How does the transition to zero-carbon buildings impact employment?
The NZNW Energy Pathways-Buildings analysis found that electrification of building appliances is the most economic pathway to achieve net-zero emissions by 2050 for the building sector. The federal government is also investing in building electrification through rebate programs in the Inflation Reduction Act (IRA).
The NZNW Energy Pathways modeling assumes rapid electrification of residential and commercial gas appliances, reaching 100% electric sales shares by 2035 in space heating, water heating, and cooking. The modeling also assumes that sales of both high-efficiency building technology and high-efficiency building shells will reach 100% by 2035.
The transition to zero-carbon buildings provides enormous opportunity for workforce development to ensure there are enough workers trained to meet the growing demand for electrification, energy efficiency activities, and retrofits in residential and commercial buildings.
Table 1. Buildings Subsector Descriptions and Example Jobs*
*For a list of resources consulted, see NZNW Workforce Analysis Resources
Employment Grows in all Buildings Subsectors, Increasing by 22% Between 2021 and 2030
As of 2021, the Buildings sector supported almost 146,000 jobs in the Northwest region, across direct (associated with the initial economic impact of a given investment or activity), indirect (associated with the supply chain connected to that initial economic activity), and induced (based on the additional household spending resulting from direct and indirect jobs) employment.
The Residential Heating, Ventilation, and Air Conditioning (HVAC) subsector supported 32% (over 46,500) of the sector’s jobs; the Residential Other subsector accounted for 23% (over 33,500); with another 10% (nearly 14,000) of Building sector jobs falling within Residential Shell. In commercial buildings, Commercial HVAC supported 20% (over 29,200) of the sector's jobs, with the Commercial Other subsector contributing the last 15% (roughly 22,200) of Building sector jobs.
Between 2021 and 2030, none of the Buildings subsectors see employment declines as energy efficiency and building electrification and decarbonization efforts ramp up. Investment into high-efficiency and low-carbon residential HVAC and other commercial and residential technologies outpaces cutbacks to higher carbon building technologies (such as gas furnaces), resulting in overall investment and employment growth among these building technologies.
Between 2021 and 2030, the Buildings sector supported employment increases of over 32,500 jobs (a 22% increase), driven largely by Commercial HVAC and followed by Residential Shell jobs. The Residential HVAC, Residential Other, and Commercial Other subsectors in the Northwest also see a rise in employment by almost 3,000 jobs each.
Figure 1 shows the 2021 baseline employment and job growth/loss through 2040. These trends continue through 2050 (not shown in Figure 1), with an overall increase in Buildings sector employment from 2021. Similar to the 2030 trends, the Commercial HVAC and Residential Shell subsectors grow the most in employment between 2021 and 2050, even after experiencing a slight decline stemming from a small investment decrease in commercial space heating and residential building shell technologies after 2035.
Figure 2 provides additional detail on annual investment (derived from the NZNW Energy Pathways-Buildings modeling) in the Buildings subsector activities, driving overall employment growth.
The Construction Industry Contributes the Most to Growth in Buildings Sector Employment
As in other sectors, the construction industry sees the most growth in employment in Buildings, adding over 18,000 jobs by 2030, as investments spur an increase in electrification and energy efficiency activities in new building construction and building retrofits.
Installation/Repair Occupations in the Buildings Sector Grow by 33% Between 2021 and 2030
In addition to looking at job growth by industry category (Figure 3), this analysis also explored job growth by occupation (Figure 4), which includes direct and indirect jobs, but not induced jobs.
Building renovations—electrification, energy efficiency activities, and retrofits—lead to a projected 33% growth among Buildings sector installation/repair occupations in the Northwest between 2021 and 2030, pointing to the importance of focusing workforce development efforts on these occupations.
61% of Buildings Sector Jobs Earn Over $30 an Hour in Both 2021 and 2030
Nearly half of Buildings sector jobs (43% in 2021 and 44% in 2030) in the Northwest fall in the $30 an hour to $44 an hour wage range, with an additional 17%-18% earning over $44 an hour, for a total of 61% of jobs earning over $30 an hour. Compared to the other energy sectors in this analysis, the Buildings sector has the lowest percentage (38% in both 2021 and 2030) earning less than $30 an hour, although this still represents a significant number of workers (roughly 40,800 in 2021 and 49,800 in 2030).
BW Research based these wage tiers on the MIT Living Wage Calculator at median living wages for different living circumstances in each of the four Northwest states, weighted by employment in each state. The modeling team relied on this national source to maintain consistency across the four Northwest states, rather than introduce state-specific sources.
Electrification of the Buildings sector represents a significant opportunity and challenge for workforce development. Commercial building contractors employ significantly more workers per firm than residential building firms. Residential building work will require smaller, retail-based electricians, HVAC technicians, and other specialty trade contractors that have specific knowledge of energy-efficient technologies deployed in buildings and homes.
Workforce development efforts should be aimed at installation or repair occupations in the subsector activities that experience the most growth—space heating (Residential and Commercial HVAC), refrigeration and ventilation (Commercial Other), air conditioning (Residential HVAC), and Residential Shell installations.