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Ohio's Green Energy Economy:The Energy Efficiency Industry
by Siena Kaplan and Kari Wohlschlegel, Frontier Group; Jeff McCourt, Environment Ohio Research & Policy Center
Energy efficiency is the cheapest, fastest way to reduce Ohio’s use of coal and natural gas – cleaning up Ohio’s air, reducing global warming emissions, and saving consumers and businesses money. The work of increasing energy efficiency also brings new business to a wide array of Ohio companies, from manufacturers to architects, meaning that an investment in efficiency is at the same time an investment in the state’s economy.
Ohio has at least 1,135 businesses that work to make the state’s buildings and industry more efficient – from selling energy efficient windows to analyzing buildings’ energy use – comprising the state’s “energy efficiency industry.” Committing to increase Ohio’s energy efficiency will increase demand for these businesses’ services, allowing them to thrive, expand and add jobs, and opening up opportunities for Ohioans to start new businesses.
By increasing the energy efficiency of its buildings and industry, Ohio can reduce its global warming emissions and clean up its air, while saving money for home and business owners.
- Ohio’s homes, businesses and factories could be far more energy efficient than they are today. For example, a study by the Midwest Energy Efficiency Alliance (MEEA) found that Ohio has the potential to reduce residential electricity use by 23.3 percent and residential natural gas use by 47.7 percent from projected levels.
- If realized today, these reductions in electricity and natural gas would cut Ohio’s total global warming emissions by 21.5 million metric tons, or the equivalent of 8 percent of Ohio’s emissions today.
- Reducing Ohio’s residential electricity use by 23.3 percent would reduce sulfur dioxide emissions – one of the main components of soot – and nitrogen dioxide emissions – one of the main components of smog – each by about 10 percent.
- Far from costing extra, reducing Ohio’s use of coal and natural gas through energy efficiency will save money. MEEA found that over half of the potential for residential energy efficiency they identified would cost less than electricity costs today in Ohio. And an analysis by the American Council for an Energy-Efficient Economy found that national energy efficiency programs could save Ohio consumers $744 per household by 2030.
There are at least 1,135 businesses in Ohio involved in the work of increasing the state’s energy efficiency.
- At least 52 businesses in Ohio perform energy audits, an important first step in improving the energy efficiency of a home or building.
- Energy auditors find places where energy can be saved in buildings by looking at a building as an integrated system, and by using an array of tests to find air leaks.
- Demand for energy auditors has been growing. Affordable Energy LCC, an energy auditing company with 40 employees that serves Akron, Canton, and the rest of northeastern Ohio, sees a large potential for growth, especially if more potential customers are made aware of energy auditing services through public education campaigns.
- At least 78 Ohio businesses and community organizations weatherize buildings, which reduces natural gas heating bills by an average of 32 percent by sealing air leaks and improving insulation.
- Since the American Recovery and Reinvestment Act of 2009 increased funding for low-income weatherization services by five-fold and added a tax credit available to any homeowner for weatherization, Ohio weatherization services have expanded to meet the growing demand.
- Weatherization funds have directly led to new jobs. The Kno-Ho-Co-Ashland Community Action Commission, which provides weatherization services to Knox, Holmes, Coshocton and Ashland counties, had a four-year waiting list until the additional funding allowed them to double their staff and buy new equipment.
- At least 109 businesses in the state manufacture energy efficient products, such as insulation, high quality doors and windows, and Energy Star appliances.
- Energy Star products, such as dishwashers, televisions and furnaces, can save up to 75 percent of the electricity used to run these products compared with standard models. Improving insulation can result in savings of up to 30 percent off a building’s energy bills.
- Programs that encourage consumers to upgrade their buildings’ efficiency create a surge of replacements and demand for new products, boosting manufacturing. Ohio is well poised to benefit from this surge, with a strong manufacturing base.
- Owens Corning, a leading international energy efficient building material manufacturer, has its headquarters in Toledo, as well as manufacturing plants in Columbus, Mount Vernon, Newark and Tallmadge.
- At least 680 stores in Ohio sell energy efficient products and appliances, including all outlets of large changes such as Radio Shack and Sears, as well as specialized stores such as those owned by the Air Tight Corporation.
- Programs such as the additional home weatherization funding and the new federal “cash-for-appliances” program can create a surge of demand for energy efficient products, bringing new business to stores that sell energy efficient products.
- The Pella Corporation, for example, has seven Window & Door showrooms in Ohio, serving the communities of Bedford Heights, Mentor, Westlake, Columbus, Canfield, Canton and Akron, and Pella Design Centers in 14 Lowe’s locations in Ohio. The success of these stores, and others like them, will benefit Ohio’s economy in general as more consumers buy new windows, doors, appliances, and other energy efficient products to upgrade their homes and businesses.
- At least 215 homebuilders and architecture firms in Ohio design and construct Energy Star-certified homes.
- Energy Star new homes typically use 20-30 percent less energy than a standard house, with an incremental cost of only about 2-3 percent of the total cost of the home, which can be rolled into a mortgage for immediate savings.
- Their expertise in energy efficient building has allowed some of these firms to ride out the housing crash unscathed. For Doty & Miller Architects in Cleveland, which specializes in green buildings, 2007 and 2008 were the firm’s best years in its 30¬-year history.
Increasing the demand for these businesses’ services by making Ohio’s buildings and industry more efficient will drive job creation and economic growth in the state.
- In 2006, Ohio’s energy efficiency industry employed over 500,000 people statewide and posted revenues of more than $50 billion.
- By 2030, the sector is projected to create up to 2 million jobs in Ohio with revenues exceeding $200 billion.
- Already, 125,000 workers in Ohio have the relevant skills for retrofitting buildings to improve efficiency. Other workers have the skills needed for manufacturing more efficient appliances that could be sold here and in other states.
- The success of Ohio’s energy efficiency industry has a ripple effect on the state’s wider economy. For example, the Economic Policy Institute estimates that each job in the manufacturing sector – which is responsible for half of all jobs in the energy efficiency industry – supports an additional 2.9 indirect jobs in other sectors, such as finance, transportation and supply chains.
Ohio has made some good progress on energy efficiency, but still has a long way to go. Enacting and enforcing strong efficiency policies, both on the state and national level, could enable Ohio to tap into more of its potential for energy efficiency.
- The United States should adopt a national global warming and energy policy that maximizes the country’s energy efficiency, including:
- A mandatory, economy-wide cap on global warming emissions. At minimum, total U.S. emissions should be capped at 35 percent below 2005 levels by 2020 and 80 percent below 2005 levels by 2050.
- A national energy efficiency resource standard, like the one Ohio adopted in 2008, to reduce electricity demand by 15 percent by 2020 and natural gas demand by 10 percent.
- National building energy codes that reduce energy consumption in new homes and commercial buildings by 50 percent by 2015 and by 75 percent by 2030.
- Ohio’s residential building energy codes are currently out of date. The state should adopt the 2009 International Energy Conservation Code – the most recent version of the building energy code recommended by the U.S. Department of Energy – to ensure that all new buildings use energy efficiently, rather than wasting energy and money. If Ohio adopts this standard, the Building Codes Assistance Project estimates that the state will save $98 million in energy costs by 2020, and $186 million by 2030.
- Ohio’s current building code was developed through a process biased toward homebuilders. Ohio should eliminate the Residential Construction Advisory Committee and allow Ohio’s official code-adoption agency to hear from all voices equally.
- The passage of Ohio’s energy efficiency resource standard in 2008 was a big step in the right direction for the state. Projected annual savings from the program by 2025 are equal to the output of four 1,000-megawatt coal fired power plants. Ohio must ensure that this standard is implemented and enforced so that the state can realize these savings.
- Ohio should set a goal for all new buildings to create as much energy as they use by 2030. These “zero net energy” buildings are already being built across the United States, and by 2030 could be as common in Ohio as double pane windows if the state sets itself on a path toward this goal.