Recovery through retrofits

The new clean economy offers hope for jobs.

Published May 19, 2021

New York State lost thousands of clean energy jobs in the spring of 2020. Most of those were in energy efficiency, such as residential contractors that weatherize homes. While the return to pre-pandemic job levels has been slow, the new clean economy offers hope. There is a tremendous amount of energy efficiency retrofit work that could be done in the next few years. In NYC alone, roughly 3,000 multifamily and office properties need to lower emissions by 2024 to meet their Local Law 97 limits.

And the state is taking action. Enter the Empire Building Challenge (EBC), a new New York State Energy Research and Development Authority (NYSERDA) public-private partnership that engages real estate in the challenge of decarbonizing big buildings. Through a competitive application process, NYSERDA selected an initial cohort of ten real estate partners that committed to making their office and multifamily spaces carbon neutral by 2035. The pathway to net zero is up to the partners, but the first major retrofit supported by the EBC must be completed before 2025. Over the next 15 years, these collaborations could help funnel billions of dollars into New York’s retrofit market.

The competition has two chief economic benefits: New York could become a global leader in scalable low-carbon retrofits for big buildings, and generate thousands of green jobs in the process. Future job prospects are cloudy for many, with two-thirds of unemployed Americans considering changing careers. Opportunities to get retrained and transition into green collar jobs are available now with more on the way. But how many jobs could these retrofits create and what skills will new recruits need?

Unlocking potential through partnerships

The EBC could reduce New York’s annual emissions by about 175,000 tonnes, and potentially create over 4,000 jobs. Selected owners have committed 131 buildings to the challenge. These are all large buildings subject to LL97 and several are over one million square feet. More than 13 million square feet of multifamily and 17 million square feet of commercial office space would effectively stop emitting carbon by 2035. Those cuts could more than quadruple if the building owners expand their carbon neutrality pledge to the rest of their properties.

Over the next few years, EBC partners will invest upwards of $250 million into participating buildings and NYSERDA will contribute up to $50 million toward completing initial upgrades. That means $300 million will soon flow into the energy efficiency retrofit market and could generate 2,600 jobs, primarily in the NYC regional economy where most of the buildings are located.

If further deep energy retrofits are pursued, this EBC Partner cohort alone could create another  2,400 jobs. Based on cost estimates from Urban Green’s 2019 market assessment, at least $475 million would be invested in these buildings. This investment would average almost $16/SF, a huge amount to be devoted to efficiency. Much of this investment will be in retrofit jobs such as HVAC contractors and energy consultants, as well as in related industries, such as equipment manufacturing.

Of course, these job estimates assume an otherwise normal economy rather than our post-pandemic recovery. Businesses have found ways to operate with fewer people, and we may not need as many in-person workers. Companies may hesitate to hire or have difficulty finding people with the right skills, so some of these jobs may not materialize. But there is hope. The Congressional Budget Office (CBO) believes that GDP will return to normal levels by midyear and employment could fully rebound by 2024, and some forecasts show the economy could grow even faster in 2021.

Building back with better jobs

Despite permanent job reductions due to the pandemic, there is still much good news for the American worker. The green jobs required by energy efficiency retrofits pay well and cannot be easily outsourced or automated. But they’ll require significant training and placement programs to get upskilled workers on the job.

We’ve analyzed the efficiency work proposed by the EBC partners to get a sense of the roles and skills needed. We identified 30 unique measures addressing energy and water efficiency along with renewable power and thermal and battery storage. All projects aim to reduce on-site fuel use and most included improvements to building envelopes, controls, plug load management and cooling, heating and hot water systems.

The two most common measures we identified were electrification of heat and hot water. That means we’ll need plenty of design engineers, electricians, HVAC equipment installers, plumbers and steamfitters. The engineers and consultants will need to size and specify heat pumps to ensure high performance and reliability. Installers will need to learn best practices for integrating these new technologies into building infrastructure. And an essential skill for contractors will be the ability to diagnose and debug digital controls on HVAC equipment.

Electricians and plumbers are already in high demand, so we’ll need to attract new workers. Electricians will need a variety of energy efficiency-related skills in advanced lighting controls, sizing and installing electrical service for heat pumps and equipment submetering. Plumbers will need to install various heat pumps technologies into existing hot water loops and upgrade thermal distribution throughout the building. They can also play a big role in improving older systems like removing antiquated gas lines or improving district steam systems, as over 80 percent of the EBC buildings use district steam for heat or hot water.

Weatherization and insulation upgrades were the third most common measure and are improvements that should be included in any electrification conversion. Air sealing and insulation could be done by the same contractor, who may work with energy consultants to achieve the right level of airtightness and insulation.

Getting ready for a green economy

The EBC Partnership is great news for New York; buildings will be improved and emissions reduced while getting thousands of New Yorkers back to work. But to be successful, we need the right-skilled workforce on deck. It’s also a huge opportunity to foster racial equity since men of color have suffered staggering job losses in this recession, and their unemployment rate is double that of white men in NYC.

Workers looking to transition into green construction can apply for an apprenticeship with local unions, and New York State and City have apprentice preparation programs and training that give students the knowledge to start that process. Apprenticeships for new recruits should be quickly expanded, since it takes years to hone their skills and become journeymen. Demand for energy efficiency in NYC and across the state is likely to be sustained for decades by new policies. LL97 could lead to improvements in almost 50,000 NYC buildings and expand the current energy retrofit market by 13 times.

Experienced contractors can take courses on new technologies and methods. Urban Green’s GPRO offers courses specifically designed for electricians, plumbers and mechanical installers to learn about energy efficiency and sustainable construction. No matter where you are in your career, it’s time to get ready for a wave of building energy retrofits.

Further Reading