of new training programs. For achieving energy efficiency goals the focus should be on upgrading the energy efficiency skills and knowledge of the incumbent workforce…

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Findings

The WE&T Needs Assessment findings provide the basis for developing the specific recommendations presented below.

Key findings from Part 1 of the WE&T Needs Assessment include:

→ The forecast of large overall stimulus and job creation coupled with the relatively small number of new jobs needing workers with specific training in energy efficiency and related skills;

→ The primacy of the building and construction trades, which make up about two-thirds of the overall jobs resulting directly from energy efficiency and related programs and policies;

→ The predominance of work in traditional construction trades, rather than in narrow specialized emerging occupations, disproving the view that such jobs are fundamentally different than other construction trades jobs, and highlighting the importance of greening the traditional trades;

→ The long queue of experienced unemployed workers, particularly in the construction trades;

→ The problems of work quality, particularly in residential and small commercial retrofit and HVAC, which are attributable to low-road market conditions and cannot be solved by training alone; and

→ The limited existence of industry recognized skill certifications in the relevant occupations.

Key findings from Part 2 of the WE&T Needs Assessment include:

→ The overabundance of training programs that can serve energy efficiency and related occupations, spread in many institutions but not coordinated under one strategy;

→ The availability of the state-certified apprenticeship infrastructure for the most prominent occupations, one of the few highly functional forms of training for middle-skill jobs, serving the needs of both employers and workers;

→ The availability of a strong public post-secondary education system (though now under acute budgetary pressure) that is effective for professional occupations requiring a four-year degree, but less so for other occupations;

→ The partial incorporation of energy efficiency skills and knowledge into apprenticeship programs and the two- and four-year colleges, and the opportunity for greater degrees of incorporation;

→ The particular weakness in articulated training paths or links to good jobs for the residential occupations compared to the more strongly articulated training paths in the professions and the commercial and public sector trades;

→ The lack of guideposts on which skills to train for, particularly in the residential sector, due to lack of industry recognized credentials;

→ The recent growth of short-term training for new workers in specialized occupations in private organizations and community colleges, which does not build on the strengths of California’s workforce infrastructure and may not lead to good careers for graduates.

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Recommendations

Our targeted recommendations fit into two overarching prescriptions that are driven by the state’s intertwined clean energy and workforce goals. They address the role that the California state government has in shaping the kinds of jobs that are created as the state moves towards a clean energy economy, as well as the role of the workforce development infrastructure in effectively responding to this economic restructuring. Implementing these recommendations will require some redirection of programs since clean energy programs have not consistently addressed their implications for the state’s workforce objectives. The recommendations are not limited to those that can be carried out only by the CPUC or the utilities, but rather are aimed at a broader set of state agencies and stakeholders that can drive the needed changes.
• CREATE AND ENFORCE STANDARDS to expand the higher quality segments of energy efficiency sectors: Establish policies and require utility and other publicly-funded programs focused on energy efficiency and other demand-side management activities to clearly delineate and align the skills, certifications, and additional standards governing workers and contractors, so that quality work conditions can be maintained and workforce planning can occur.
• IMPROVE WE&T PLANNING AND COORDINATION: Establish state-level policies, support effective collaborations, and provide incentives to improve workforce planning and coordination among clean energy agencies and workforce agencies, and among the major education and training institutions, particularly apprenticeships, community colleges, and utility training programs. Emphasis should be placed on sector strategies built on partnerships between business, labor, and training and educational institutions…

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RECOMMENDATIONS FOR CPUC, CEC, UTILITIES AND OTHER AGENCIES AND STAKEHOLDERS SUPPORTING INVESTMENT IN ENERGY EFFICIENCY AND DEMAND-SIDE MANAGEMENT ACTIVITIES

State agencies, utilities, and others involved in energy efficiency and related programs and policies should determine and align skill certifications and analyze costs and options for encouraging their adoption by industry in the following ways:

• INCENTIVE PROGRAMS: Require contractors who participate in energy efficiency rebate and incentive programs to have third-party certifications, licenses, building permits, and/or meet other relevant standards and certifications. Certification requirements should apply to both workers and contractors.
• DIRECT CONTRACTS: Award state and utility direct-install contracts using a best-value contractor rating system that includes documented history of high-quality work, hiring of workers with appropriate certifications, ongoing investments in worker training, and compliance with building codes and employment laws.
• LOW-INCOME STATE AND IOU RESIDENTIAL PROGRAMS: For fully subsidized low-income programs, modify program objectives to include workforce outcomes. Assess current workforce outcomes and if they are not adequate, use high-road agreements and sector strategies to pilot incorporation of the new national DOE skill standards and certifications or other strategies to improve both energy efficiency and workforce outcomes.
• ENERGY UPGRADE CALIFORNIA FOR RESIDENTIAL: Require Energy Upgrade partners and implementation contractors to include, not only building envelope standards, but also standards for HVAC installations and other building systems. Establish pilot programs that include high-road agreements as part of the portfolio of funded programs, paying particular attention to strategies that bundle jobs to achieve a large enough scale to attract a broad set of contractors, including those with strong administrative and training capacity.
• ENERGY UPGRADE CALIFORNIA FOR COMMERCIAL: Require the use of high-road agreements, including apprenticeship, prevailing wage, and local hire provisions. The use of high-road agreements will support higher quality installations, increase the benefits of training investments, and promote the achievement of California’s workforce goals.
• LICENSING: Review and, if warranted, change licensing requirements for building and construction trades contractors and technicians to ensure competency-based licensing.
• PUBLIC CHARGE REAUTHORIZATON: Include desired workforce outcomes in the list of goals for energy efficiency, low-income, and renewable energy programs (including distributed generation) with the reauthorization of the public goods charge.
• SECTOR STRATEGIES: Encourage drivers of energy efficiency investments to support sector strategies for deployment of new measures and technologies such as energy storage, integrated demand side management, commercial building benchmarking, and others, through co-funding, participation in setting work and skill standards, and serving as conveners of contractors and other key stakeholders.
• REPORTING OF WAGES, TURNOVER, AND OTHER LABOR CONDITIONS: Modify program evaluation methodologies and protocols for energy efficiency, demand response, and distributed generation to require the inclusion of worker outcomes, including compensation, benefits, turnover, and retention rates. Existing methodologies address energy and environmental costs and benefits but do not address workforce costs and benefits. Workforce issues affect both the costs and benefits of these programs, by way of the quality of installations and maintenance and the benefits associated with investments in training. Moreover, the achievement of the state’s energy efficiency goals needs to be considered alongside the achievement of the state’s workforce goals.

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RECOMMENDATIONS FOR WORKFORCE DEVELOPMENT POLICYMAKERS, FUNDERS, AND PRACTITIONERS

• SECTOR STRATEGIES: Support workforce development funders (including Workforce Investment Boards, the Employment Training Panel, etc.) and training and education institutions as they develop, serve as intermediaries for, and coordinate their programs with sector strategies. When key elements of sector strategies already exist, as in the case of the Western HVAC Alliance for example, the workforce development community should participate by providing co-funding and technical assistance on sector strategy best practices, in addition to providing training and education services.
• GREENING TRADITIONAL OCCUPATIONAL PROGRAMS: Incorporate energy efficiency skills and knowledge into traditional occupations in the construction trades and the relevant professions, particularly engineering and architecture. This greening should focus on the main training institutions of apprenticeship, community college, and four-year colleges, and be a preferred alternative to creation of new, shorter-term, narrowly focused programs in specialized skills related to energy efficiency.
• INCUMBENT WORKER TRAINING: Focus resources on incumbent worker training and journey upgrade training. Consider the adoption of meaningful continuing education requirements for licenses and certifications to support participation of incumbent workers in these trainings and to integrate energy efficiency into the main knowledge and skill base of the relevant professions and trades.
• COMMUNITY COLLEGE AND APPRENTICESHIP COLLABORATION: Promote system-wide collaboration between the community colleges and the apprenticeship programs at the pre-apprenticeship, apprenticeship, and continuing education levels. Leverage the strength of the community colleges in providing pathways for students from disadvantaged communities.
• CERTIFYING PRE-APPRENTICESHIP: Support and strengthen pipelines into skilled trades work, using models such as PG&E’s Power Pathways program, other successful community college pre-apprenticeship programs, and high school career academies. These pre-apprenticeship programs should be linked to state-certified apprenticeship programs and built on best practice models. Efforts to build stronger pipelines should be connected to clean energy investment policies, including high-road agreements with local hire clauses.
• DATA ON TRAINING OUTCOMES: Promote improved data availability on outcomes for training program participants by making available (with security safeguards) administrative data on employment of publicly-funded training program graduates. Job placement rates and career advancement should be adopted as priority metrics of program success. New policy is needed to make existing data available for research, while safeguarding privacy and confidentiality.

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RECOMMENDATIONS FOR CHANGES TO UTILITY WORKFORCE EDUCATION AND TRAINING PROGRAMS

• SUPPORT SECTOR STRATEGIES: Initiate, help fund, and partner with other organizations to develop robust sector strategies in key energy efficiency sectors such as HVAC, building operations and maintenance, benchmarking, and other emerging areas (as well as LIEE or other programs undergoing review or redesign).
• TRAINING CENTER CLASSES: Modify the structure of classes offered by the Energy Training Centers to increase the number of course series that are longer in length than current typical classes, focus on a specific occupation, have a workplace-based hands-on component, and offer clear learning objectives that lead to certification.
• COLLABORATIONS: Expand collaborations between the Energy Training Centers and building and construction trades associations. The emphasis should be on collaborations with high-road associations demonstrating commitment to investments in ongoing workforce training, such as participating in apprenticeship programs.
• CURRICULUM DEVELOPMENT OR UPDATING: Actively participate in the content development, review, and updating of curricula, and support instructor professional development for the main “home institutions” that train building and construction professionals and trades people, such as apprenticeship programs, community colleges, and four-year institutions. Energy Training Center staff should be encouraged to share their expertise as appropriate to ensure that curricula incorporate up-to-date information on new technologies and practices.
• GOALS FOR INCLUSION OF DISADVANTAGED WORKERS: Adopt as a goal for the Energy Training Centers the inclusion of low-income, minority, and disadvantaged workers and job seekers. Develop and implement specific programs in collaboration with organizations that have a track record in this arena, emphasizing sector strategies that can lead to placement in good jobs with career ladders.
• EVALUATION OF WORKFORCE OUTCOMES: Assess and determine what additional information is required to evaluate workforce outcomes for the Energy Training Centers. At a minimum, the Energy Training Centers should begin to collect information from participants on occupation, prior education, and work experience and demographic characteristics.
• CAREER DEVELOPMENT AND ENVIRONMENTAL INTEGRATION IN K-12 PROGRAMS: Increase the emphasis on career awareness and career exploration in ratepayer-funded education programs serving K-8 students and support career preparation programs in career academies and Regional Occupational Programs. Evaluate and work toward the integration of environmental and ratepayer-funded energy curricula. There is substantial evidence that the integration of environmental and energy curricula will increase the support of teachers for these programs. These efforts should be supported by strong collaborations with K-12 schools, particularly those programs, like the California Partnership Academies, that target disadvantaged students.
• EVALUATION OF K-12 EDUCATION PROGRAMS: Work with education agencies, schools, and funding partners to allow for the collection and reporting of demographic information on students participating in
ratepayer-funded Connections education programs. The present lack of information hampers the evaluation of existing programs.

RECOMMENDATIONS FOR FURTHER RESEARCH AND CAPACITY BUILDING

• WORKFORCE OUTCOMES OF ENERGY EFFICIENCY PROGRAMS: Expand funding for research on the implications of energy efficiency and related investments on jobs, job quality, and job access, and on employment and career outcomes for training program graduates. Comparative research that captures the impact of different labor conditions on energy efficiency outcomes should be prioritized. Basic job and workforce information is needed for the state’s major clean energy and efficiency investments, including wages, turnover, retention and workforce characteristics.
• SECTOR STRATEGIES RESEARCH AND TECHNICAL ASSISTANCE: Provide funding to support research on, and technical assistance and capacity building for, existing and emerging sector strategies in the energy efficiency sectors. These funds should be used to disseminate best practices of CALCTP and other successful sector initiatives to new initiatives, and to provide technical assistance to these initiatives.
• FUTURE WE&T NEEDS ASSESSMENTS: Future studies in targeted sectors are needed to assess the specific skill requirements and effectiveness of training programs. These needs assessments, including the one programmed for HVAC, should not be limited to skill gaps analyses but should include analyses of key labor conditions such as wages, career ladders, turnover and retention rates, and employer investments in training and retention. Needs assessments should include an employer survey of the various segments of the targeted sector in order to gather this information. This approach is critical to assess the higher quality segments of the industry, determine skill standards and certifications when necessary, and ensure that training investments help support the higher quality segments of each market.
• NATIONAL CENTER FOR THE CLEAN ENERGY WORKFORCE: Support the California Energy Commission’s proposal to create a National Center for the Clean Energy Workforce. The mandate of the proposed center is to help California grow a clean energy economy by promoting high-road economic and workforce development. The proposed center would work toward these ends by supporting research, providing technical assistance, and serving as an information clearinghouse and communications hub. In these ways, the center would help the state achieve energy savings while improving the lives of California workers.