Wind, gas and storage jobs are all increasing in the energy sector, but the fastest employment growth isn't coming from the supply side, according to the 2018 U.S. Energy and Employment Report. It's energy efficiency that's creating the most opportunities, the new analysis concludes in an examination of four energy-focused sectors of the U.S. economy.

The traditional energy and energy efficiency sectors, which employ about 6.5 million Americans, saw a 2% increase in jobs in 2017, or about 133,000 new positions, according to the report. A closer look at the numbers reveals they largely mirror utility sector trends, with growth focused on the advanced energy sector.

One exception is the solar sector. It lost 24,000 jobs — about 6% of the workforce — as the industry installed about 30% less in 2017 than it had the year before.

The "traditional energy sector" is made up of generation and fuels production, along with transmission, distribution and storage; the report also looks at the energy efficiency and motor vehicle sectors.

Growth in the traditional energy and efficiency sectors made up 7% of all jobs created in the United States last year. But while the overall national employment numbers are strong, former Energy Secretary Ernest Moniz, founder of the grid-edge think tank Energy Futures Initiative (EFI), believes states will remain the "focal points for solutions to many of the challenges in the energy transformation."

​The employment report was produced by EFI, working with the National Association of State Energy Officials (NASEO), after the Department of Energy opted not to continue publishing the analysis as it had done in the previous two years.

"We think states will play a very important role," Moniz said in May at an event for the report's rollout. In particular, he said state efforts will be vital "as more and more states can align economic development plans, energy policies and workforce development plans, in a way that I think is frankly much harder to do at a larger level."

Generation jobs

Power generation and fuels directly employed more than 1.9 million workers last year, the report concluded — a rise of 15,000 jobs over 2016. 

More than half of those employed by the sector last year, about 1.1 million, worked in traditional coal, oil or gas positions, the report found. The other, almost 800,000 workers, were employed in jobs related to low-carbon emission generation technologies, including renewables, nuclear and advanced/low-emission natural gas.

On the renewables side, it was a mixed bag.

The wind industry added about 107,000 workers last year — an increase of almost 6%. On the other hand, solar energy firms shed 24,000 jobs, which is a reduction of about 6%.

It was the first decline in solar jobs in several years, the report noted, and almost two-thirds of it came from two states: California and Massachusetts.

"The reasons for this decline are still unclear, but could include an increase in labor productivity, market saturation for residential solar, and/or concern over solar panel tariffs," the report speculated. "Meanwhile, extraction jobs in oil and natural gas have remained stable, even growing slightly, while output has increased, in a low-price environment."

Efficiency employment

Energy efficiency is "by far the largest segment" of the energy sector, when you look at it in revenue dollars and employment, Advanced Energy Economy spokesperson Monique Hanis told Utility Dive in an email.

According to the survey, the sector employed 2.25 million, in whole or in part, "in the design, installation, and manufacture" of energy efficiency products. Last year, the energy efficiency sector added 67,000 jobs.

The new figures highlight the impact that high-level policy decisions can have.

President Trump proposed last year to cut EPA's popular Energy Star program and have it operated by a non-governmental operator. Launched in the Bush I Administration, the program has spurred efficiency improvements for a wide range of appliances, and saved homes and businesses $34 billion, according to the Alliance to Save Energy.

Congress saved the program when lawmakers compromised on a spending bill earlier this year, but the tension stands as a reminder of how and where the energy economy creates jobs.

There were more than 300,000 Americans working to manufacture Energy Star products last year, an increase of 26,000 over 2016 numbers, according to David Foster, who directed the first two editions of the energy and jobs report and worked with EFI to create the third.

***Foster said that in general energy efficiency isn't wholly recognized for its impact on the economy. "It's driving some of the most effective manufacturing utilization and capacity in the country," he at the report kickoff event. And the jobs created reflect investments in grid modernization, which are taking place in states all around the country.***

The construction side of energy efficiency shrank by about 100,000 jobs last year, said Foster, but "the intensity of focus on energy efficiency increased among construction employers." More than 80% of construction employers now say a majority of their employees are spending a majority of their time working with energy efficiency technologies. Energy efficiency professional services added 63,000 jobs.

The report "affirms the fact that these clean energy sectors — energy efficiency, natural gas, and renewable energy — are the growth sectors of the American economy," Lisa Jacobson, president of the Business Council for Sustainable Energy, said in a statement.

Transmission tasks

The report estimated the Transmission, Distribution and Storage category employed more than 2.3 million workers, with slightly more than 1 million working in retail trade and almost 900,000 working across utilities and construction.

"Utilities and construction were the two strongest industry sectors" in the transmission category, the report found, adding over 36,000 new jobs in 2017. Excluding the retail trade sector, the report concluded energy infrastructure added a net 16,000 jobs, while battery storage added almost 6,000 new jobs for a 12% growth rate.

"This is an important sector for job growth," said Foster, discussing energy storage. The jobs reflect investments being made in grid modernization.

Car Careers

The Motor Vehicles segment employed almost 2.5 million people last year, excluding automobile dealerships, representing an increase of about 29,000 jobs. Despite predictions of a coming boom in electric vehicle adoption, that has yet to materialize in employment figures — though a closer examination may reveal key indicators.

Employment surrounding "alternative fuels vehicles," which includes natural gas, hybrids, plug-in hybrids, all-electric, and fuel cell/hydrogen vehicles, declined 40,000 last year. However, researchers showed hybrids, plug-in hybrids, and all-electric vehicles made up more than 90% of the employment figure, supporting 197,000 employees.

"The number of jobs supported by hybrid and plug-in hybrids declined, while jobs supported by all-electric
vehicles rose sharply," the report found.

So far, all-electric plug-in vehicles are a small fraction of vehicles in the United States, but there could be 7 million on the road by the end of 2025, according to a report last year from the Edison Electric Institute and the Institute for Electric Innovation.