Sustainable economic development requires the efficient production and use of energy. Combined heat and power (CHP) offers a promising technological approach to achieving both goals. While a recent U.S. executive order set a national...
moreSustainable economic development requires the efficient production and use of energy. Combined heat and
power (CHP) offers a promising technological approach to achieving both goals. While a recent U.S. executive
order set a national goal of 40 GWof new industrial CHP by 2020, the deployment of CHP is challenged by financial,
regulatory, and workforce barriers. Discrepancies between private and public interests can be minimized by
policies promoting energy-based economic development. In this context, a great deal of rhetoric has addressed
the ambiguous goal of growing “green jobs.” Our research provides a systematic evaluation of the job impacts
of an investment tax credit that would subsidize industrial CHP deployment. We introduce a hybrid analysis approach
combining simulations using the National Energy Modeling System with Input–output modeling. NEMS
simulates general-equilibrium effects including supply- and demand-side resources.We identify first-order employment
impacts by creating “bill of goods” expenditures for the installation and operation of industrialCHP systems.
Second-order impacts are then estimated based on the redirection of energy-bill savings accruing to
consumers; these include jobs across the economy created by the lower electricity prices that would result
from increased reliance on energy-efficient CHP systems. On a jobs-per-GWh basis, we find that the secondorder
impacts are approximately twice as large as the first-order impacts.
