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Defining Green Industry and Trend Analysis

A Battelle – C2ER PowerPoint Presentation to the Arizona Green Economy Advisory Committee

May 26, 2010

Arizona State Labor Market Information Improvement for Green Jobs

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Credits and Disclaimer

This PowerPoint Presentation was funded by a grant awarded by the U.S. Department of Labor’s Employment and Training Administration. The PowerPoint was created by Battelle Technology Partnership in collaboration with the Council for Community and Economic Research and assistance from Arizona’s Office of Employment and Population Statistics and does not necessarily reflect the official position of the U.S. Department of Labor. The Department of Labor makes no guarantees, warranties, or assurances of any kind, express or implied, with respect to such information, including any information on linked sites and including, but not limited to, accuracy of the information, or its completeness, timeliness, usefulness, adequacy, continued availability, or ownership. This PowerPoint Presentation is copyrighted by the Arizona Department of Economic Security. Internal use by an organization and/or personal use by an individual for non-commercial purposes are permissible. All other uses require the prior authorization of the copyright owner.

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I. Project Overview: State Green Jobs LMI Improvement Grant Key Deliverables

• Policy paper defining green jobs for Arizona and describing key trends

• In-depth analysis of key green industries• Job vacancy skills analysis• Industry and occupational opportunities profile• More user-oriented workforce information website

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Today’s Discussion on Defining Green Industry and Trend Analysis

• Follow Up Discussion On: – Definition of Green Economy – including results from

Advisory Committee survey and recent U.S. BLS federal register notice

– Summary of Input from Focus Group Meetings – Guidance on Measuring Green Economy Innovation &

Deployment for Arizona

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Stakeholder Survey Results on Defining the Green Economy

• At project kick-off in February, the C2ER team reviewed the existing literature on defining the green economy and facilitated a spirited discussion on how best to apply a definition of green activities for Arizona.

• A follow up survey was sent to Advisory Committee members and other key stakeholders to provide us their views on how best to define the green economy.

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A Mixed Picture on How to Define Green Economy, but Not Green Workers• On key question of whether to include only firms that

produce green products or services or also include those that deploy green products — the Advisory Committee was split — 16 only producers and 17 producers + deployers– Key firms to include who deploy are those that distribute or sell green

products or services (16 of 17 in favor)– Less consensus on those that use or consume green products or

services – 9 in favor, 6 opposed– Also not clear those that facilitate greater deployment of green

products or services – 10 of 17 in favor; 6 opposed.• In defining green workers, more consensus that it is “very

important” that there be a specific set of skills and certifications to qualify a worker as employed in a green occupation– 23 out of 32 respondents answered as very important or important

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On Detailed Green Activities, Only Renewable Energy and Energy Efficiency Recorded Strong Consensus as being Green • Renewable Energy Activities

were rated by all respondents as either a primary or largely green activity:– Highest ratings as Green Activities

went to: - Wind, Solar PV, Solar Thermal,

Geothermal, Ocean/Wave Power– Overwhelming Majority as Largely

Green went to: - Hydropower, Waste-to-Energy,

Hydrogen Power, Grid Systems/Smart Metering

• Energy Efficient Activities also viewed as largely green activity

- Advanced Lighting, Energy Efficient Appliances, Building Materials, Energy Auditing, Energy Storage, Hybrid Engines

• Environmental Activities received more mixed views– Recycled products viewed by

majority as primary/largely green– Pure play environmental viewed by

narrow majority as green• Activities not viewed as green:

– Nuclear and clean coal– Support services, such as venture

financing and A&E firms

See Handout for More Details

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U.S. BLS Weighs in with its own definition for public comment• On March 16th, the U.S.

BLS placed a notice for comments on an approach to measuring data on green jobs

• Green jobs are “jobs involved in economic activities that help protect or restore the environment or conserve natural resources.”

• Seven Categories for green activities set out:– Renewable Energy– Energy Efficiency– Greenhouse Gas Reduction– Pollution Reduction and Cleanup– Recycling and Waste Reduction– Agricultural and Natural Resources– Education, Compliance, Public

Awareness and Training• Measurement will be based on either:

– Output approach which identifies establishments that produce green goods and services and counts the associated jobs based on the 7 categories above

– Process approach which identifies establishments that use environmentally-friendly production processes and practices and counts the associated jobs

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Status of Efforts to Measure Green “Output” Activities in Arizona

• Battelle is working to implement the U.S. BLS definition of establishments involved in green output

• Building upon listings of green firms, including:– Energy Star– Green Seal– Green Spec– US Green Building Council– Plunkett’s Alternative Energy– VC database– Patent database– National associations

• To date, Battelle has identified:– 1,392 Arizona green

establishments using BLS definition

– Expect to complete work by early June

– Then need to match to QCEW records (to be done by C2ER)

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Agricultural & Natural Resources Conservation 74Conservation 62Organic Farms/Organic Food Production 12

Education & Compliance 23Compliance 19Training 4

Energy & Resource Efficiency 147Battery & Energy Storage Technologies 4Electric/Hybrid Drive Technologies & Vehicles 2Energy Efficient Appliances 1Energy Efficient Building Products & Materials 83Energy Consulting & Auditing 35Energy Efficient HVAC 4Fuel Cells 2Smart Grid Systems/Smart Metering 13(blank) 3

Greenhouse Gas Reduction 7Nuclear Energy 5Smart Grid Systems/Smart Metering 1Clean Coal 1

Pollution Reduction & Cleanup 374Air & Water Purification 21Environmental Research & Consulting Services 264Green Chemicals 8Pollution Prevention 21Remediation Technologies & Services 60

Recycling & Waste Reduction 532Recycling 264Sewage & Solid Waste Collection/Treatment 268

Renewable Energy 145Biofuels/Biomass 9Hydropower Energy 1Solar 15Solar PV Energy 74Solar Thermal Energy 35Waste-to-Energy 1Wind Energy 7Other 3

(blank) 90(blank) 90

Grand Total 1392

Current Status of Green Establishments in Arizona based on BLS Proposed Definition

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Focus Group Discussions in Late April

• Key Topics of Discussion:– Overview of companies

in focus group– Competitiveness and

growth issues– Workforce issues– Perspectives on

Measuring Green Development

• Focus Group Meetings:– Flagstaff – mixed group– Phoenix – A&E, Mfg,

Construction– Prescott – one-on-one

interviews– Tucson – A&E, Mfg,

Community Stakeholders– Kingman – Renewable

Energy, Environmental Conservation, Green Products, Community Stakeholders

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Key Insights from Focus Group Discussions (1 of 3)• Competitiveness and Growth Issues:

– Importance of public sector incentives and required standards to fueling adoption of green activities — especially critical for green buildings, solar installation

- Arizona offering solar rebates, but uneven in public green building standards

- Arizona gray water requirements is an important, but unrecognized, driver

- Energy codes by local jurisdictions also seen as critical driver

– Short term cost concerns holding back wider adoption, especially in green building by private developers

- Cost of green materials is main cost driver

- Key role for insurance companies, REITs emphasize the importance of long-term cost savings from green activities

– Concern about Arizona’s competitiveness for green manufacturing - Tax structure in Arizona viewed as not competitive for highly capital intensive

industries and for manufacturing job creation

– Several respondents pointed to stronger niche for Arizona in green R&D companies, with related focus on engineering, demonstration and testing

– Concern about having “quality” work in solar installation - Need to design for Arizona’s specific conditions, especially heat.

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Key Insights from Focus Group Discussions 2 of 3

• Workforce Issues:– LEED certification

- Needed for only a defined set of occupations: Architects, Estimators, Office Engineers, Project/Site Managers

- Subcontractors are critical for implementing LEED — knowledge of green materials- Key concern is initial cost and keeping up certifications — interest in how to make this

more cost-effective– Solar Installation

- Big area of “job” demand — installers are typically already those workers involved in construction — adding new skills related to solar installation

- Consensus on skill sets: Electric skills (not AC, but DC), basics in roofing, basics in carpentry, basic design skills, project mgt/keeping logs

- Wide range of “skill” certifications makes it very confusing (NABCEP, ETA, ISPQ, SEI)- Critical to train building inspectors

– Manufacturing- Not clear if green is a new skill set- Training strengths found within individual companies- Some concerns voiced about strength of skill training for manufacturing fields across

the state, such as in precision machining– Environmental

- With gray water requirements, training of landscapers is becoming important

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Key Insights from Focus Group Discussions 3 of 3

• Measuring Green Development in Arizona: – Key input from Focus Groups is need to measure “deployment”

- How many installation of solar power systems- LEED buildings, LEED professionals- ISO 14,001 for manufacturers

• Other Insights:– Importance of public awareness – not uniform across the state – Need for public sector to be the driver for green development

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Measuring Green Development in Arizona

• Need to get Advisory Committee’s guidance on specific measures

• Focus on:– Innovation measures– Deployment measures

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Suggested Innovation Measures

Measure Why Is It Important? How Is It Measured?Publications Peer-reviewed articles

generated by university on green economy fields

• Specialized searches of publication titles and abstracts along with key publication fields maintained by the Institute for Scientific Information.

• Alternative would be to identify a set of key journals to track Arizona authors, but given multi-disciplinary nature of green economy fields do not recommend

Patents A measure of generating new ideas in the form of intellectual property

Includes both industry and universities

• Specialized searches of U.S. patents using the Thomson Delphion patent database requires having the definition of green economy finalized.

• Recommend focusing only on those patents whose inventors are based within a state

Federal Small Business Innovation Research Grants

A measure of emerging companies with product development ideas in green economy

• Categorize SBIR awardees in Arizona to identify those that fall within green economy fields and can track funding received.

Venture Capital Investments

A measure of emerging renewable technology companies

• Based on venture capital funds invested in renewable energy companies. Data obtained from the Thomson Venture Xpert venture capital base.

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Suggested Deployment MeasuresMeasure Why Is It Important? How Is It Measured?ISO 14,001 ISO 14001 is a series of international standards that

have been developed to incorporate environmental aspects into business operations and product standards, such as identification and evaluation of aspects and impacts, development of objectives and measurable targets, implementation of programs, and on-going monitoring and review.

Companies need to apply and be certified

LEED Buildings in Arizona

LEED is a third-party certification program and the nationally accepted benchmark for the design, construction and operation of high-performance green buildings.

LEED promotes a whole-building approach to sustainability by recognizing performance in five key areas of human and environmental health: sustainable site development, water savings, energy efficiency, materials selection and indoor environmental quality.

Energy Star Buildings and Manufacturing Plants

ENERGY STAR is a joint program of the U.S. Environmental Protection Agency and the U.S. Department of Energy helping us all save money and protect the environment through energy efficient products and practices.

To qualify for the ENERGY STAR, a building or manufacturing plant must score in the top 25 percent based on EPA’s National Energy Performance Rating System.

Energy Efficiency Building Codes Adopted by Local Jurisdications

Key driver for how buildings are managed ???? Look into number of jurisdictions adopting specific national/international energy codes. Outreach to US Green Building Coalition to learn more.

Solar Power Rebates

Key driver for adoption of solar power for buildings ????? Look into number of rebates awarded. Need to look into…may need to go to individual utility companies

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Green Innovation Performance Metrics

YearSBIR

Venture Capital

Patents PublicationsCompanies

Total Funding

2007 5 $1,277,903 - 36 67

2008 9 $2,360,993 - 27 78

2009 9 $3,510,095 - 30 103

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Green SBIR Awards• From 2007–2009, 17 Arizona companies received 29 SBIR awards,

totaling just over $7 million• 22 companies received nearly $2 million in Phase I funding and 7 companies

received more than $5 million in Phase II funding

• 4 companies accounted for more than half the number of awards granted and 80% of all Arizona SBIR “green” technology funding• Burge Environmental, Inc. (6 awards, $2.4 million); • Materials & Electrochemical Research Corp. (4 awards, $1 million); • Diversified Energy Corp. (3 awards, $950 thousand) • Virtual Technology, LLC (2 awards, $1.2 million)• Other Arizona companies that received SBIR awards for green technology include:

Ridgetop Group, Inc.Sion PowerSolar Fueled ProductsSolar Technology Research Corp.Southwest Windpower, Inc.Sundanzer Development, Inc.

Amsen Technologies, LLCCEDAR SystemsEco-Sol, LLCNavalis Environmental Systems, LLCOgden Engineering & Associates, LLCPhoenix Analysis & Design TechnologiesPolymer Chemistry Innovations, Inc.

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Green Patents• From 2007–2009 Arizona “inventors” and “assignees” were part of

93 “green-related” patents– 78 patents with at least one Arizona inventor and 52 with both an Arizona

inventor and assigned to an Arizona company.

• These patents were spread across 44 different patent classes.– Key patent classes and number of patents:

• These patents were spread across 64 different “assignees” including some not based in Arizona.– Companies with 3+ “green-related” patents

Liquid purification or separation 16Chemistry: electrical current producing apparatus, product, and process 11Batteries: thermoelectric and photoelectric 5Prime-mover dynamo plants 5Synthetic resins or natural rubbers 4

Sion Power Corporation (Tucson) 7Arizona Public Service Company (Phoenix) 5Medusa Special Projects, LLC (Tucson) 5AdobeAir, Inc. (Phoenix) 3Shell Oil Company (Houston, TX) 3

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Green Research Publications• From 2007-2009 Arizona organizations and institutions published

248 “green-related” articles (constituting 2.3% of all publications with at least one Arizona author). – The articles were captured through a detailed “green-related terms” query).

• These 248 articles were published in 126 different research journals and publications– Key journals and number of articles:

• Academic publications included: Arizona State University (118), University of Arizona (81), and Northern Arizona University (18)

Environmental Science & Technology 26Journal of Power Sources 12Water Research 11Water Environment Research 8Chemosphere 8Biodegradation 7International Journal of Hydrogen Energy 6

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Arizona Position in Deployment Measures

Measure Arizona Standing ISO 14,001 Web site indicates that Arizona is in 2nd-to-top quintile in

number of companies –• Looking to see if we can get specific number and

identify companies

LEED Buildings in Arizona

102 LEED Certified buildings in Arizona out of 4,703 nationally

• 6 Platinum• 41 Gold• 31 Silver

Energy Star Buildings and Manufacturing Plants

139 Energy Star building in Arizona out of 9,976 nationally

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Contact:

Mitch Horowitz

VP & Managing Director

Technology Partnership Practice

Battelle

Voice: (240) 462-5456

E-mail: horowitzm@battelle.org