CHAPTER 14. EMPLOYMENT IMPACT ANALYSIS
 

TABLE OF CONTENTS
 

14.1 INTRODUCTION ......................................................................................................... 14-1
 

14.2 ASSUMPTIONS............................................................................................................ 14-1
 

14.3 METHODOLOGY ........................................................................................................ 14-1
 

14.4 RESULTS ...................................................................................................................... 14-2
 

LIST OF TABLES 

Table 14.4.1 Residential Water Heater Net National Change in Employment..................... 14-10
 

Table 14.4.2 Direct Heating Equipment Net National Change in Employment................... 14-10
 

Table 14.4.3 Pool Heater Net National Change in Employment.......................................... 14-11
 

LIST OF FIGURES 

Figure 14.4.1 Residential Water Heater Employment Impact of Increased Equipment 

Cost .................................................................................................................... 14-3
 

Figure 14.4.2 Direct Heating Equipment Employment Impact of Increased Equipment
 

Cost .................................................................................................................... 14-3
 

Figure 14.4.3 Pool Heater Employment Impact of Increased Equipment Cost ....................... 14-4
 

Figure 14.4.4 Residential Water Heater Employment Impact of Energy Savings................... 14-5
 

Figure 14.4.5 Direct Heating Equipment Employment Impact of Energy Savings................. 14-5
 

Figure 14.4.6 Pool Heater Employment Impact of Energy Savings ........................................ 14-6
 

Figure 14.4.7 Residential Water Heater Employment Impact of Operations and
 

Maintenance Cost Increase ................................................................................ 14-7
 

Figure 14.4.8 Direct Heating Equipment Employment Impact of Operations and
 

Maintenance Cost Increase ................................................................................ 14-7
 

Figure 14.4.9 Pool Heater Employment Impact of Operations and Maintenance Cost
 

Increase .............................................................................................................. 14-8
 

Figure 14.4.10 Residential Water Heater Net National Change in Employment....................... 14-9
 

Figure 14.4.11 Direct Heating Equipment Net National Change in Employment..................... 14-9
 

Figure 14.4.12 Pool Heater Net National Change in Employment.......................................... 14-10
 

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CHAPTER 14. EMPLOYMENT IMPACT ANALYSIS
 

14.1 INTRODUCTION
 

DOE conducted an employment impact analysis for the NOPR. DOE’s employment 

impact analysis is designed to estimate indirect national job creation or elimination resulting 

from possible standards, due to reallocation of the associated expenditures for purchasing and 

operating residential heating products. 

14.2 ASSUMPTIONS 

DOE expects heating product standards to decrease energy consumption, and therefore to 

reduce energy expenditures. The savings in energy expenditures may be spent on new 

investment or not at all (i.e., they may remain “saved”). The standards may increase the 

purchase price of heating products, including the retail price plus sales tax, and increase 

installation costs. 

Using an input/output econometric model of the U.S. economy, this analysis estimated 

the year-to-year effect of these expenditure impacts on net economic output and employment. 

DOE intends this analysis to quantify the indirect employment impacts of these expenditure 

changes. It evaluated direct employment impacts at manufacturers’ facilities in the manufacturer 

impact analysis (see Chapter 12). 

14.3 METHODOLOGY 

The Department based its analysis on an input/output model of the U.S. economy that 

estimates the effects of standards on major sectors of the economy related to buildings and the 

net impact of standards on jobs. The Pacific Northwest National Laboratory developed the 

model, ImSET1 (Impact of Sector Energy Technologies) as a successor to ImBuild2

, a specialpurpose version of the IMPLAN3 national input/output model. ImSET estimates the employment 

and income effects of building energy technologies. In comparison with simple economic 

multiplier approaches, ImSET allows for more complete and automated analysis of the economic 

impacts of energy-efficiency investments in buildings. 

In an input/output model, the level of employment in an economy is determined by the 

relationship of different sectors of the economy and the spending flows among them. Different 

sectors have different levels of labor intensity and so changes in the level of spending (e.g., due 

to the effects of an efficiency standard) in one sector of the economy will affect flows in other 

sectors, which affects the overall level of employment. 

ImSET uses a 188-sector model of the national economy to predict the economic effects 

of residential and commercial buildings technologies. ImSET collects estimates of initial 

investments, energy savings, and economic activity associated with spending the savings 

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resulting from standards (e.g., changes in final demand in personal consumption, business 

investment and spending, and government spending). It provides overall estimates of the change 

in national output for each input-output sector. The model applies estimates of employment and 

wage income per dollar of economic output for each sector and calculates impacts on national 

employment and wage income. 

Energy-efficiency technology primarily affects the U.S. economy along three spending 

pathways. First, general investment funds are diverted to sectors that manufacture, install, and 

maintain energy-efficient appliances. The increased cost of appliances leads to higher 

employment in the appliance manufacturing sectors and lower employment in other economic 

sectors. Second, commercial firm and residential spending are redirected from utilities toward 

firms that supply production inputs. Third, electric utility sector investment funds are released 

for use in other sectors of the economy. When consumers use less energy, electric utilities 

experience relative reductions in demand which leads to reductions in utility sector investment 

and employment. 

14.4 RESULTS 

The results in this section refer to impacts of heating products standards relative to the 

base case for each appliance. DOE disaggregated the impact of heating product standards on 

employment into three component effects: increased capital investment costs, decreased energy 

and water costs, and changes in operations and maintenance costs. These component effects and 

a summary impact are presented for residential water heaters, direct heating equipment, and pool 

heaters. 

Figures 14.4.1-14.4.3 summarize the employment impacts of the increased investment 

and spending on higher-efficiency equipment. Because appliance manufacturing is relatively 

capital-intensive compared to other sectors of the economy, the net result is a small loss of 

employment. 

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-14 

-12 

-10 

-8 

-6 

-4 

-2 

0 

2015 2020 2025 2030 2035 2040 

Year 

Incremental Jobs (1000)

TSL 1 

TSL 2 

TSL 3 

TSL 4 

TSL 5 

TSL 6 

TSL 7 

Figure 14.4.1 Residential Water Heater Employment Impact of Increased 

Equipment Cost 

-0.09 

-0.08 

-0.07 

-0.06 

-0.05 

-0.04 

-0.03 

-0.02 

-0.01 

0 

2013 2018 2023 2028 2033 2038 

Year 

Incremental Jobs (1000)

TSL 1 

TSL 2 

TSL 3 

TSL 4 

TSL 5 

TSL 6 

Figure 14.4.2	 Direct Heating Equipment Employment Impact of 

Increased Equipment Cost 

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-0.6 

-0.5 

-0.4 

-0.3 

-0.2 

-0.1 

0 

2013 2018 2023 2028 2033 2038 

Year 

Incremental Jobs (1000)

TSL 1 

TSL 2 

TSL 3 

TSL 4 

TSL 5 

Figure 14.4.3	 Pool Heater Employment Impact of Increased Equipment 

Cost 

Figures 14.4.4-14.4.6 show the employment impact of redirected spending made possible 

by appliance energy savings. In this case, the employment impact is strongly positive. 

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0 

10 

20 

30 

40 

50 

60 

70 

80 

90 

2015 2020 2025 2030 2035 2040 

Year 

Incremental Jobs (1000) 

TSL 1 

TSL 2 

TSL 3 

TSL 4 

TSL 5 

TSL 6 

TSL 7 

Figure 14.4.4 Residential Water Heater Employment Impact of Energy 

Savings 

0 

0.05 

0.1 

0.15 

0.2 

0.25 

2013 2018 2023 2028 2033 2038 

Year 

Incremental Jobs (1000) 

TSL 1 

TSL 2 

TSL 3 

TSL 4 

TSL 5 

TSL 6 

Figure 14.4.5	 Direct Heating Equipment Employment Impact of Energy 

Savings 

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0 

0.1 

0.2 

0.3 

0.4 

0.5 

2013 2018 2023 2028 2033 2038 

Year 

Incremental Jobs (1000) 

TSL 1 

TSL 2 

TSL 3 

TSL 4 

TSL 5 

Figure 14.4.6 Pool Heater Employment Impact of Energy Savings 

Figures 14.4.7 – 14.4.9 show the employment impacts of non-energy operations and 

maintenance cost increases for residential water heaters, direct heating equipment, and pool 

heaters. Repair and maintenance is comparatively labor-intensive, so the net result is a small 

increase in employment. For pool heater TSL 1 no changes in repair and maintenance costs are 

anticipated, and for direct heating equipment TSLs 1-3, changes in maintenance costs are so 

minor that no resulting change in employment is predicted. 

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0 

0.1 

0.2 

0.3 

0.4 

0.5 

0.6 

0.7 

0.8 

0.9 

2015 2020 2025 2030 2035 2040 

Year 

Incremental Jobs (1000) 

TSL 1 

TSL 2,3,4 

TSL 5 

TSL 6 

TSL 7 

Figure 14.4.7 Residential Water Heater Employment Impact of 

Operations and Maintenance Cost Increase 

0 

0.001 

0.002 

0.003 

0.004 

0.005 

0.006 

0.007 

0.008 

2013 2018 2023 2028 2033 2038 

Year 

Incremental Jobs (1000) 

TSL 4 

TSL 5 

TSL 6 

Figure 14.4.8	 Direct Heating Equipment Employment Impact of 

Operations and Maintenance Cost Increase 

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0 

0.01 

0.02 

0.03 

0.04 

0.05 

0.06 

0.07 

0.08 

2013 2018 2023 2028 2033 2038 

Year 

Incremental Jobs (1000)

TSL 2, 3 

TSL 4, 5 

Figure 14.4.9	 Pool Heater Employment Impact of Operations and 

Maintenance Cost Increase 

Figures 14.4.10-14.4.12 show the estimated net national employment impacts of the 

residential water heater, direct heating equipment, and pool heater trial standard levels. For any 

given year, these figures show the net change in the number of jobs in the economy relative to if 

there were no change in standards (and thus no resulting change in spending and cash flow 

patterns throughout the economy). Tables 14.4.1-14.4.3 show the net national employment 

impact in specific years. 

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-20 

-10 

0 

10 

20 

30 

40 

50 

60 

70 

80 

2015 2020 2025 2030 2035 2040 

Year 

Incremental Jobs (1000) 

TSL 1 

TSL 2 

TSL 3 

TSL 4 

TSL 5 

TSL 6 

TSL 7 

Figure 14.4.10 Residential Water Heater Net National Change in 

Employment 

0.4 

0.2 

0
 

2013 2018 2023
 2028 2033 2038
 

Incremental Jobs (1000) -0.2 

-0.4 

-0.6 

-0.8 

-1 

-1.2 

-1.4 

TSL 1
 

TSL 2
 

TSL 3
 

TSL 4
 

TSL 5
 

TSL 6
 

Year 

Figure 14.4.11	 Direct Heating Equipment Net National Change in 

Employment 

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 Incremental Jobs (1000) 

0.1 

0 

2013 2018 2023 2028 2033 2038 

-0.1 

-0.2 

-0.3 

-0.5 

-0.4 TSL 1 

TSL 2 

TSL 3 

TSL 4 

TSL 5 

TSL 6 

-0.6 

Figure 14.4.12 Pool Heater Net National Change in Employment 

Table 14.4.1 Residential Water Heater Net National Change in Employment 

Year 

Trial Standard 

Level 

2015 

(thousands) 

2020 

(thousands) 

2030 

(thousands) 

2044 

(thousands) 

1 -0.17 1.02 2.58 3.32 

2 -0.46 1.20 3.36 4.38 

3 -0.55 1.97 5.27 6.70 

4 -0.62 2.58 6.75 8.49 

5 -0.77 5.63 13.95 17.82 

6 -2.47 18.48 45.72 55.67 

7 -6.98 19.37 54.03 68.11 

Table 14.4.2 Direct Heating Equipment Net National Change in Employment
 

Trial Standard 

Level 

2013 

(thousands) 

2020 

(thousands) 

2030 

(thousands) 

2042 

(thousands) 

1 -0.03 0.06 0.14 0.16 

2 -0.03 0.07 0.16 0.18 

3 -0.04 0.08 0.20 0.23 

4 -0.43 -0.20 0.05 0.08 

5 -0.47 -0.22 0.04 0.09 

6 -1.34 -0.60 0.16 0.24 

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Table 14.4.3 Pool Heater Net National Change in Employment
 

Trial Standard 

Level 

2013 

(thousands) 

2020 

(thousands) 

2030 

(thousands) 

2042 

(thousands) 

1 0.00 0.01 0.02 0.02 

2 -0.01 0.02 0.02 0.03 

3 -0.04 0.03 0.05 0.06 

4 -0.07 0.02 0.04 0.06 

5 -0.21 -0.04 0.01 0.04 

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REFERENCES
 

1.	 Roop, J. M., M. J. Scott, and R. W. Schultz, ImSET: Impact of Sector Energy 

Technologies, 2005. Pacific Northwest National Laboratory. Richland, WA. Report No. 

PNNL- 15273. 

2.	 Scott, M. J., D. J. Hostick, and D. B. Belzer, ImBuild: Impact of Building Energy 

Efficiency Programs, April, 1998. Pacific Northwest National Laboratory. Richland, WA. 

Report No. PNNL-11884. Prepared for the U.S. Department of Energy under Contract 

DE-AC06-76RLO 1830. 

3.	 Minnesota IMPLAN Group Inc., IMPLAN Professional: User's Guide, Analysis Guide, 

Data Guide, 1997. Stillwater, MN. 

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