Photographer: Leon Neal/Getty Images
4.26.23 – Bloomberg Law
NEMA, other trade groups and construction firms have voiced concerns that the Biden administration’s ambitious plan to boost home energy efficiency will be slowed by a nationwide shortage of qualified personnel to perform the necessary tasks. NEMA is “certainly concerned about the availability of a skilled workforce to help make that energy efficiency a reality,”
said Spencer Pederson, senior vice president of public affairs.
- Mismatch between homeowners’ demand and available workforce
- $8.8 billion in rebates available later this year
The White House’s plan to reduce energy waste from American homes is about to run into a stumbling block: a lack of skilled tradespeople who can actually do the work, industry veterans say.
Making the labor crunch even worse, the demand for energy efficiency services is set to skyrocket as homeowners start claiming their share of the $8.8 billion in rebates the climate bill provides for home upgrades. Those rebates will become available within the next few months, according to a Department of Energy spokeswoman.
The mismatch between supply and demand raises the threat that President Joe Biden’s grand vision of reducing energy usage for heating, cooling, and lighting homes and commercial buildings—responsible for 13% of the nation’s carbon emissions, according to the EPA—won’t be realized for at least a few years, as new training programs are designed and put into play.
“The size and capabilities of our workforce may be the single biggest obstacle to the infrastructure and climate bills,” said Nora Wang Esram, senior director for research at the American Council for an Energy-Efficient Economy.
Hard data documenting the size of the skills gap is elusive because the Bureau of Labor Statistics doesn’t track job statistics specifically for energy efficiency. But isolated data points suggest hiring difficulties.
For example, DOE recently reported that energy efficiency jobs grew in 2021, but only by 2.7%. The Energy Futures Initiative found in 2020 that 91% of employers in the energy efficiency sector said it was difficult to hire new employees, and 45% said it was “very difficult.”
Similarly, the New York State Energy Research and Development Authority recently reported that the number of commercial HVAC workers will have to more than double by 2030 to meet the emissions requirements of the state’s ambitious climate goal of cutting greenhouse gas emissions by 40% by that year.
“It’s hard to find someone who can see that this is a career,” said Patch Garcia, director of people operations at Eco Performance Builders, a contracting firm in Walnut Creek, Calif. “There’s more people who want this done than people who are available to do it.”
Spencer Pederson, senior vice president of public affairs at the National Electrical Manufacturers Association, said his group is “certainly concerned about the availability of a skilled workforce to help make that energy efficiency a reality.”
Separately, companies like Dandelion Energy, a residential geothermal retrofitter in Mount Kisco, N.Y., say they’re being hamstrung by strict licensing requirements that vary wildly not only from state to state but often from county to county.
In Massachusetts, some of Dandelion’s customers have been waiting for up to a year to have heat pumps installed, in large part because the company is having trouble finding workers with the right licenses, according to Michael Sachse, Dandelion’s CEO.
Training Grants
To help bring more workers into the sector, Congress delivered some $250 million in grants to train a clean energy workforce under the infrastructure and climate bills. The money will be sent to states, unions, and schools so they can train contractors, building technicians, and engineers.
Coming guidance from the Energy Department will lay out how states can use the money to reduce the cost of training workers, provide testing and certification, and team up with nonprofit organizations to develop and implement state programs, according to the agency spokeswoman.
The $250 million will help, but “it’s a drop in the bucket,” said Kara Saul Rinaldi, chief policy officer at the Building Performance Association.
Other buckets of money could be tapped, such as a $1 billion line item in the climate bill for states and local governments to develop stricter building energy codes. But that money isn’t specifically earmarked for worker training, so states and cities would have to actively carve out training programs while still meeting Congress’ intent, said Esram.
To make the $250 million go further, Esram urged states to spend the money on actually delivering training, not developing learning modules, because they already exist. The DOE spokeswoman said the agency is working on model workforce development plans that states can use.
Saul Rinaldi agreed $250 million for training isn’t enough. But she also said not every member of every work crew has to be trained in every discipline, so companies are likely to be judicious about making the available money go further.
The Department of Energy is encouraging states to create plans to meet workforce training needs after the funding is spent, its spokeswoman said.
Staffing Shortfall
Even before the Biden rebates become available, contractors say they’re struggling to hire auditors, electricians, and technicians who can diagnose a home’s efficiency and install heat pumps, advanced insulation, and other technologies that reduce energy use.
Scott Donelson, president of Arlington, Va.-based contracting firm Home Energy Medics, said he’s only been able to hire one person with experience in home energy efficiency in his 14 years. Every other person brought into the company has had to be trained after being hired, Donelson said. At the same time, demand for the company’s services is “very strong,” he said, adding that he has a backlog of 30 jobs lined up.
The skills gap is worst in places like the Midwest, Deep South, and rural Appalachia, according to Xavier Walter, director of outreach at the Building Performance Association. Wealthier regions like the Northeast and California are doing better, Walter said, adding that the Energy Department should therefore make sure “not all the training money goes to them.”
Walter’s group recently completed a study in West Virginia finding that most contractors say they’re trying to staff up, and that potential workers generally don’t know that energy-efficiency jobs are available.
Historically overlooked groups, such as asylum seekers and formerly incarcerated people, could be sources for new hiring, Walter said.
Too Much Licensure?
Republican lawmakers have long argued that too many jobs require professional licensing and that workers should be able to take on certain types of jobs without having to go through a rigorous training and certification process. That approach would free up many general contractors to perform home efficiency upgrades.
Sachse broadly agreed that licensure can get out of hand. In Connecticut, for example, heat pump installers must have licenses that require them to have had experience with fossil fuel-powered systems, which many Dandelion employees have never dealt with apart from removing them. In Massachusetts, installers need a sheet metal license to work on ducts, even though most of Dandelion’s installers are only connecting old ductwork to new ductwork and making a small connection.
Some of the company’s employees have to take tests on, for example, the legal requirements on setback distances in order to get licensed, Sachse said.
“You need one person in a company who can do that,” he said. “It’s not necessarily the person who’s operating the equipment.”
Dandelion has been in discussions with both the Connecticut legislature and state agencies to change some of the licensing rules, Sachse said.
But he conceded that many projects do require advanced skills and that licenses are important where public safety is at stake.
“The insulation system, the size of the ducts, determine how you size an HVAC unit,” Saul Rinaldi said. “And if you’re installing a heat pump, are you taking out a gas furnace? In that case, there’s a massive health and safety issue and an electric load issue. If we don’t have people who are trained, we are not going to have the results from the Inflation Reduction Act that we’ve all paid for.”
To contact the reporter on this story: Stephen Lee in Washington at stephenlee@bloombergindustry.com
To contact the editors responsible for this story: Renee Schoof at rschoof@bloombergindustry.com; JoVona Taylor at jtaylor@bloombergindustry.com