By: Ryan Miller, Founder & Executive Director, NCBPA
NCBPA sheds light on how changes to data collection and analysis methods in state and national reporting impact the perceptions and reporting of our industry’s revenue, company and worker data.
If you’re reading this, I have a strong feeling that you may have missed the recent news that North Carolina’s energy efficiency industry more than doubled in size over night just a few weeks ago. That is, according to our partner organization North Carolina Sustainable Energy Association’s (NCSEA) annual 2018 Clean Energy Industry Census.
The truth is… well, it’s not that simple. In this article, I’ll try to explain what’s happening…
How the census data is created and used
Since 2008, NCSEA has closely monitored and reported on the growth of North Carolina’s clean energy industry by way of revenue, companies, workers and other economic and market indicators. For years, they have surveyed clean energy firms across the state to gather critical data needed to inform the industry, policy makers and others about growth in the sector.
That data is critically important and you’d be surprised at just how many places it ends up. You’ll see this data reported in news articles about the industry, presentations at conferences, grant applications for project funding and in advocacy messaging to policy makers. For NCBPA, we always drive our work back to how it impacts our member companies and professionals. When setting strategic priorities and making investment decisions, it’s helpful to know how many companies, workers or how much revenue we can, or need to, impact to make a real difference. Here’s an example from NCBPA of how we use the job data to talk about industry growth and impact.
When I formed NCBPA in 2014, we began using NCSEA’s census data in our own promotional materials, which we were happy to do especially since they showed how North Carolina’s energy efficiency sector was the largest of any clean energy sector by revenue, companies and jobs. On a year over year basis, energy efficiency was continually the largest sector, even with significant market growth (and way more advocacy attention to) in solar, wind and battery storage. By 2015, however, it had become clear to us that there was much more revenue, companies and jobs than NCSEA or anyone else was reporting.
A 222% $7.8 Billion change over night
Imagine our surprise when NCSEA’s 2018 census was released a few weeks ago and just about every number grew exponentially from the prior 2016 report. Need some examples? Here are a few:
- North Carolina’s clean energy industry grew from:
- Annual revenue increased from $6.4 Billion to
$14.2 Billion (222% increase).
- The number of firms increased from 997 to 1,717 (72% increase).
- The number of jobs increased from 34,294 to 43,238 (26% increase).
- North Carolina’s energy efficiency sector grew
- Annual revenue increased from $2.5 Billion to $6.3 Billion (252% increase).
- The number of firms increased from 670 to 1,310 (95% increase).
- The number of jobs increased from 16,107 to 23,891 (48% increase).
You may not have recognized these vast increases in the latest census advertisements or report because the percentage increases presented compared the new 2018 figures to those in 2008 and 2009, which look great for overall continued industry growth. However, it’s worth noting in BIG LETTERS that in the case of revenue, the majority of the increase – $7.8 Billion or 72% of the $10.8 Billion total increase – occurred as a result of the most recent census data true-up, not a slow growth of revenue over time.
Does that make sense? According to this report, over the past ten years North Carolina’s clean energy industry has increased its revenue by $10.8 Billion and 72% of it came from the methodology true-up. Here are the revenue numbers: revenue increased from $3.4 Billion in 2008 to $6.4 Billion in 2016 (88% increase) and $14.2 Billion in 2018 (222% increase from 2016).
What caused these changes in the census?
The short answer is data collection methodology and analysis. Most simply put, NCSEA rightfully updated their data collection and analysis methodologies to more properly account for the true number of clean energy and energy efficiency revenue, firms and jobs in the state. That also means that, unfortunately, the past reporting has been underestimated. This true-up was much-needed and well-timed as the state gets set to release its new Clean Energy Plan and advocacy organizations like NCBPA and NCSEA look to advance new initiatives using baseline data, which the census seeks to provide. We appreciate NCSEA’s commitment to reporting the data as accurately as they can.
Another reason relates to organizations like NCBPA and national groups coming out with their own reports with differing numbers. Since 2014, NCBPA has been actively advocating for NCSEA and other organizations in the state and at the national level to spend more time, research and resources in quantifying our industry’s size and potential. But, we didn’t just ask, we took action as well.
NCBPA’s own analysis, found in our 2017 Business Case for Energy Efficiency Report, identified much larger numbers than what had been previously reported by NCSEA’s census. They are, however, much less than the job numbers provided by recent national reports (more on that later).
No matter the reason, we appreciate NCSEA acknowledging our efforts in the Acknowledgements section of the latest census report (see page 6).
So… who’s right and who’s wrong?
The answer is easy. All of us! On both parts! This type of reporting is challenging and no organization will ever have exactly the right data. But, by working together and breaking down the industry silos that exist today amongst advocates at the state and national levels, we can do better and yield the benefits of more accurate data.
Perhaps some work underway by the North Carolina Department of Commerce related to the new Clean Energy Plan will help. They have spent a lot of time this year developing workforce data in support of Governor Cooper’s Executive Order #80. That will be released soon and should prove helpful.
In the past few years, new national organizations have begun putting out their own industry data on the size and scope of energy efficiency industries at the national and state level, mostly as it pertains to job growth. These reports have been splashed across social media, conferences and the offices of policy makers to garner attention of the size and impact of energy efficiency. We support that! And why not, the numbers they’re reporting are HUGE!
- E4TheFuture’s 2018 Energy Efficiency Jobs in America report has some pretty impressive job numbers for North Carolina’s energy efficiency sector (see page 138):
- 84,020 total jobs equal to 18% of all construction jobs and 41% of all energy sector jobs.
- 10% of NC residents working in energy efficiency are veterans.
- 42,223 jobs are with ENEGY STAR appliances or efficient lighting.
- 31,034 jobs are with HVAC firms.
- E2’s (Environmental Entrepreneurs) Clean Jobs North Carolina 2019 report boasts even higher energy efficiency job numbers for North Carolina (click here):
- 86,559 total jobs amount to more workers in energy efficiency than 39 states have in all clean energy sectors.
- 11.4% of NC residents working in energy efficiency are veterans.
How did we get here?
The short answer is that it comes back to the varying methodologies used in the reports. And yes, they are all different. NCSEA’s methodology is its own and obviously, the recent updates led to significant increases across the board for clean energy and particularly energy efficiency. E2’s report, for example, uses data collected and analyzed through the 2019 U.S. Energy and Employment Report (formerly offered through the U.S. Department of Energy) by the BW Research Partnership where E2 is a partner along with the Energy Futures Initiative and the National Association of State Energy Officials.
The national reports attribute a majority of all HVAC jobs as positions in energy efficiency. All of them? Yes, all of them. Similarly, if someone who identifies themselves as an electrical contractor or an appliance installer works on one or two ENERGY STAR dishwashers during a routine job, for example, they are also attributed as an energy efficiency professional in these reports.
And at the state level, NCSEA’s census had been relying on companies to self-identify as energy efficiency firms for years. If an insulation contractor or building controls firm answers a survey question of “is your company an energy efficiency firm?” they were likely to say no. NCSEA’s updated methodology, which we support, categorizes some of these companies that wouldn’t on their own identify as energy efficiency.
What’s right and what’s wrong? Well, my answer is that somewhere in between is right. That’s pretty much the reason that NCBPA credits roughly 50,000 energy efficiency workers in the state – that number falls in between NCSEA’s 23,891 and the national reports of 80,000-plus with the majority of HVAC positions (about 30,000) backed out.
If you’re looking for more information on the nitty gritty details (that are shareable, by the way) in how these reports work, I encourage you to reach out to the report authors. There are a lot of complicated metrics and assumptions behind these types of reports so it’s best to consult with the authors directly.
How we’ll do better
With all that said, I believe we will do better and know that we can do better. Closing the gap on these vast differences in numbers will help us all. I for one would like to avoid a meeting with a policy maker (or Governor!) looking to make a decision about our state’s energy efficiency industry and is asking me if we have 24,000 or 80,000 jobs. What would you say?
On behalf of NCBPA, we appreciate NCSEA’s recent census updates and the reports provided by E4TheFuture and E2, another one of our partners. A lot of work went into these and each time an organization works on these types of reports, the industry as a whole garners more clarity for the future.
NCBPA will continue to work with these organizations and others to refine the methodologies and push for greater support for #EnergyEfficiencyFirst in North Carolina! After all, we are the largest sector of the state’s clean energy economy!
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