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Job Creation Calculator

Permanent Link: http://ufdc.ufl.edu/UFE0041254/00001

Material Information

Title: Job Creation Calculator Assessing the Potential of Energy Conservation Investments
Physical Description: 1 online resource (308 p.)
Language: english
Creator: Fobair, Richard
Publisher: University of Florida
Place of Publication: Gainesville, Fla.
Publication Date: 2009

Subjects

Subjects / Keywords: building, conservation, construction, creation, development, economic, energy, estimating, job, manufacturing, regional, retrofit, sustainability, weatherization
Building Construction -- Dissertations, Academic -- UF
Genre: Building Construction thesis, M.S.B.C.
bibliography   ( marcgt )
theses   ( marcgt )
government publication (state, provincial, terriorial, dependent)   ( marcgt )
born-digital   ( sobekcm )
Electronic Thesis or Dissertation

Notes

Abstract: JOB CREATION CALCULATOR: ASSESSING THE POTENTIAL OF ENERGY CONSERVATION INVESTMENTS By Richard C. Fobair II December 2009 Chair: Charles J. Kibert Major: Building Construction This thesis presents a model for assessing the job creation potential of energy conservation investments that result from construction related installation activities and indirect job creation in the final stage of the supply chain providing the materials/products consumed in the installation activities. The model, based on construction estimating techniques, is flexible. Similar to a reverse estimate of construction cost, there is a step by step process to the calculation starting with a user input of investment dollars; backing out of contractor profit, overhead and cost of materials; then, allocating the labor portion of the investment based on loaded labor rates and typical crew make-up. Other program costs, such as design or engineering services, are not included in the model. For specific cases variables may be adjusted, including worker skill level, allocation of worker time per skill level, regional effect on job creation, rate of pay, and benefits. Outputs from the model include numbers of construction jobs and manufacturing jobs.
General Note: In the series University of Florida Digital Collections.
General Note: Includes vita.
Bibliography: Includes bibliographical references.
Source of Description: Description based on online resource; title from PDF title page.
Source of Description: This bibliographic record is available under the Creative Commons CC0 public domain dedication. The University of Florida Libraries, as creator of this bibliographic record, has waived all rights to it worldwide under copyright law, including all related and neighboring rights, to the extent allowed by law.
Statement of Responsibility: by Richard Fobair.
Thesis: Thesis (M.S.B.C.)--University of Florida, 2009.
Local: Adviser: Kibert, Charles J.

Record Information

Source Institution: UFRGP
Rights Management: Applicable rights reserved.
Classification: lcc - LD1780 2009
System ID: UFE0041254:00001

Permanent Link: http://ufdc.ufl.edu/UFE0041254/00001

Material Information

Title: Job Creation Calculator Assessing the Potential of Energy Conservation Investments
Physical Description: 1 online resource (308 p.)
Language: english
Creator: Fobair, Richard
Publisher: University of Florida
Place of Publication: Gainesville, Fla.
Publication Date: 2009

Subjects

Subjects / Keywords: building, conservation, construction, creation, development, economic, energy, estimating, job, manufacturing, regional, retrofit, sustainability, weatherization
Building Construction -- Dissertations, Academic -- UF
Genre: Building Construction thesis, M.S.B.C.
bibliography   ( marcgt )
theses   ( marcgt )
government publication (state, provincial, terriorial, dependent)   ( marcgt )
born-digital   ( sobekcm )
Electronic Thesis or Dissertation

Notes

Abstract: JOB CREATION CALCULATOR: ASSESSING THE POTENTIAL OF ENERGY CONSERVATION INVESTMENTS By Richard C. Fobair II December 2009 Chair: Charles J. Kibert Major: Building Construction This thesis presents a model for assessing the job creation potential of energy conservation investments that result from construction related installation activities and indirect job creation in the final stage of the supply chain providing the materials/products consumed in the installation activities. The model, based on construction estimating techniques, is flexible. Similar to a reverse estimate of construction cost, there is a step by step process to the calculation starting with a user input of investment dollars; backing out of contractor profit, overhead and cost of materials; then, allocating the labor portion of the investment based on loaded labor rates and typical crew make-up. Other program costs, such as design or engineering services, are not included in the model. For specific cases variables may be adjusted, including worker skill level, allocation of worker time per skill level, regional effect on job creation, rate of pay, and benefits. Outputs from the model include numbers of construction jobs and manufacturing jobs.
General Note: In the series University of Florida Digital Collections.
General Note: Includes vita.
Bibliography: Includes bibliographical references.
Source of Description: Description based on online resource; title from PDF title page.
Source of Description: This bibliographic record is available under the Creative Commons CC0 public domain dedication. The University of Florida Libraries, as creator of this bibliographic record, has waived all rights to it worldwide under copyright law, including all related and neighboring rights, to the extent allowed by law.
Statement of Responsibility: by Richard Fobair.
Thesis: Thesis (M.S.B.C.)--University of Florida, 2009.
Local: Adviser: Kibert, Charles J.

Record Information

Source Institution: UFRGP
Rights Management: Applicable rights reserved.
Classification: lcc - LD1780 2009
System ID: UFE0041254:00001


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1 JOB CREATION CALCULATOR: ASSESSING THE POTENTIAL OF ENERGY CONSERVATION INVESTMENTS By RICHARD C. FOBAIR II A THESIS PRESENTED TO THE GRADUATE SCHOOL OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE IN BUILDING CONSTRUCTION UNIVERSITY OF FLORIDA 2009

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2 2009 Richard C. Fobair II

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3 To my Dad and Grandfather

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4 ACKNOWLEDGMENTS I thank my committee for their assistance and input. I thank Dr. Kibert my committee chair, for the grant experience related to this thesis topic the many opportunities to get involved in the Powell Center for Construction and Environment and for being a wonderful mentor I thank Dr. Sullivan, my b uilding c onstruction ( BCN) committee member, for improving my presentation skills, getting me involved in the M.E. Rinker Sr. School of Building Construction, and for having an open door when I need good advice. I thank Dr. Maced o, my u rban r egional p lanning ( URP ) committee member, for being flexible throughout the entire thesis process and for helpful suggestions

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5 TABLE OF CONTENTS page ACKNOWLEDGMENTS ...................................................................................................... 4 LIST OF TABLES ................................................................................................................ 8 LIST OF FIGURES ............................................................................................................ 12 ABSTRACT ........................................................................................................................ 16 CHAPTER 1 INTRODUCTION ........................................................................................................ 17 Scope of Work ............................................................................................................ 19 Organization of Thesis ................................................................................................ 21 Summary ..................................................................................................................... 22 Problem Statement ..................................................................................................... 22 Contribution to the Body of Knowledge ..................................................................... 22 Thesis Target Audience.............................................................................................. 24 2 LITERATURE REVIEW .............................................................................................. 25 Defining Job Creation ................................................................................................. 25 Linking Jobs to Energy Conservation Investment ..................................................... 28 Literature Group #1 Focus on Multiplier Effect, Does NOT Provide Number of Direct and/or Indirect Jobs Created ............................................... 28 Literature Group #2 Does Provide Number of Direct and/or Indirect Jobs Created ............................................................................................................. 33 Paybacks for Energy Conservation Retrofits ............................................................. 38 London Borough of Barking and Dagenham ....................................................... 38 U.S. General Services Administration GSA Efforts through 2005 ................... 38 Review on Energy Savings per Unit Investment ....................................................... 39 U.S. Office of Management and Budgets Website: ExpectMore.gov ................ 40 City of Glendale Glendale Water and Power ................................................... 40 Retrospective Examination of Demand -Side Energy Efficiency Policies ........... 40 The Inclusion of Sustainability in Policy and Planning .............................................. 41 Sustainability ........................................................................................................ 41 Policy .................................................................................................................... 42 Planning................................................................................................................ 43 Local Economic Development ............................................................................. 44 Urban Sustainable Indicators .............................................................................. 45 Summary ..................................................................................................................... 48

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6 3 METHODOLOGY ....................................................................................................... 50 Energy Conservation Investment Deconstruction Process ....................................... 50 Determining the Base Energy Conservation Investment .......................................... 51 T ype of Building Estimating Assumptions and Incidental Work ................................ 52 Breakdown of Energy Conservation Base Investment into Labor and Mat erials/Products Allocations ................................................................................ 56 Conversion of Labor Allocation into Jobs .................................................................. 57 Conversion of Materials/Products Allocation into Manufacturing Labor ................... 58 Effects of Building Type on the Model ....................................................................... 59 Energy Conservation Job Creation Model ................................................................. 60 4 RESULTS AND ANALYSIS ........................................................................................ 61 Results ........................................................................................................................ 61 Analysis ....................................................................................................................... 85 Summary ..................................................................................................................... 86 5 CONCLUSIONS AND RECOMMENDATIONS ......................................................... 87 Recommendations for Further Research ................................................................... 88 APPENDIX A PROCEDURES FOR USING THE MODEL TO CONVERT ENERGY CONSERVATION INVESTMENTS INTO JOBS ....................................................... 90 STEP 1, Common for All ............................................................................................ 90 STEP 2, Common for All ............................................................................................ 90 STEP 3, Common for All ............................................................................................ 91 STEP 4, Common for All ............................................................................................ 91 STEP 5, Common for All ............................................................................................ 92 STEP 6, Common for All ............................................................................................ 92 STEP 7, Common for All ............................................................................................ 92 STEP 8, Common for All ............................................................................................ 92 STEP 9, Approach #1 ................................................................................................. 93 STEP 10, Approach #2 ............................................................................................... 93 STEP 11, Approach #2 ............................................................................................... 94 STEP 12, Approach #2 ............................................................................................... 94 STEP 13, Approach #2 ............................................................................................... 95 STEP 14, Approach #2 ............................................................................................... 95 STEP 15, Approach #2 ............................................................................................... 96 STEP 16, Approach #2 ............................................................................................... 96 STEP 17, Approach #2 ............................................................................................... 96 STEP 18, Approach #2 ............................................................................................... 97 STEP 10 18, Approach #3 ......................................................................................... 98 B INPUT TABLES AND RESULTS ............................................................................. 270

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7 LIST OF REFERENCES ................................................................................................. 304 BIOGRAPHICAL SKETCH .............................................................................................. 308

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8 LIST OF TABLES Table page 2-1 Definition of a Job: Comparison between Literature and Thesis .......................... 27 2-2 Literature Group #1 Focus on Multiplier Effect, does NOT Provide Number of Direct and/or Indirect Jobs Created ................................................................... 32 2-3 Literature Group #2 Does Provide Number of Direct and/or Indirect Jobs Created ................................................................................................................... 37 2-4 Payback Period GSA FY06 Energy Program .................................................... 39 2-5 Projected vs. Actual Savings for DoD Retrofits (BBtu/$M) ................................... 40 2-6 Projected vs. Actual Savings for DoD Retrofits (Mwh/$M) ................................... 40 4-1 National Average Jobs Created for $1 Million Investment in Energy Conservation by Approach #1 Per Trade ........................................................... 63 4-2 Southeast Region Jobs Created for $1 Million Investment in Energy Conservation by Approach #1 Per Trade ........................................................... 63 4-3 Southwest Region Jobs Created for $1 Million Investment in Energy Conservation by Approach #1 Per Trade ........................................................... 63 4-4 Northwest Region Jobs Created for $1 Million Investment in Energy Conservation by Approach #1 Per Trade ........................................................... 64 4-5 Midwest Region Jobs Created for $1 Million Investment in Energy Conservation by Approach #1 Per Trade ........................................................... 64 4-6 Northeast Region Jobs Created for $1 Million Investment in Energy Conservation by Approach #1 Per Trade ........................................................... 64 4-7 Wage Adjustment Factors for Regions versus National ....................................... 65 4-8 National Average Jobs Created for $1 Million Investment in Energy Conservation by Approach #2 Per Type of Building .......................................... 65 4-9 Southeast Region Jobs Created for $1 Million Investment in Energy Conservation by Approach #2 Per Type of Building .......................................... 66 4-10 Southwest Region Jobs Created for $1 Million Investment in Energy Conservation by Approach #2 Per Type of Building .......................................... 66 4-11 Northwest Region Jobs Created for $1 Million Investment in Energy Conservation by Approach #2 Per Type of Building .......................................... 67

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9 4-12 Midwest Region Jobs Created for $1 Million Investment in Energy Conservation by Approach #2 Per Type of Building .......................................... 67 4-13 Northeast Region Jobs Created for $1 Million Investment in Energy Conservation by Approach #2 Per Type of Building .......................................... 68 4-14 Square Foot (S.F.) Cost to Retrofit for Energy Conservation Compared to New Building Cost by Approach #2 Per Type of Building .................................. 69 4-15 Percent of CSI Division to Retrofit, Residential Single Family, Multi Family, and Institutional ...................................................................................................... 71 4-16 Percent of CSI Division to Retrofit, Retail, Office Low Rise, and Office High Rise ................................................................................................................ 72 4-17 Percent of CSI Division to Retrofit, School, Healthcare, and Industrial ............... 73 4-18 Percentage Split for Energy Efficiency and Incidental Work, Residential Single Family, Multi Family, and Institutional ........................................................ 74 4-19 Percentage Split for Energy Efficiency and Incidental Work, Retail, Office Low Rise, and Office High Rise .......................................................................... 75 4-20 Percentage Split for Energy Efficiency and Incidental Work, School, Healthcare, and Industrial ...................................................................................... 76 4-21 National Average for $1 Million Investment in Energy Conservation by Approach #3 Percentage Splits By CSI Division Per Type of Building ............. 77 4-22 Northeast Jobs Created for $1 Million Investment in Energy Conservation by Approach #3 Percentage Splits By CSI Division Per Type of Buildin g ............. 78 4-23 Southeast Jobs Created for $1 Million Investment in Energy Conservation by Approach #3 Percentage Splits By CS I Division Per Type of Building ............. 79 4-24 Midwest Jobs Created for $1 Million Investment in Energy Conservation by Approach #3 Percentage Splits By CSI Division Per Type of Building ............. 80 4-25 Northwest Jobs Created for $1 Million Investment in Energy Conservation by Approach #3 Percentage Splits By CSI Division Per Type of Building ............. 81 4-26 Northwes t Jobs Created for $1 Million Investment in Energy Conservation by Approach #3 Percentage Splits By CSI Division Per Type of Building ............. 82 4-27 Square Foot (S.F.) Cost to Retrofit for Energy Conservation Compared to New Building Cost by Approach #3 Percentage Splits By CSI Division Per Type of Building ...................................................................................................... 83

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10 4-28 Summary of National Averages for Jobs Created per $1 Million Investment for Approaches #1, #2 and #3 ............................................................................... 84 B-1 National Averages Used in Base Case ............................................................... 270 B-2 Base Case Variable Adjusted to Southeast Region ........................................... 271 B-3 Base Case Variable Adjusted to Northeast Region ............................................ 272 B-4 Base Case Variable Adjusted to Midwest Region ............................................... 273 B-5 Base Case Variable Adjusted to Northwest Region ........................................... 274 B-6 Base Case Variable Adjusted to Southwest Region ........................................... 275 B-7 National Average Wage Rates for Energy Conservation Contractors ............... 276 B-8 National Average Jobs Created f or $1 Million Investment in Energy Conservation ........................................................................................................ 277 B-9 Southeast Region Jobs Created for $1 Million Investment in Energy Conservation ........................................................................................................ 278 B-10 Southwest Region Jobs Created for $1 Million Investment in Energy Conservation ........................................................................................................ 2 79 B-11 Northwest Region Jobs Created for $1 Million Investment in Energy Conservation ........................................................................................................ 280 B-12 Midwest Region Jobs Created for $1 Million Investment in Energy Conservation ........................................................................................................ 281 B-13 Northeast Region Jobs Created for $1 Million Investment in Energy Conservation ........................................................................................................ 282 B-14 Adjustment Factors for Regions versus National ................................................ 282 B-15 National Benefits for Various Wage Rates .......................................................... 283 B-16 Sensitivity of Number of Installation Phase Jobs Created to Changes in Benefits by Region (Based on National Average of All Wages) ......................... 284 B-17 Sensitivity of Jobs Created to Callback, Warranty, Profit, and Overhead Assumptions ......................................................................................................... 284 B-18 Sensitivity of Jobs Created to Project Markup, Southeast .................................. 285 B-19 Sensitivity of Jobs Created to Project Markup, National Average ...................... 286

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11 B-20 Square Foot (S.F.) Construction Estimate of a Residential Single Family Building ................................................................................................................. 287 B-21 Squar e Foot (S.F.) Construction Estimate of a Residential Multi Family Building ................................................................................................................. 288 B-22 Square Foot (S.F.) Construction Estimate of a Residential Institutional Building ................................................................................................................. 289 B-23 Square Foot (S.F.) Construction Estimate of a Retail Building .......................... 290 B-24 Square Foot (S.F.) Construction Estimate of an Office Low Rise Building ........ 291 B-25 Square Foot (S.F.) Construction Estimate of an Office High Rise Building ....... 292 B-26 Square Foot (S.F.) Construction Estimate of a School Building ......................... 293 B-27 Square Foot (S.F.) Construction Estimate of a Health Care Building ................ 294 B-28 Square Foot (S.F.) Construction Estimate of an Industrial Building ................... 295 B-29 Variables/Assumptions for Approach #2 Percent of a Trades Value by Building Type ........................................................................................................ 296 B-30 Division Weights for Approach #2 Per Building Type and CSI Division .......... 296 B-31 National Base Case, Approach #2 Per Building Type, Jobs Created for $1 Milli on Investment in Energy Conservation ......................................................... 297 B-32 Northeast Region, Approach #2 Per Building Type, Jobs Created for $1 Million Investment in Energy Conservation ......................................................... 298 B-33 Southeast Region, Approach #2 Per Building Type, Jobs Created for $1 Mil lion Investment in Energy Conservation ......................................................... 299 B-34 Midwest Region, Approach #2 Per Building Type, Jobs Created for $1 Million Investment in Energy Conservation ......................................................... 300 B-35 Northwest Region, Approach #2 Per Building Type, Jobs Created for $1 Million I nvestment in Energy Conservation ......................................................... 301 B-36 Southwest Region, Approach #2 Per Building Type, Jobs Created for $1 Million Inv estment in Energy Conservation ......................................................... 302 B-37 Square Foot (S.F.) Cost to Retrofit for Energy Conservation Compared to New Building Cost by Approach #2 Per Type of Building ................................ 303

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12 LIST OF FIGURES Figure page 3-1 Flow Chart for Converting Energy Conservation Investments to Jobs Approach #1 Per Trade ....................................................................................... 53 3-2 Flow Chart for Converting Energy Conservation Investments to Jobs Approach #2 Per Type of Building ...................................................................... 54 3-3 Flow Chart for Converting Energy Conservation Investments to Jobs Approach #3 Percentage Split By CSI Division Per Type of Building ............... 55 A-1 STEP 1 ................................................................................................................... 99 A-2 STEP 2 ................................................................................................................. 100 A-3 STEP 3 ................................................................................................................. 101 A-4 STEP 4 ................................................................................................................. 105 A-5 TABLE 1, STEP 4 ................................................................................................. 106 A-6 TABLE 2, STEP 4 ................................................................................................. 109 A-7 STEP 5 ................................................................................................................. 115 A-8 STEP 6 ................................................................................................................. 129 A-9 STEP 7 ................................................................................................................. 130 A-10 STEP 8 ................................................................................................................. 131 A-11 STEP 9, Approach #1 .......................................................................................... 132 A-12 STEP 10, Approach #2 and #3 ............................................................................ 133 A-13 STEP 10, Approach #2 ........................................................................................ 134 A-14 TABLE 1, STEP 10, Approach #2 ....................................................................... 137 A-15 TABLE 2, STEP 10, Approach #2 ....................................................................... 138 A-16 TABLE 3, STEP 10, Approach #2 and #3 ........................................................... 140 A-17 STEP 11, Approach #2 and #3 ............................................................................ 143 A-18 STEP 11, Approach #2 ........................................................................................ 144

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13 A-19 TABLE 1, STEP 11, Approach #2 ....................................................................... 147 A-20 TABLE 2, STEP 11, Approach #2 ....................................................................... 148 A-21 TABLE 3, STEP 11, Approach #2 and #3 ........................................................... 150 A-22 STEP 12, Approach #2 and #3 ............................................................................ 153 A-23 STEP 12, Approach #2 ........................................................................................ 154 A-24 TABLE 1, STEP 12, Approach #2 ....................................................................... 157 A-25 TABLE 2, STEP 12, Approach #2 ....................................................................... 158 A-26 TABLE 3, STEP 12, Approach #2 and #3 ........................................................... 160 A-27 STEP 13, Approach #2 and #3 ............................................................................ 163 A-28 STEP 13, Approach #2 ........................................................................................ 164 A-29 TABLE 1, STEP 13, Approach #2 ....................................................................... 167 A-30 TABLE 2, STEP 13, Approach #2 ....................................................................... 168 A-31 TABLE 3, STEP 13, Approach #2 and #3 ........................................................... 170 A-32 STEP 14, Approach #2 and #3 ............................................................................ 173 A-33 STEP 14, Approach #2 ........................................................................................ 174 A-34 TABLE 1, STEP 14, Approach #2 ....................................................................... 177 A-35 TABLE 2, STEP 14, Approach #2 ....................................................................... 178 A-36 TABLE 3, STEP 14, Approach #2 and #3 ........................................................... 180 A-37 STEP 15, Approach #2 and #3 ............................................................................ 183 A-38 STEP 15, Approach #2 ........................................................................................ 184 A-39 TABLE 1, STEP 15, Approach #2 ....................................................................... 187 A-40 TABLE 2, STEP 15, Approach #2 ....................................................................... 188 A-41 TABLE 3, STEP 15, Approach #2 and #3 ........................................................... 190 A-42 STEP 16, Approach #2 and #3 ............................................................................ 193 A-43 STEP 16, Approach #2 ........................................................................................ 194

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14 A-44 TABLE 1, STEP 16, Approach #2 ....................................................................... 197 A-45 TABLE 2, STEP 16, Approach #2 ....................................................................... 198 A-46 TABLE 3, STEP 16, Approach #2 and #3 ........................................................... 200 A-47 STEP 17, Approach #2 and #3 ............................................................................ 203 A-48 STEP 17, Approach #2 ........................................................................................ 204 A-49 TABLE 1, STEP 17, Approach #2 ....................................................................... 207 A-50 TABLE 2, STEP 17, Approach #2 ....................................................................... 208 A-51 TABLE 3, STEP 17, Approach #2 and #3 ........................................................... 210 A-52 STEP 18, Approach #2 and #3 ............................................................................ 213 A-53 STEP 18, Approach #2 ........................................................................................ 214 A-54 TABLE 1, STEP 18, Approach #2 ....................................................................... 217 A-55 TABLE 2, STEP 18, Approach #2 ....................................................................... 218 A-56 TABLE 3, STEP 18, Approach #2 and #3 ........................................................... 220 A-57 ASSUMPTIONS Approach #2 .......................................................................... 223 A-58 DIVISION WEIGHTS Approach #2 ................................................................... 224 A-59 RESULTS 1 Approach #2 ................................................................................. 225 A-60 RESULTS 2 Approach #2 ................................................................................. 227 A-61 STEP 10, Approach #3 ........................................................................................ 228 A-62 STEP 11, Approach #3 ........................................................................................ 232 A-63 STEP 12, Approach #3 ........................................................................................ 236 A-64 STEP 13, Approach #3 ........................................................................................ 240 A-65 STEP 14, Approach #3 ........................................................................................ 244 A-66 STEP 15, Approach #3 ........................................................................................ 248 A-67 STEP 16, Approach #3 ........................................................................................ 252 A-68 STEP 17, Approach #3 ........................................................................................ 256

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15 A-69 STEP 18, Approach #3 ........................................................................................ 260 A-70 Assumptions: Labor -M aterial Split, Approach #3 ................................................ 264 A-71 Results 1 Approach #3 ...................................................................................... 266 A-72 Results 2 Approach #3 ...................................................................................... 269

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16 Abstract of Thesis Presented to the Graduate School of the U niversity of Florida in Partial Fulfillment of the Requirements for the Degree of Master of Science in Building Construction JO B CREATION CALCULATOR: ASSESSING THE POTENTIAL OF ENERGY CONSERVATION INVESTMENTS By Richard C Fobair II December 2009 Chair: Charles J. Kibert Major: Building Construction This thesis presents a model for assessing the job creation potential of energy conservation investments that result from construction related installation activities and indirect job creation in the final stage of the supply chain providing the materials/products consumed in the installation activities. The model, based on construction estimating techniques, is flexible. Similar to a reverse estimate of construction cost there is a step by step process to the calculation starting with a user input of investment dollars; back ing out of contractors profit, overhead and cost of materials; then, allocat ing the labor portion of the investment based on loaded labor rates and typical crew makeup. Other program costs, such as design or engineering services, are not inclu ded in the model For specific cases variables may be adjusted, including worker skill level, allocation of worker time per skill level, regional effect on job creation, rate of pay, and benefits. Outputs from the model include numbers of construction job s and manufacturing jobs.

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17 CHAPTER 1 INTRODUCTION Sustainability is an inter disciplinary topic. It is growing in prominence in the built environment as energy costs increase. Building owners are better informed consumers of high performance buildings evident by the ir use of building rating systems such as LEED, Green Globes, and Energy Star. Coincidentally, sustainability is establishing a foothold in the policy arena in the United States due to the recession experienced in 200809. The availability of Federal support for sustainable initiatives is unprecedented. This wellspring of funding, albeit due to dire circumstances, provides incentive for local planners to critically examine economic development initiatives in search of sustainable job creation opportunities. Unlike sust a inabi lity in the built environment, which has rating systems to measure and document the performance of a bui lding, planning does not have a clear cut method to calculate the number of jobs created by an economic development program Furthermore, the practice of urban planning has been criticized for its lack of identifying a definitive measurement procedure for sustainable policy. The measurement of jobs created due to energy conservation investments is a g ood predictor of success for a sustainable economic development policy. In this thesis investment in energy conservation for existing buildings is proposed as a good path to sustainable economic development. Th e product of this thesis is a calculator to measure the number of jobs that may be created by energy conservation investments in existing buildings. The strategy proposed deconstructs energy conservation investments into labor hours and materials/products based on construction industry norms. The materials/products portion is further deconstructed based on manufacturing industry

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18 norms into labor hours and materials costs to establish the number of jobs generated in the manufacturing sector. Theoretically, a further deconstruction of the materials costs in manufacturing could be made to establish the number of jobs created in the materials extraction or materials recovery sectors. This was n ot accomplished in this thesis due to the variety of industries that would have to be included in such an analysis. Additionally the number of jobs falls off by more than 50 % at each stage of the supply chain, the result being that perhaps no more than 10% more jobs than those created by installation and manufacturing for a given energy conservation investment are developed in the remainder of the supply chain. I f for example 20 installation and manufacturing jobs resulted from an energy conservation investment, no more than two jobs or 10 % of the total, would be created upstream in materials extraction and primary materials manufacturing. For the purposes of this thesis typical energy conservation activities were selected on which to base the developm ent of jobs: increased insulation, weatherization, heating and air -conditioning system retrofits, and upgrades to lighting systems. Both the commercial and residential sectors were included in this thesis This thesis is based on the assumption that energy conservation activities are very similar to construction activities. Indeed for the most part construction industry subcontractors also engage in remodeling and retrofit activities using the same types of workers and requiring identical skills. Some ap proaches determine the economic multiplier of investments in energy conservation, that is, how different combinations of purchasing and investment generate more economic activity than the investment itself. The economic multiplier effect occurs because dollars invested cascade through the

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19 local economy. Additionally money not spent on energy purchased from outside the community results in more money available to local residents, thus increasing job creation by indirect effects. The economic multiplier was not considered in this thesis the focus being on creating a fully justified model that conservatively estimates job creation using industry data. Additionally the loss of jobs due to lower energy consumption was not considered in this thesis The nu mber of jobs attributable to fewer power plant jobs is generally considered to be negligible. The end product of this thesis is a model that forecasts the number of direct installation and manufacturing jobs created as a consequence of investment in energy conservation activities. The model is based on typical energy conservation activities or various combinations of activities. It can be adjusted based on the wage rates and industry practices of different regions of the country. All the basic inputs and assumptions can be modified to change the circumstances of investments in order to conduct sensitivity analyses or to tailor the model for specific projects or scenarios. Scope of Work Th is thesis will determine the number, type, and wage value of labor hours involved in retrofits for energy efficiency, per dollar of investment. Retrofits is defined as upgrading systems and materials in existing buildings, or improving performance of existing systems and materials in existing buildings, through use of new technology, materials, and advancements in building construction techniques. Labor types will cover both on-site work and manufacturing work involved in materials used in projects, and will be summarized in categories that can be commonly understood in the policy arena. The thesis will further break down these findings by building type and region (e.g. Southeast U.S., Northeast U.S., Midwest, etc.), and it will determine whether the

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20 relationship between labor content and dollars invested is linear or takes some other form. Finally, the thesis will account for the reality that many retrofits are not done solely for energy savings, but also to address other building-related needs. Building types included are residential (single-family, multi -family, and institutional), retail, office (low -rise and high-rise), school s and health care. Industrial is excluded as industrial energy efficiency is usually related to the manufacturing process, rather than the building. In addition, the thesis will investigate e nergy savings outcomes for various building types in various regions, per dollar of investment. Knowing that energy savings per investment dollar will vary by the payback time selected by project owners, among other factors, the thesis will assess average s that can be used for policy-making purposes, with appropriate caveats. Energy savings for a type of building depends on the type of retrofit (e.g. HVAC, electrical, insulation, et cetera). Before specifying labor hours and wage rates for retrofits, the thesis will determine whether energy retrofits are essentially similar in labor content to general construction. If the labor involved is essentially similar, evidence will be presented. If not, the differences will be described. It is expected that some assumptions will have to be made in assessing retrofits (e.g. type of conservation measures chosen by project owner will vary because payback periods vary); therefore, assumptions are based on available sources of data. In the selection of types of work performed for conservation measures, the selection of conservation measures is based on data sources from state weatherization programs (residential) and Energy Service C ompanies ( ESCOs) (non-

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21 residential). The primary data source for labor estimates in construction will be R.S. Means, an industry -standard information vendor. Other considerations in the thesis include: 1. The thesis will use generally accepted construction industry approaches for allocating materials and labor for construction or construction -related activities. All energy conserving measures are performed by various subcontractors, most of whom not only do retrofits of existing buildings and housing stock, but also are engaged in new construction. Consequently thei r approach to allocating resources would be approxi mately the same for both. 2. The thesis will apply generally accepted overhead and profits to back out the base dollar value of typical subcontracts. 3. The base value will be allocated between materials and lab or. It is the latter number we are interested in to be able to back out the time associated with it, and thus the number of jobs that could be created. Labor rates from major regions of the country will be used to indicate the variance in jobs due to varying wage rates. The wage rates will be allocated across various skill levels that would be required for most energy conservation work. The thesis will use standard industry practices and references for this purpose. 4. The thesis will also consider the materials side of the equation in that this also translates into jobs in the factories or plants manufacturing the products and materials that are being utilized. The allocation of labor and materials at this point is not obvious, and thus this question will require further research into how this breaks down for various energy conservation measures. Organization of Thesis In addition to the development of a methodology and model for predicting the number of jobs created through energy conservation investments, previous research on this topic is reported in Chapter 2. For example, a snapshot of United Kingdom research indic ates that the model developed in this thesis predicts roughly the same number of jobs per unit investment in energy conservation measures as is the case in the United Kingdom. The methodology for creating the model is described in Chapter 3 and a flow chart showing the logic of the model is provided. The procedure for using the model is described. Chapter 4 provides the results generated by applying the model

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22 to various scenarios and analyzes the forecasts produced by the model. Chapter 5 summarizes the results of this thesis and makes recommendations for further research. Summary This thesis resulted in the development of a model that can be used to predict the number of jobs created by an investment in energy conservation. It uses an investment of $1 million as the base model and deconstructs this investment into the number of jobs likely to be created in the installation phase and the manufacturing phase. The model is based on commonly accepted methods for computing overhead and profit by subcontract ors engaged in energy conservation retrofits, on industry standard wage rates, on industry standard crew sizes, and on standard practice s for determining the wage rates of various worker types and skill levels. The model also estimates the number of jobs created in manufacturing the materials/products used in the installation phase based on commonly accepted allocations of labor and materials in these industries. The model can be varied to change all basic inputs and assumptions to assess a wide variety o f scenarios. Problem Statement This thesis was performed to establish the effects of energy conservation investments on job creation. Phrased as a question: How can direct and indirect job creation be calculated for energy conservation investments using c onstruction estimating techniques? Contribution to the Body of Knowledge This thesis provides a detailed definition of a job and a calculator for measuring job creation. The metric used is investment dollars, and the results are independent of the source of investment, whether public or private funds. Three approaches to

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23 calculating jobs is provided. Approach #1 requires the least knowledge of construction and is a good method: 1) To determine the level of funding required for investment in a local economic development program with the intent of creating a predetermined number of jobs, and 2) To evaluate proposed local economic development initiatives based on number of jobs created per million dollars of investment. Approach #2 and #3 require a significant knowledge of construction and building retrofits. They are better suited for use in determining jobs created based on the type of building to be retrofitted. Instances when given a specific type of building, using Approach #2 or #3, the approximate cost to retrofit can be determined from a recent estimate of a similar type building. Knowing the cost to retrofit a specific type of building, and if expected energy savings after retrofitting the building is known, payback period for an investment may be calculated. Additionally knowing the cost to retrofit a specific type of building in concert with knowing the number of jobs a specific level of investment will create a ids pol icymakers in designing economic development policy. W hich segments of the local community and how many of the local population will benefit and be affected by investments in energy conservation investments ? Is the goal of the policy to help homeowners or business owners? Is the policy designed to reduce burden on the local power generation infrastructure or create jobs? Goals do not have to be mutually exclusive, and methods of comparison (number of jobs created, energy savings, and payback period) may be used in unison. Finally, this thesis presents a winwin scenario. J obs created by energy conservation investments, e.g. building retrofits is a good practical example to reconcile the conflict between sustainability and planning. This thesis does not conflict with the

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24 classic argument jobs versus the environment because the jobs created benefit the environment. Furthermore, the e ffects of building retrofits are best measured at the local level; however, the model can be adjusted for regional differences. T he model provides for local level effects (construction installation jobs) and regional or national effects (manufacturing jobs) Thesis Target Audience The primary target audience for using this model is local economic development agenc ies that require a convenient method to compare and evaluate policy proposals where the metric of importance is number of jobs created. The secondary target audience is real estate developers. Developers may use the results of this thesis to justify a pr oposed development project is good for the local economy. Other target audiences may include economists and politicians.

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25 CHAPTER 2 LITERATURE REVIEW This section of the thesis will provide an overview of two major subjects that are connected to this thesis : the defin ition of a job and the connection between energy conservation investments and job creation An additional review is presented on paybacks for energy conservation retrofits, energy savings per unit and the inclusion of sustainability in policy and planning. Defining Job Creation Job creation is a hot issue among environmental advocates. Numerous studies are in progress to determine the employment impacts generated by renewable energy, green bui lding and building reuse, and sustainable economy. Some focus on direct job creation through company case studies, while others attempt to quantify the indirect impacts of jobs created through the linkage effect, which describes job increases due to new supplier chains, and the multiplier effect, which describes jobs created by increases in local spending within a micro economy. The U.S. Department of Labor uses a reference week that includes the twelfth of the month as do other states ( DOL 2009) The Florida Agency for Workforce Innovation (AWI) defines a job as any position, regardless of the number of weekly hours or attached benefits, that is worked by a person on the twelfth day of the month ( AWI 2009). During this week, anyone receiving a paycheck is considered to have a job. Clearly, this definition provides a sense of volume but no depth regarding whether jobs are part or full -time, short or long -term, or have benefits. An alternate method of calculating jobs that applies to full -time salaried employees is the assumption of 2,080 hours (52 weeks multiplied by 40 hours per week) worked per year, minus a set number

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26 of holidays at 8 hours per day. However, this method only applies in a scenario involving full -time or full time equivalent (FTE) employees. With respect to this thesis it will be assumed that we are addressing full -time jobs and that the job must have duration of one year. Additionally it will be assumed that the employee receives two weeks paid vacation and 10 paid holidays per year. Table 2-1 Definition of a Job: Compar ison between Literature and Thesis compares the definition of a job found in the literature review to the definition of a job used in this thesis

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27 Table 2 -1. Definition of a Job : Comparison between Literature and Thesis

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28 Linking Jobs to Energy Conservation Investment Although there is a significant body of literature on the economics of job creation, there is not a great deal written specificall y about the impacts of energy conservation investment on job creation. Literature that does address it may be divided into two groups. The first group of literature is case studies and scenarios that do not provide the number of direct and/or indirect jobs created. Results in this group focus more on the multiplier effect, where each one dollar of purchase generates more than one dollar of economic activity as that one dollar is used to make purchases over and over again. This first literature group sup ports an assertion that dollars from energy savings resulting from retrofits stays in the local community and creates indirect jobs. The second group of literature does provide the number of direct and/or indirect jobs created, and therefore provides numbers of jobs created per million dollars of investment that may be compared to the results of this thesis. Literature Group #1 F ocus on Multiplier Effect, Does NOT Provide Number of Direct and/or Indirect Jobs Created The U.S. Department of Energy (DOE) (1996) has produced research on what they term energy dollars the general theme being that local communities benefit in many ways from reducing energy purchases. According to DOE (1996) energy dollars are the funds a community spends on energy each year. The hypothesis is that reducing energy consumption results in savings, and noting that most often energy is generated outside the community, the savings remain in the community for other types of consumption, thus providing additional jobs. Based on DOE (1996) each $1.00 used to purchase local consumer goods produces $1.90 of economic activity in the local economy because the employer pays its employees who in turn purchase more goods

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29 using the same $1.00. The economic activity of $1.00 invested in petroleum products is about $1.51; for utility services $1.66; and, for energy efficiency $2.23 (DOE 1996) DOE provides Osage, Io wa, as an example of a town that benefitted from energy dollars. I n 1975 the City Utilities Department of Osage implemented an energy efficiency program that they claim benefited the towns economy, the result being that at the time of the report the unem ployment was half the national average. Fox River Mills, a manufacturer of socks with a plant in Osage reduced the energy input for manufacturing socks by 29 % per pair and employment rose from 110 to 310 in the period 1984 1996. The study does not describe any of the other conditions, beyond energy dollar savings, that may have contributed to the economic performance of both Osage and Fox River Mills, and thus does not rigorously link cause and effect. The strong economy experienced in this region and by this company could be due to entirely different effects. Other effects to consider are local economic growth, which is a function of the initial investments ; direct effects such as on -site jobs created due to energy; indirect effects or additional jobs created by the initial investment; induced effects through the additional economic activity caused by the initial event; and spending of the energy dollar savings through the purchase of additional goods and services, available because less money being spent on energy purchases. Oak Ridge National Laboratory ( ORNL ) researchers suggest substantial energy and non energy benefits from weatherization. For every dollar of federal funding inves ted in weatherization, the study predicted $1.83 worth of energy benefits and $1.88 worth of non energy benefits (ORNL 2002 ). Weatherization is the procedure of protecting a house from convective heat flow and moisture intrusion. Weatherization is

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30 not the same as building insulation, but weatherization will typically include methods to reduce energy consumption and improve energy efficiency. T he Public Interest Research Group ( Nayak 2005) theorized that for Florida, a state r enewable energy standard addressing 20 % of Floridas electricity supply, coupled with strengthened energy efficiency standards and a subsidy shift from fossil fuels could increase energy savings, gross state product, jobs, and wages. According to PIRG a clean energy package that includes all three features could directly generate approximately 7,000 jobs in the state, most of them highpaying. However, the study does not distinguish by industry, separate job creation due to energy efficiency standards from that due to other features of the plan, or distinguish retrofits from new construction related to efficiency. Input output, or multiplier, models are the methodology most applicable to the scope of the current project, and are used in two major studies conducted by the National Renewable Energy Laboratory (NREL) in the U.S. and the SAVE Employm ent project in Europe (Jeeninga et al 1999). These models determine the direct (immediate), indirect (supplier chains and local economies), and induced (employee spending increases) effects of expenditures. The result of the NREL pr oject ( Goldberg et al 2004) wa s JEDI, the Job and Economic Development Impact Model, a spreadsheet -based approach for calculating employment and economic increases achieved by the construction of wind farms. The spreadsheet gathers data on the size and location of the wind f arm and includes regional considerations of spending patterns within local economies in order to determine the cost and employment benefits of wind farms, and the strength of the multiplier effect.

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31 The SAVE Employment project ( Jeeninga et al 1999) addresses the employment impacts of energy conservation retrofits as a function of financing schemes (e.g., loans, subsidies, grants), based on case studies conducted in France, Germany, the Netherlands, Spain, the United Kingdom, and Finland. It uses an input -o utput model as well, although it discusses only residential retrofits, and it measures the output in labor years generated. However, the study notes that the positive effect on jobs due to energy efficiency programs is small compared to the large investment necessary. Table 2 -2 Literature Group # 1 Focus on Multiplier Effect, Does NOT Provide Number of Direct and/or Indirect Jobs Created provides a summary matrix of the literature focused on multiplier effects. This literature provides evidence that energy conservation investments create indirect jobs, but quantifiable results are preferred. In the next group of literature reviewed, numbers per million dollars of investment are provided.

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32 Table 2 -2. Literature Group # 1 Focus on Multiplier Effect does NOT Provide Number of Direct and/or Indirect Jobs Created

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33 Literature Group # 2 Does Provide Number of Direct and/or Indirect Jobs Created A study by the Center for Energy Studies at Louisiana State University reviewed, among other things, the employment that could be created by The Louisiana Energy Fund, a public -private endeavor designed to provide publicly funded institutions with low cost, tax exempt financing to implement energy and water conservation projects in Louisiana (Kaiser et al. 2004). This Fund serves as a n interest rate reduction vehicle for energy conservation projects implemented under a performance based energy efficiency contract. The report stated that for a total investment by the Fund in projects in seven parishes for $13.7 million, the associated employment increase was 297 jobs, or about 22 jobs per $1 million invested. They also predicted the creation of 16.2 jobs for ongoing maintenance of the systems costing approximately $490,000 annually, a ratio of 33 jobs per million dollars. The report does not describe the methodology employed in this research and does not describe the types of energy conservation activities, types of jobs, nor how the job creation numbers were determined. On a related type of investment, Bezdek and Wendling (2005 ) take issue with the theory that environmental protection removes rather than creates jobs. They define environment al jobs ambiguously as directly and indirectly -created positions that result fro m products or processes with reduced environmental impact. These jobs may be skilled or unskilled and many workers, they add, may not be aware of the environmental designation. The authors concluded that 5 million environmental jobs existed in the U.S. in 2004. The paper determined the percentage of environmental jobs within the construction industry is 4.7% but fails to separate out retrofits or energy efficiency measures.

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34 While the Bezdek and Wendling report is indicative of much of the broad -based research on environmental job creation, more specific data is available A progress report to the U.S. Department of Energy (DOE) analyzed the Weatherization Assistance Program (WAP), a DOE venture that offers energy efficiency upgrades such as insulation and storm windows to low -income families. The current WAP report s that 105,000 households are affected by the program, and 8,000 jobs are created within local economies (DOE 2007) The WAP Technical Assistance Center (TAC) website reports that weatheriz ation programs create 52 direct jobs and 23 indirect jobs for every $1 million invested (WAPTAC 2009) In an Iowa Study on weatherization programs o nly the economic activity and job creation benefits were quantified. The study concluded using an input output analysis that $240,000 worth of additional economic activity results from each $1 million of program spending. The benefit of this additional economic activity is 5.6 additional jobs, wh ich translates to about 23 jobs per $1 million invested Nonenergy benefits were not assigned a specific dollar value ; h owever, the study concluded that nonenergy benefits greatly increase the cost effectiveness of the program ( SLICE 1994 and Berry et al. 1997). Standards of Performance was a program run b y the Energy Saving Trust (EST) and wa s designed to stimulate the provision of cost effective energy saving measures throughout all sectors of the electricity franchise market ( King et al. 1998). The scheme was funded via a customer levy of up to 1 per y ear for each customer, amounting to a total of 5 million over a four year period (1994-1998). The Publi c Electricity Suppliers (PESs) we re required to give priority to schemes likely to exert general downward

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35 pressure on the charge per kWh to consumers i n order to encourage demand side management measures. A study of this program calculated that the scheme had generated 394 full time jobs per year over the four years, of w hich approximately half we re in installation and half are in project management and administration. This corresponds to 10 jobs per $1 million. The study also calculated that a total 67 indirect jobs have been gener ated Negative effects were considered in the report, but found to be negligible. This was based on PES information that the effect of the program would have minimal effects on the supply industry because: (I) the number of kWh saved is very small compared to that supplied; (ii) the profit of the supply company is now only partly related to volume provision; and (iii) the w ork effort required by the supply company has very little to do with units supplied. Other economic effects were discussed but found to have minimal effect in this particular program. In 2008, the National Association of Home Builders (NAHB) estimated 1.1 1 (FTE) jobs were created per $100,000 spent on residential remodeling (Fei Liu and Emrath 2008). This corresponds to 11.1 jobs per $1 million. Of the 11.1 jobs created per $1 million, construction jobs equal 5.4, manufacturing jobs equal 1.8, and other jobs equal 3.9. This estimate is based on national averages of home values. The report does not address if energy conservation investments are included in the home remodeling; however, it is common industry practice to remodel to current codes containing better energy conservation requirements. Table 2 -3 Literature Group #2 Does Provide Number of Direct and/or Indirect Jobs Created provides a summary matrix of the literature quantifying jobs created per million dollars of investment Direct j obs are construction installation or facilities

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36 maintenance related work. Indirect jobs either stem from the multiplier effect or are identified in categories labeled manufacturing and other. Literature Group #2 has various outcomes for number of jobs cr eated per million dollars of investment Methodologies for calculating the number of jobs created in each literature source is not provided, and therefore a problem exists of how to compare the results to each other or to future projects. This lack of methodology indicates a need for the job creation model developed in this thesis.

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37 Table 2 -3. Literature Group #2 Does Provide Number of Direct and/or Indirect Jobs Created

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38 Paybacks for Energy Conservation Retrofits Literature addressing paybacks for energy conservation investments vary over types of retrofit work performed, building types reported, and method of calculating the savings reported Payback, the time necessary (usually in years) for savings over a given period to equal the initial cost outlay, is important to consider when comparing options for investment. If given a choice between two energy conservation investments that create significantly equal number of jobs, payback period may be used as the deciding factor. For example, if two options create significantly equal number of jobs, the option that pays back the initial cost outlay sooner is better. Of course this assumes replenishing investment funds is a priority over other considerations such as energy gener ation from non-fossil fuel sources, e.g. photovoltaics London Borough of Barking and Dagenham The London Borough of Barking and Dagenham (LBBD) manages and maintains approximately 20,000 properties in London. Based on experience, it lists paybacks fo r various energy conservation measures (LBBD 2009) : Draft Proofing: 2 to 6 years Attic insulation: 2 to 4 years Wall insulation: about 5 years U.S. General Services Administration GSA Efforts through 2005 David Winstead (2007) Commissioner of the Public Buildings Service (PBS) in the U.S. General Services Administration (GSA), reported to the U.S. House of Representatives (through committee) that Congress had approved between $26 and $30 million dollars for energy retrofits. Project selection is b ased on the criteria of highest return on the investment. Using a simple payback, reported projects ranged from 3.8 years for building tune-ups, 3.9 years for lighting retrofits; 5.4 years for

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39 projects that addressed the power control systems; 6.2 years for improvements in chillers and boilers; to 21 years for solar projects (Winstead 2007) Table 2 -4 Payback Period GSA FY06 Energy Program summarizes the program results Of these projects, a total investment of $29 million produced a yearly savings of $4.7 million. Th e payback period for those projects is an average of just over 6 years The payback can be reduced to 5.5 years if the solar project (over 21 years) is eliminated. Table 2 -4. Payback Period GSA FY06 Energy Program Project Category No. of Projects Amount Funded Average Payback Control/Commissioning 15 $3,251,320 3.85 Lighting 7 $1,327,668 3.93 HVAC 14 $13,113,774 6.11 Solar 3 $4,643,500 21.02 Other 8 $6,827,204 5.86 All Projects Avg. Payback 47 $29,163,466 6.19 Note: 1. Other includes projects with multiple Energy Conservation Measures that cover more than one category Source for Reproduction of Data and Table: (Winstead 2007 ) Review on Energy Savings per Unit Investment Literature reviewed for payback and energy savings outcomes are not easily comparable due to lack of the standardization in the sources; however, the literature data provides a point of reference to discuss the actual potential energy savings per unit of e nergy conservation investment. Several literature sources with excerpts and summarizations of potential energy savings per unit of energy conservation investment are provided. The following sources provide for retrofit projects the energy savings per mil lion dollars in units of billion British thermal units or megawatt hours. Reporting the units of ener gy saved per million dollars invested in a retrofit project is a method that

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40 may be compared and contrasted to reporting jobs created per million dollars of investment U.S. Office of Management and Budgets Website: ExpectMore.gov The website provides energy improvements and results of improvement by the federal government. A s ummary of retrofits of DOD buildings in billion BTUs (BBtu) per $1 million in vested is given in Table 2 -5 Projected vs. Actual Savings for DoD Retrofits (BBtu/$M). Table 2 -5. Projected vs. Actual Savings for DoD Retrofits (BBtu/$M) Year Projected Annual Savings Actual Annual Savings 2005 15 BBtu/$M 17.86 BBtu/$M 2006 15 B Btu/$M 54.15 BB tu/$M Source: (OMB 2009) Billion Btus are converted to megawatt hours for easier comparison in Table 2 -6 Projected vs. Actual Savings for DoD Retrofits (Mwh/$M) Table 2 -6 Projected vs. Actual Savings for DoD Retrofits (Mwh/$M) Year Projected Annual Savings Actual Annual Savings 2005 4,400 Mwh/$M 5,300 Mwh/$M 2 006 4,400 Mwh/$M 15,900 Mwh/$M City of Glendale Glendale Water and Power Glendale Water and Power (Glendale, California) reported 8,500 Mwh of energy savings for $2.9 mil lion invested in residential and commercial energy efficiency programs (Haroutunian 2007). This information converts to an annual savings of 2,931 Mwh/$M invested. Retrospective Examination of Demand Side Energy Efficiency Policies The report provides a r eview of a broad range of non-transportation energy conservation programs. Based on data provided in the report, appliance energy

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41 conservation programs save 89,600 Mwh/$1M and utility demand side management programs save 29,890 Mwh/$1M (Gillingham et al. 2004) The Inclusion of Sustainability in Policy and Planning Urban and regional planning is the establishment of goals, policies or procedures for a city and surrounding areas. The planners role is to identify issues analyze them in a scientific manner, conceive a sustainable solution, and make unbiased recommendations to policy makers in order to ensure ethical land use within cities and the surrounding region for all affected groups in the public arena, including people, businesses and the environment. Planning is a diversified profession that includes balancing opposing interests, such as economic development and environmental protection. Sustainability In a review of literature on sustainability, the often cited source for the definition of sustainability is from a United Nations report by the Brundtland Commission, which states that sustainable development meets the needs of the present without compromising the ability of future generations to meet their own needs (Brundtl and 1987). Munasinghe (1992) broadens the definition of sustainability to include economic, environmental and social dimensions Elkington (1994) applies these dimensions to corporation s. He draws the attention of corporations to the value all three dim ensions add, not just the economic dimension. Elkington (2004) refers to these three dimensions as the triple bottom line The y a re often referred to as the three pillars of sustainability. The economic pillar refers to the ability of individuals and families to make a living and the ability of corporations to make a profit. The environmental pillar refers to efficient and careful stewardship of our natural resources (mined or harvested)

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42 and prevention of pollution into the natural environment from peoples activities, manufacturing activities, and operation of facilities in the built environment. The social pillar refers to a responsibility for a respectful interaction between corporations and communities in which the corporation has business activit ies, which includes observing human rights, improving working conditions and labor relations, and making charitable contributions (Willard 2002). Elkington and Willard gave a business tone to the discussion of these dimensions Policy Hawken (1993) acknowledges conflict exists between economists and ecologists but believes mutual agreement on some points is possible. First, he believes both will agree inefficiency in the form of pollution is costly. Second, improved efficiency in machines can simul taneously reduce global warming gases and save money on energy bills. He postulates that improved and/or increased use of ceiling insulation and doubleglazed windows can produce the equivalent energy in savings as current oil reserve projections and at about one -twentieth the cost, with four times the employment per unit of energy conserved versus the energy consumed by burning oil (Hawken 1993, p 1 79 ). He believes o ffering incentives to improve energy productivity (including efficiency and conservati on) will result in job creation. Hawken et al. (1999) support reeducating and helping workers in transition from energy related mining and refining industries in order to reduce their resistance to energy efficiency policies. They also recommend policy creation that supports the communities in transition from energy sector industries. Quoting Professor Steven DeCanio (1997), senior staff economist for President Reagans Council of Economic Advisors,

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43 Instead of a threat to jobs, reducing the economys dependence on fossil fuels can be seen as an investment and job creation opportunity, because of the new equipment and technologies that will be required. The conversion can be accomplished without any net loss of jobs; the role of policy is to minimize tra nsition costs and to ensure that any such costs do not fall disproportionately on narrow segments of the population Hawken et al. (1999) challenge local policy makers to innovate and make market oriented policy that lowers barriers to fuel efficiency and promotes the business opportunities that result from the energy efficiency policy. According to the U.S. Department of Energy 2008 Buildings Energy Databook (Table 1.1.1), buildings in the U.S. consume approximately 39 % of the energy and 74 % of electricity produced in the United States annually (EIA 2005 and 2008). DOE recommends energy conservation retrofits to reduce energy consumption. Retrofits extend the functional life of an existing building, helping communities avoid urban decay and urban sprawl. Leadership in Energy and Environmental Design (LEED) is a building rating system, but it could be used as a basis to form policy for building retrofits LEED Existing Building version 2.0 applies to a building that has over 50 % of its floor space and/or occupants affected by upgrades or retrofits. Specifically, Energy and Atmosphere (EA) prerequisite 2 (Minimum Energy Performance) and credit 1 (Optimize Energy Performance), addresses measuring energy consumption and performance strategi es to achieve energy use reduction. Planning Campbell (2003) addresses conflict s that exist between sustainability and planning, particularly that tension exists between the three pillars of sustainability and that the concept of sustainability in planning in its current use is too abstract He

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44 provides examples of conflicts that may be summarized as a classic battle of jobs versus the environment such as building a new development that displace s endangered wildlife or building a new factory that caus es water pollution Campbell argues that supporters of sustainability are vague in providing practical examples of ways to use sustainability i n planning, but that sustainability will be useful to planners when it is used as a lighting rod to focus confl icting economic, environmental and social int erests (Campbell 2003 p. 436). For example, creative planners can use the sustainable model to build coalitions between formerly opposed interest groups. Finally, Campbell (2003) believes planners can better evaluate the merits of sustainability in planning efforts if two levels of sustainability are considered: specific and general. For example, it is easier to evaluate if sustainability has been achieved on a local or single sector basis than it is a t a regional or national level. Local Economic Development Krumholz defines local economic development as a process by which local governments manage resources to stimulate private investment opportunities in order to generate new jobs and taxes (Krumhol z 2003 p. 224). It address es job creation through efforts in small business loans, small business development, neighborhood development, and real estate development (WBG 2009) It ensures government programs are in place to assist businesses in achieving their goals. Local economic development policy supported by government does not directly create jobs, but rather facilitates the natural process of existing businesses to hire new employees (WBG 2009) Blakely (1989, p. 59) explains that local economic development focuses on endogenous solutions that use the local human, institutional and physical resources.

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45 Support of a local economic development program typically comes in the form of financing; however, a dilemma exists of which project(s) to suppor t. Considering that financing is typically public monies and limited, a high level of accountability in selecting a program is required. Final decisions are often based on the perceived effectiveness of a program. A literature review on the topic of local economic development reveals an uncertainty of the effectiveness of local economic development activities. Using Krumholzs (2003) definition of economic development, if job creation is one measure of effectiveness, he doubts if the number of new jo bs is known or knowable for a given public program Marlin (1990 p. 15) summarized that despite billions of dollars and an ongoing controversy, practitioners and academics have generated surprisingly little empirical evidence regarding the effectiveness of economic development incentives or subsidies in promoting economic growth. Krumholz (2003) provided examples of cities investing in downtown redevelopment that reveal private sector profits result from public investments, but benefits to the unemployed in the form of jobs created could not be calculated. Urban Sustainable Indicators The concept of sustainability is penetrating the social science and urban planning disciplines; however, practitioners disagree over the definition of sustainability, its application in an urban setting, and methods to measure it in urban settings. Urban sustainable indicators (USI) are presented as one method to measure and compare sustainable aspects in communities and related policy; but, the problems with sustainabili ty of definition and application remain. Mitra (2003) offers a first step to

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46 resolve the problems presenting a foundation for a common terminology for sustainability, sustainable development, and sustainable indicators. Mitra (2003) defines sustainabi lity as a balance between human activity and nature that is subject to the opinion of individuals. In the context of urban planning, policy, and public administration, sustainability is better understood when its elements are perceived as: 1) Community re lated, 2) Based on holistic thinking, 3) In a continuous state of change, 4) Tied to goals, and 5) Uniquely defined. Mitra (2003) defines community (as in community-related) as a group organized around a common vision, goal, or structure. The element o f holistic thinking accounts for value in the study of complex relationships, but does not specifically include the three factors of sustainability. A continuous state of change is reference to a community changing its vision, goal, or structure of sustainability. Tied to goals refers to establishing a benchmark for measuring progress. Uniquely defined refers to each community has a different vision and agenda. Mitra (2003) identifies four aspects that distinguish sustainability from sustainable development, wherein sustainable development is: 1) Defined through community participation, 2) Threedimensional, 3) In a state of incompleteness, and 4) Emotional well -being. Community participation includes, but is not limited to, the affected population. It is important to note the distinction made by Mitra in selection of vocabulary between the terms group (used in sustainability) and affected population (used in sustainable development). The three dimensions are society, economy, and environment. Incompleteness refers to the body of knowledge is expanding as new research is performed. Emotional well -being refers to the affected populations mind-

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47 set; specifically, they have to believe or buy in to the communitys goals for the cause of change (e .g. policy) to last into the future. Indicators have many purposes, but are summarized as a mechanism for simplifying complex urban phenomena and relationships. Urban sustainable indicators (USI) are distinguished from traditional indicators by six char acteristics: 1) Holistic, 2) Trend descriptive, 3) Contextually relevant, 4) Responsive to change values, 5) Technically valid, and 6) Community driven. Holistic includes the three dimensions of sustainable development in addition to quality of life asp ects. Trend descriptive requires the indicator to track past, present, and future levels. Contextually relevant requires the indicator be reflective of the geographic region, environment, or social area under review. Responsive to changing values requires indicators be reviewed and updated. Technically valid requires data and statistical interpretation of data be performed by experts in a scientific fashion. Community driven suggests the best indicators are developed with input from numerous participants in the planning process. The article concludes by providing several observations about urban sustainable indicators and a review of current research. USI programs are best implemented at the city level. At the neighborhood, or micro-level programs lack legitimacy and thus are at a disadvantage. Government at all levels must be involved. Business responds better to reward systems than punishments. The selection of indicators is often a political process with a political agenda in mind. Public participation in selecting indicators mostly consists of politicians, policy makers, or social/natural scientists. Decision making would improve if a broader range of individuals participated. Lack of funding is the major issue for derailing successful indicator programs from moving forward. A

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48 clearly defined strategy for implementing an indicator program is necessary to prevent confusion. An USI report should be made that shows the progress (or lack thereof) towards sustainability. The report should include recommendations for improving the indicators. Indicators are useless without community buy -in. Finally, successful USI programs are attributable to a champion, someone who commits to make the program a success. Summary How do you evaluate an investment in energy conservation? A business approach may look at payback period, where a shorter payback of an investment is preferred. An environmental approach may look at the magnitude of energy savings (based on units of energy), where les s energy consumption equates to less carbon emissions and global warming. A societal approach may look at job creation, where a greater number of jobs stimulates a local economy more than fewer jobs. Literature is presented on paybacks and energy savings from building retrofits to provide some basic policy guidelines and demonstrate the practice. Examples of the multiplier effect are provided to introduce indirect job creation. Literature addressing direct job creation as number of jobs per million dol lars is limited; however, results of four studies are provided for comparison. Literature on sustainability in policy and planning is presented to demonstrate that a disconnect exists between sustainability and planning. For this thesis, local economic developm ent is considered a part of planning. E nergy conservation investments, i.e. building retrofits are proposed in this thesis as a good program for local economic development agenci es to support The concept of urban sustainable indicators is

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49 presented. U nderstanding the triple bottom line impact of energy conservation investments may lead to its use, or a derivative, as an urban sustainable indicator. This thesis is focused on job creation stemming from energy conservation investments. A r eview of the literature indicates two gaps exist in the body of knowledge. First, a clear definition of a job, i.e. quality job that includes benefits, is not found. Second, a method to calculate jobs stemming from energy conservation investments that is quick, logical and understandable to laymen (i.e. anyone lacking construction or retrofit experience) does not exist.

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50 CHAPTER 3 METHODOLOGY The approach for determining the number of jobs created by energy conservation investments used Jobs Created per $1 Million Investment as the basis for the analysis. Other levels of investment can be easily translated into the number of jobs they would create. The basic process of deconstructing the energy conservation investments takes into account actual industry norms for allocating project costs into labor and materials and continuing this process at the various stages in the supply chain. For the purposes of this thesis two stages in the supply chain, the installation phase and the manufacturing phase, are taken into account. Typical energy conservation activities were assessed for their job creation effects. These include insulation, weatherizat ion, and the retrofit of heating, cooling, and lighting systems. Both commercial/institutional and residential energy conservation activities were addressed. Energy Conservation Investment Deconstruction Process The flow chart in Figure 3.1 depicts Approach #1 Per Trade process for deconstructing energy conservation investments into jobs. The flow chart in Figure 3.2 depicts Approach #2 Per Type of Building process for deconstructing energy conservation investments into jobs. Figure 3.3 depicts Approach #3 Percentage Split By CSI Division Per Type of Building. The process starts with determining the level of investment and the type of investment or building type. For the purposes of this thesis a $1 million unit of investment is used as the starti ng point. It is assumed that scaling this level of investment to other levels, for example, $10 million or $100 million, is a linear relationship. Increasing an energy conservation investment by a factor of 10, for

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51 example, does not change the fundamental relationships used by industry to determine overhead and profit, does not affect wage rates, nor does it change upstream production. It may have a minor effect on the number of supervisory personnel versus direct labor, but this is probably a second ord er effect. The type of energy conservation investment is needed to establish the type of workers required for the particular project. Generally, workers engaged in projects requiring higher skill levels and education are paid more than workers in industri es requiring less sophisticated skills. Workers retrofitting heating, air -conditioning, and electrical systems will be compensated at higher rates than those engaged in insulation, weatherization, and retrofit of windows/doors. For this thesis, construct ion labor rates are based on average rates for a trade paid by contractors in Florida. Manufacturing labor rates are based on data from the Bureau of Labor Statistics, Department of Labor (BLSDOL 2001) and PayScale (2007), an online database for wage info rmation. The type of building is needed if desired job creation is by building type rather than type of investment because the type of energy conservation investment establishes the trade doing the work. A square foot cost estimate is needed by CSI Division of the building type to be retrofitted. For this thesis, estimates are based on cost data from RS Means Light Commercial Cost Data 26th Annual Edition (RCD 2006a), RS Means Residential Cost Data 26th Annual Edition (RCD 2006b), and ENR Square Foot Costbook 2007 Edition (DCR 2006) Determining the Base Energy Conservation Investment When the level and type of energy conservation investment or building type has been established, the base energy conservation investment must be determined by deducting t he overhead and profit utilized by the industry. For example, starting with an

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52 investment of $1 million, and assuming 10% profit and 10% overhead, the remaining investment is $0.8 million. Subcontractors have differing standards for backing out the quant ity of money available directly for the energy conservation project and these various approaches are considered in the model developed to estimate job creation due to energy conservation investments. Type of Building Estimating Assumptions and Incidental Work Retrofitting an existing building will require demolition, some in general such as removing ceiling tiles to access HVAC duct or wood trim to replace windows in a house, and some trade specific, such as HVAC subcontractor removing old ductwork to repla ce with new. The cost for demolition is included in each estimate by adding a square foot cost to a demolition line item. Demolition does not imply all old systems being retrofitted are removed. On the contrary, parts of some systems may be left in place, such as ductwork or light fixtures. New ductwork may be routed around old, and new light fixtures may be installed below old fixtures, if ceiling height allows it. Demolition costs are held to a minimum and only necessary demolition work is performed. Demolition not specifically performed by a trade is to be performed by the general contractor. Incidental work is drywall patching, wood trim repair, painting, et cetera as needed to finish a building after the retrofit is complete.

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53 Figure 31. Flo w Chart for Converting Energy Conservation Investments to Jobs Approach #1 Per Trade

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54 F igure 3-2. Flow Chart for Converting Energy Conservation Investments to Jobs Approach #2 Per Type of Building

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55 Figure 3-3. Flow Chart for Converting Energy Conservation Investments to Jobs Approach #3 Percentage Split B y CSI Division Per Type of Building

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56 Breakdown of Energy Conservation Base Investment into Labor and Ma terials/Products Allocations The base energy conservation investment must be broken down into labor and materials/product allocations. In general the allocation between labor and materials/products varies depending on the type of subcontractor. Those with more technically sophisticated products, for example, high SEER air -conditioning units may have a bias toward materials/product costs while those with unsophisticated products such as cellulose insulation could have a bias toward labor. Allocation between labor and materials/products also varies depending on type of building and its chara cteristics. Residential single family will vary in labor and materials/products from residential institutional. Low rise offices will vary in labor and materials/products from health care. RS Means Estimating (RCD 2006b) provides a residential single fa mily estimate that is 50% -50%. For commercial, U.S.G.B.C. LEED -NC (2006) guidelines for material credits allow a material default of 45% (for divisions 210), excluding division 11 (equipment/appliances), division 12 (furnishings), division 14 (conveying systems), division 15 (mechanical) and division 16 (electrical) which are material/equipment heavy. If U.S.G.B.C. included divisions 1116 in its materials calculation, the material cost would be greater than 45%. Argument can be made to adjust the split +/ 5%; however, based on the investigators (Fobair) experience the general split is in the range of 50% 50% for commercial construction industry and the base model uses this split as a starting point for commercial and residential construction. Approach #1 and Approach #2 utilize the general 50% -50% split. Approach #3 allows the user to input labor/material splits for each individual CSI Division directly or incidentally related to the energy efficiency retrofit.

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57 The CSI Division labor/material split s are based on industry experience and provided by Professor Charles Kibert. Residential Single Family and Multifamily carpentry materials are 30% due to more general use of stick frame construction for these buildings. Roofing, HVAC and Electrical are 65% labor, which reflects removing existing materials and systems before retrofitting. Based on industry experience, Fobair provided the percentage of each CSI Division to be retrofitted. Residential Single Family and Multi Family has 20% carpentry due to typical frame construction and multiple floors found on multi -family projects. Weatherproofing is high (90%) for Residential Single Family and Multi Family because of the type of construction and simple measures available to perform the retrofit. Weat herproofing is 50% due to industrial building design, such as preengineered metal buildings, that can easily have draft proofing measures incorporated into the retrofit. Insulation decreases from 50% (single family) to 30% (multi -family) to 0% (instituti onal) because on average single family could have floors and attic retrofitted/added, multi family could have attic/roof deck insulation retrofitted/added, and institutional roof insulation on metal deck is included in re roofing costs. Residential Sing le Family acoustical is 0% because most homes do not use acoustical ceilings. Residential Single Family HVAC is 85%, which considers system parts, such as ductwork, may not be replaced in all retrofits. Other building types are 95% which considers replacing all ductwork and equipment. The 5% not included is equipment racks, supports, and like kind incidental parts not part of the working system. Conversion of Labor Allocation into Jobs The labor portion of the allocation is divided by the fully load ed labor rate to determine the number of labor hours. Fully loaded is defined as adjusting the base

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58 labor rate to include benefits for the worker plus any overhead on labor such as insurance and workers compensation. For the purposes of this thesis a job is defined as one year of employment. A full year of work would be 2,080 hours assuming 40 hours per week for 52 weeks. With 2 weeks paid vacation and 10 paid holidays, the actual working year is 1,920 hours of paid employment per year. This is used as the starting point for taking the base wage rate and incrementing it with health, vacation, holiday, and pension benefits plus overhead on labor to determine the fully loaded labor rate. Some regions of the country provide minimal benefits to subcontra ctors engaged in energy conservation activities and the model developed in this thesis can be adjusted to account for differing practices. The labor portion of the contract is divided by the fully loaded labor rate to determine the number of hours of labor generated per year. For the base case, dividing the number of labor hours by 1,920 is the number of jobs created. As an additional refinement, the crew size for a typical energy conservation effort is determined to allocate wages across four levels of craftspeople: supervision, skilled, semi -skilled, and unskilled. This reflects the standard approach used by construction industry subcontractors in organizing crews to perform typical energy conservation tasks. Conversion of Materials/Products Allocation into Manufacturing Labor The materials/products allocation has a number of jobs that can be associated with it. Similar to the installation phase where a subcontractor must determine the subcontract amount by estimating labor hours and materials/products the manufacturer must also back out or deconstruct the labor and product cost. The manufacturers product cost estimate may be more involved (in comparison to subcontractors material cost) if broken into raw materials, recycled materials, or some type of intermediate

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59 materials. Cellulose insulation, for example, is manufactured from recycled newspaper. On the other hand, highperformance air -conditioning units are made of a combination of intermediate materials such as sheet metal and other manufactur ed products such as wiring, relays, and cooling coils. In the same pattern as the installation phase, the overhead and profit for manufacturing must be determined and then apply the manufacturer allocation of labor and materials to the factory work. As an initial estimate, this thesis assumes another 50% -50% split as the starting point in the model. Effects of Building Type on the Model One of the potential variables for the model developed in this thesis is the effect of building type on the number of jo bs created for a level of investment in energy conservation. For a given level of investment, some typical questions might be: Is there a difference in the number of jobs created, for example, in insulating a home versus a commercial building? Is there a difference in jobs created in retrofitting a homes air conditioning system with a high Seasonal Energy Efficiency Ratio ( SEER) system versus retrofitting a commercial building Heating Ventilation and Air Conditioning (HVAC) system with a high Coefficient of Performance ( COP ) system? Are there differences in jobs created by retrofitting home windows with high performance glazing versus those of a commercial building? The research in this thesis did address this issue and variations among commercial, institutional, multi -family residences/apartments, and homes were determined. Some commercial/institutional building retrofits require additional skills not needed in single -family homes or other buildings using residential scale systems. Additionally there are additional issues that need to be addressed with larger buildings such as increased heights, different windows, doors, and roofing systems. Building estimates for nine scenarios are

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60 provided. The estimates are adjusted based on the experience of the investigators from direct involvement on health care, school, residential institutional (jail), retail and residential single family projects. Energy Conservation Job Creation Model The model developed as a result of this thesis is a spreadsheet which can be used to provide a sensitivity analysis of the results provided in the base case scenario Appendix A indicates the recommended procedure for running the model and shows the inputs and outputs for running the base case. The model has eighteen worksheet s labeled as Steps that allow a wide range of variables to be tested.

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61 CHAPTER 4 RESULTS AND ANALYSIS The job creation effects of energy conservation investment were modeled using the general methodology outlined in the previous chapter. This model is shown in Appendix A along with instructions for its use. Appendix B contains results of applying this model to Approach #1, a base national case and to regional cases, and Approach #2, building types. It also contains tables that show the results of applying the energy conservation to jobs investment model. It indicates the wage rates, jobs created, and a sensitivity analysis to assess how the model is perturbed by changes in certain key base case results. Results The tables depicting the output of the model are organized according to (Approach #1) the types of subcontractors that would typically perform the installation work called for by energy conservation investments, (Approach #2) building type and CSI Division, and (Approach #3) CSI Division labor/material splits. The various Divisions shown in the tables are based on the Construction Specifications Institute (CSI) system for organizing construction documents. Each Division corresponds to one more or more trades. For example, Division 15 specifications would contain heating, air conditioning, plumbing, sheet metal, building controls, and plumbing contractors. Division 1 is for General Contracting which would be general energy conservation work or supervision of a team of contractors performing work Division 1 contractors are generally referred to as General Contractors and the nature of their work is organization and supervision of the various trades involved in a project. Simple projects may not have a Division 1 contractor. Division 6 includes trim carpentry and cabinetry work. Division 7 pertains to

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62 subcontractors who would perform roofing insulation, general insulation, and weatherproofing work. Door and window replacement would be accomplished by Division 8 subcontractors. Division 9 includes drywall, acoustical ceilings and painting. Division 11 is equipment and appliances. Mechanical system retrofits including changes to heating, air conditioning, and hot water systems are performed by Division 15 subcontractors and electrical system changes such as lighting system and lighting system controls retrofits would be under Division 16. Changes to control systems, for example installing a Building Automation System (BAS) which could assist in reducing energy consumption, would be covered under Division 15. Table 4 1 is a summary of Approach #1 base case in which national averages for wages and the assumptions in Table B -1 were used in the model. The range of installation jobs predicted by the model is 8 to 11 per $1 million dollars invested and about 3.67 manufacturing jobs. The total direct job creation for the base scenario ranges from 11 to 14 jobs per $1 million investment. Tables 4-2 through 4 -6 indicate how job creation varies with region based largely on differences in wage rate s. Total job creation per $1 million of energy conservation investment varies from 11 to 16 depending on region and type of subcontractor. Table 47 has an adjustment factor that indicates the differences in wages between regions.

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63 Table 4-1. National Average Jobs Created for $1 Million I nvestment in Energy C onservation by Approach #1 Per Trade Table 4 -2. Southeast Region Jobs Created for $1 Million Investment in Energy Conservation by Approach #1 Per Trade Table 4 -3. Southwest Region Jobs Created for $1 Million Investment in Energy Conservation by Approach #1 Per Trade

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64 Table 4 -4. Northwest Region Jobs Created for $1 Million Investment in Energy Conservation by Approach #1 Per Trade Table 4 -5. Midwest R egion Jobs Created for $1 Million Investment in Energy Conservation by Approach #1 Per Trade Table 4 -6. North east Region Jobs Created for $1 Million Investment in Energy Conservation by Approach #1 Per Trade

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65 Table 4 -7. Wage Adjustment Factors for Regions versus National Table 4 8 is a summary of Approach #2 base case per type of building in which building estimates in Tables B -20 through B -28, assumptions in Table B 29 and division weights in Table B 30 were used in the model. The range of installations jobs predicted by the model per $1 million invested for all building types is about 9 to 11. Manufacturing jobs range from 4 to 6. The total direct job creation for the base scenario is about 15 per $1 million investment. Tables 4-9 through 414 indicate how job creation varies with region based on differences in type of building. Total job creation per $1 million of energy conservation investment varies from 14 to 17 depending on region and type of building. Table 4 -8. Nationa l Average Jobs Created for $1 Million I nvestment in Energy C onservation by Approach #2 Per Type of Building

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66 Table 4 -9. Southeast Region Jobs Created for $1 Million I nvestment in Energy C onservation by Approach #2 Per Type of Building Table 410 Southwest Region Jobs Created for $1 Million I nvestment in Energy C onservation by Approach #2 Per Type of Building

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67 Table 4 11 Northwest Region Jobs Created for $1 Million I nvestment in Energy C onservation by Approach #2 Per Type of Building Table 4 12 Midwest Region Jobs Created for $1 Million I nvestment in Energy C onservation by Approach #2 Per Type of Building

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68 Table 4 13 Northeast Region Jobs Created for $1 Million I nvestment in Energy C onservation by Approach #2 Per Type of Building Table 4 14 is a summary of square foot (S.F.) costs for each of the buildings. Shown are new building square foot costs and energy conservation, or energy efficiency (E.E.), retrofit square foot costs. The costs are compared and shown as a ratio and percent. Residential Single Family buildings are approximately $25 per square foot to retrofit or one fourth the cost of a new house. Single family homes are the least expensive and provide the most s quare feet of retrofit for the least amount of investment. Residential Multi Family is next least expensive at approximately $29 cost per square foot to retrofit. Health Care is the most expensive building to retrofit at approximately $140 per square foot. Retrofitting a health care facility is about one half the cost of building a new facility.

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69 Table 4 14 Square Foot (S.F.) Cost to Retrofit for Energy Conservation Compared to New Building Cost by Approach #2 Per Type of Building Table 4 15 thru Table 4 -17 summarize the percent of CSI Division to retrofit. Table 4 18 thru 4-20 summarize the percentage splits between labor and materials for each CSI Division. Table 4 21 displays the base case National Average results for Approach #3, which calculates job creation using percentage splits for each CSI Division instead of a general 50% -50% split. The range of installations jobs predicted by the model per $1 million invested for all building types is about 12 to 14. Manufacturing jobs, based on PayScale (2007) wage rates, range from 4 to 5, or based on DOL (BLS DOL 2001) wage rate, average 3. The total direct job creation for the base scenario is about 16 to 17, depending on manufacturing wage rates, per $1 million investment. Tables 4-22 through 426 indicate how job creation varies with region based on differences in type of building. Total job creation per $1 million of energy conservation investment varies from 16 to 20 depending on region and type of building. Table 4 27 is a summary of square foot costs for each of the buildings, based on Approach #3 Percentage Splits By CSI Division P er Type of Building Shown are new

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70 building square foot costs and energy conservation, or energy efficiency (E.E.), retrofit square foot costs. The costs are compared and shown as a ratio and percent. Residential Single Family buildings, based on the base scenario, are approximately $18 per square foot to retrofit or one-fifth the cost of a new house. Single family homes are the least expensive and provide the most square feet of retrofit for the least amount of investment. Retail is next at approximately $22 per square foot and Residential Multi Family third at approximately $25 cost per square foot to retrofit. Health Care is the most expe nsive building to retrofit at approximately $125 per square foot. Retrofitting a health care facility is less than half (42%) the cost of building a new facility. Table 4 28 Summary of National Averages for Jobs Created per $1 Million Investment for Approaches #1, #2 and #3 summarizes the national average results for Approach #1 Per Trade, Approach #2 Per Type of Building, and Approach #3 Percentage Split by CSI Division per Type of Building. The summary includes the average and range of jobs per approach. For manufacturing, averages are provided for each separate source of wage rates, i.e. Department of Labor (DOL) and PayScale. The table includes an opinion of construction knowledge required by the user of the job calculator. Approach #1 requires the least knowledge. It is simple and quick to use. Approach #2 is complicated and requires knowledge of buildings to determine how much of a building based on (CSI Division) to retrofit Approach #3 is most complicated and requires knowledge of buildings and knowledge of construction industry costs and resources.

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71 Table 4 15 Percent of CSI Division to Retrofit, Residential Single Family, Multi Family, and Institutional

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72 Table 4 16 Percent of CSI Division to Retrofit, Retail, Office Low Rise, and Office High Rise

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73 Table 4 17 Percent of CSI Division to Retrofit, School, Healthcare, and Industrial

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74 Table 4 18 Percentage Split for Energy Efficiency and Incidental Work, Residential Single Family, Multi Family, and Institutional

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75 Table 4 19 Percentage Split for Energy Efficiency and Incidental Work, Retail, Office Low Rise, and Office High Rise

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76 Table 4 20 Percentage Split for Energy Efficiency and Incidental Work, School, Healthcare, and Industrial

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77 Table 4 21 N ational Average for $1 Million I nvestment in Energy C onservation by Approach #3 Percentage Splits By CSI Division P er Type of Building

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78 Table 4 22 N ortheast Jobs Created for $1 Million I nvestment in Energy C onservation by Approach #3 Percentage Splits By CSI Division P er Type of Building

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79 Table 4 23 Southeast Jobs Created for $1 Million I nvestment in Energy C onservation by Approach #3 Percentage Splits By CSI Division P er Type of Building

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80 Table 4 24 Midwest Jobs Created for $1 Million I nvestment in Energy C onservation by Approach #3 Percentage Splits By CSI Division P er Type of Building

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81 Table 4 25 Northwest Jobs Created for $1 Million I nvestment in Energy C onservation by Approach #3 Percentage Splits By CSI Division P er Type of Building

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82 Table 4 26 Northwest Jobs Created for $1 Million I nvestment in Energy C onservation by Approach #3 Percentage Splits By CSI Division P er Type of Building

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83 Table 4 27 Square Foot (S.F.) Cost to Retrofit for Energy Conservation Compared to New Building Cost by Approach #3 Percentage Splits By CSI Division P er Type of Building

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84 Table 4 28 Summary of National Averages for Jobs Created per $1 Million Investment for Approaches #1, #2 and #3

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85 Analysis The jobs created per unit energy conservation investment is a function of subcontractor type, location and building type. For example, total installation and manufacturing jobs vary from 11 to 16 per $1 million investment depending on type of subcontractor and region, from 14 to 17 per $1 million investment depending on type of building and region, and from 16 to 20 per $1 million investment depending on labor/material percentage splits per line item per building. Direct installation jobs vary from 8 to 11 depending on the subcontractor type and location, 9 to 11 depending on building type and location, and 12 to 14 depending on labor/material splits per line item per building type and loc ation per $1 million investment with an additional 3 to 4, 4 to 6, or 4 to 5 manufacturing jobs per $1 million investment created depending on the materials and products being supplied for installation. Division 1 General Contractors tend to produce the l owest number of jobs, 8 to 9 per $1 million investment depending on location while Division 8 Weatherproofing Contractors produce the most jobs per unit investment, 10 to 12, depending on location. Residential Single Family buildings tend to produce the m ost jobs across all regions and at approximately $18 (per Approach #3) per square foot produces the most square foot of retrofitted area per dollar. There is an approximately 8% variation in regional jobs compared to the national average for energy conser vation investments. In addition to the base and regional cases, sensitivity analyses were run on Approach #1 to determine the effects of changing basic assumptions. The effect of changing worker benefits across a wide range of potential scenarios using national average wages rates across all regions resulted in installation jobs varying from 9 to 11 per $1 million investment (Table B -16). A variety of profit, overhead, callback and

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86 warranty assumptions resulted in total jobs based on national average wage rates varying from 12 to 16 per $1 million investment (Table B 17). Using the southeast region as the basis, and varying profit, overhead, callback, and warranty assumptions, total jobs varied from 14 to 18 per $1 million investment (Table B 18). The impacts of changing assumptions on profit, overhead, callback, and warranty parameters shows that jobs vary from 1,265 to 1,592 for a $100 million dollar investment, from 127 to 159 for a $10 million investment, and from 13 to 16 for a $1 million investment (Table B 19). Summary The model developed for this thesis provides a conservative estimate of jobs created for various levels of energy conservation investments and uses construction industry standards for wages, benefits, profit, overhead, callbacks, and warranty for the installation phase of the energy conservation work. In addition, using the best available information on manufacturing industry job production, the number of jobs created in the last level of the supply chain prior to the installation phase is estimated. The mean number of total jobs created for all regions and using average wage rates for all contractors is about 16 per $1 million investment. Similarly, the mean number of jobs created in installation is about 11 jobs per $1 million investment with 5 jobs per $1 million investment resulting in the manufacturing stage directly supplying the installation companies.

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87 CHAPTER 5 CONCLUSIONS AND RECO MMENDATIONS This thesis produced a model for estimating job creation due to energy conservation investments. It considers direct job creation due to installation activities and indirect job creation in manufacturing the materials and products used by installation subcontractors in the final stage of the supply chain. It does not consider job creation beyond the final stage in the supply chain nor does it consider the economic effects of keeping money in the community, with the possibility of creating even more jobs. It is desi gned to conservatively estimate the number of jobs created based on reasonable assumptions, using actual data from contractors engaged in energy conservation projects. The model employs construction industry norms for wages, benefits, overhead, profit, callbacks, and warranty and backs out the number of jobs created as a consequence of investing in energy conservation projects. Results for national average conditions and regional variations were produced and summarized. As noted in the previous chapter, the mean number of total jobs created for all regions and using average wage rates for all contractors for all approaches is about 16 per $1 million investment. Similarly, the mean number of jobs created in installation is about 11 jobs per $1 million in vestment with 5 jobs per $1 million investment resulting in the manufacturing stage directly supplying the installation companies. It is assumed that these numbers scale linearly with increasing or decreasing investments, such that average number of installation jobs for a $10 million investment would be approximately 100 jobs while for a $100 million dollar investment this would increase to 1,000 jobs. Corresponding manufacturing jobs would be approximately 4, 40, and 400 jobs.

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88 The results of other stud ies and research are not easy to compare to the results of this thesis In Chapter 2 it was noted that the Louisiana Fund predicted 22 jobs per $1 million invested in energy conservation projects while the Iowa Study predicted 23 jobs. It is unclear fro m the information in these studies which of these jobs are direct jobs, which are due to manufacturing, and which may be due to the effect of shifting energy dollars to the community. The Energy Savings Trust study in the U.K. provides results that appear to be based on the type of approach in this thesis the result being that for a 5 million investment ($39.5 million at the exchange rate of 1.58 dollars per pound sterling at that time), 10 direct jobs were produced per $1 million invested, exactly the same level of employment predicted by the model developed for this analysis. This seems to be a reasonable number based on industry standard practices. If a very large national investment in energy conservation were made which required that a substantial portion of the investment were to be devoted to job training, wages would be generally lower, at least temporarily, and the number of jobs would be correspondingly higher for this time frame. For the general conditions today, the number of jobs indicated as being produced in this thesis is thought to be both conservative and reasonable. Recommendations for Further Research The model developed for this thesis is based primarily on the installation phase of energy conservation projects and the level of detail is quite high, taking into account details of worker compensation and benefits as well as industry standards for overhead and profit. It also includes consideration of other costs that are normally considered by industry in its accounting and costing, namely callback and warranty costs. The modeling of manufacturing jobs is very simple by comparison and generally assumes that overhead and profit is about the same as construction industry and that the split

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89 between materials and labor is about equal. More detailed modeling of the actual practices of manufacturing industry would produce a more refined model and more insight into the number of jobs produced. Research of this kind would improve the job definition for manufacturing jobs. M odeling of jobs in the other stages of the supply chain such as resource extraction and primary materials production could be included. In general it is probable that the number of jobs in each succeeding state of production is about 40% of the prior stage. For example, 10 installation jobs produces 4 manufacturing jobs and probably 1 to 2 jobs in primary materials manufacturing and materials extraction. The effects of primary materials manufacturing and the effects of resource extraction were not included in this model. T he economic effects of transferring energy dollars from purchased energy outside the community to energy conservation jobs within the community were not included. These effects could be modeled to produce a more detailed picture of the total imp act of energy conservation investments in a community. The job creation potential of the linkage effect from new supply chains could be explored. Material reuse businesses (i ncluding materials downcycled) and r ecycling businesses could be included in the model to determine the effect of energy conservation investments on these niche markets. The model is flexible, and could easily be expanded to include the job creation potential of retrofitting buildings when the scope of work is expanded beyond energy co nservation items. Additionally, an approach could be modeled to determine the job creation potential of deconstruction.

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A 90 APPENDIX A PROCEDURES FOR USING THE MODEL TO CONVERT ENERGY CONSERVATION INVESTMENTS INTO JOBS The following describes the procedure for using the energy conservation investment to jobs model developed in this thesis The model is a spreadsheet allowing input of pertinent overhead, profit, and wage information for the installation phase and output of jobs produced for a given investment. The inputs and outputs shown in this Appendix are for the base case which is the national average for all parameters. STEP 1 Common for All 1) Enter contract value (actual or estimated) for the Energy Efficiency Retrofit/Upgrade. 2) Enter Profit margin (actual margin allowed or estimated) for this contract. By default, use 10% for a standard profit. 3) Enter Overhead margin (actual margin allowed or estimated) for this contract. By default, use 10% for a standard overhead. 4) Enter Callbacks & Warranty margin (actual margin allowed or estimated) for this contract. By default, use 1% for a standard callbacks and warranty. The subtotal cell returns the contract value less profit, overhead and callbacks and warranty markups. 5) Enter distribution of Labor and Materials as a percentage. Total percentage must equal 100%. The cell displays a message CORRECT or ERROR MUST EQUAL 100%. By default, a 50% labor and 50% material split is recommended. A division of labor and material values is provided. The values are minus all common markups for a construction contract. STEP 2 Common for All 6) Distribution of contract value subtotals for Labor and Materials (carried over from STEP 1) is shown. 7) Dollar value of labor as percentage of subtotal (carried over from previous page) is shown. 8) Enter Work Week Hours for typical work week. Use 40 hours for a standard work week. 9) Enter estimated percent of Work Week Hrs to be allocated for each worker category in % of Work W eek Hours. 10) Allocated Hrs/Wk is the product of % of Work Week Hours multiplied by Work Week Hrs.

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A 91 11) % of Crew Hrs/Wk is the ratio of Allocated Hrs/Wk for a Worker Category to the sum of Allocated Hrs/Wk for all worker categories. 12) Yearly Value is total dollars allocated for all hours to be worked by a Worker Category. It is the product of % of Crew Hrs/Wk multiplied by $ Labor Subtotal. 13) Hrs Billed To This Project is the ratio sum of Allocated Hrs/Wk for all categories to sum of Work Week Hours for all categories. 14) Other indicates the percentage of hours billed to other projects or workers worked less than a 40hour week. STEP 3 Common for All 15) Vacation Pay varies but is commonly based on time with company or negotiated when hired. Four scenarios are shown. Enter a number (0-4) for paid vacation weeks provided as a benefit. Hours accrue over time at work. Semi -Skilled and Unskilled Labor have been grouped as All Others. 16) Sick Pay varies but may be provided on a discretionary basis, negotiated when hired, or time with company. Five scenarios are shown. Enter a number (05) for paid sick days provided as a benefit. Hours accrue over time at work. Semi Skilled and Unskilled Labor have been grouped as All Others. 17) Holiday P ay may vary and commonly depends on company policy. Six scenarios are shown. Enter a number (06) for paid holiday days provided as a benefit. Hours based on policy are given regardless of time accrued at work. Semi -Skilled and Unskilled Labor have been grouped as All Others. 18) Pension Vesting/401k Matching varies based on company policy. The recommended Yearly Amount default is the IRS allowable 401k contribution amount based on the taxable year of users choice. For this study, the investment matching allowance is dollar for dollar by employer on the first 3% and fifty cents on the dollar by employer on the next 3%. STEP 4 Common for All 19) Average wage rates for four worker categories are provided. These averages are based on industry surveys and published data sources. 20) Regional adjustment factors are averages of state metro area multipliers grouped by state into one of five regions. Metro multipliers are taken from ENR Square Foot Costbook, 2007 Edition. 21) Enter a regional adjustment factor for users location from the factors provided in the following table. Displays message OK or PLEASE SELECT A REGION or ERROR PLEASE SELECT A DIFFERENT ADJUSTMENT FACTOR. The Hourly Wage Rate ($) Adjusted By Region displays regionally adjusted wag es for all worker categories.

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A 92 TABLE 1, STEP 4 Tables display a summary of wage rates resulting from surveys of Florida contractors. TABLE 2, STEP 4 Regional Multipliers are calculated from state metro multipliers. States per region are indicated. Metr o Multipliers are from ENR Square Foot Costbook, 2007 Edition. (Similar multipliers can be found in RS Means Guides but for more cities.) STEP 5 Common for All 22) Enter estimated number of weeks for a Supervisor (Project Manager) to perform project Startu p and project Closeout when workers are not onsite. Weeks of Work by workers is reduced by weeks of Startup and Closeout. 23) Total Jobs Created on a Yearly Basis is based on weeks in a year less paid weeks of vacation. STEP 6 Common for All 24) Dist ribution of contract value subtotals for Labor and Materials) carried over from STEP 1). 25) Dollar value of materials as percentage of subtotal (carried over from STEP 1). 26) Enter "Profit" margin (actual margin allowed or estimated) for manufacturer. Use 10% for a standard "Profit". 27) Enter "Overhead" margin (actual margin allowed or estimated) for manufacturer. Use 10% for a standard "Overhead". STEP 7 Common for All 28) Enter distribution of "Labor" and "Mate r ials" as a percentage. Total percentage must equal 100%. Displays message "CORRECT" or "ERROR MUST EQUAL 100%". 29) Enter a regional adjustment factor for user's location from the factors provided in the following table. Displays message "OK" or "PLEASE SELECT A REGION" or "ERROR PLEASE SELECT A DI FFERENT ADJUSTMENT FACTOR STEP 8 Common for All 30) Breakdown of an Average Hourly Loaded Labor Rate for Manufacturing uses data from Bureau of Labor Statistics, Department of Labor, Employer Costs for Emp loyee Compensation March 2001, and data from Pa yScale at www.payscale.com When a region is selected in STEP 7

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A 93 DOL Average is adjusted by the region multiplier and the worker categories pull wage rates in from Table Manufacturing Assemblers & Workers. Total Jobs Created on a Yearly Basis is based on a 48week work year. The assumption is two weeks are paid leave and two weeks are holidays STEP 9 Approach #1 31) Compares jobs created across all CSI Divisions and manufacturing for specified contract value of r etrofit/upgrade. User can forecast jobs created in location of installation phase and location of manufacturing phase. Location of each phase can be a separate region. STEP 10 Approach #2 32)STEP 1 asked the user for contract value of the energy efficient retrofit/upgrade. STEPs 29 assumed the entire contract value to be one CSI division category of work. When given different scenarios, i.e. different building types and an estimate for the building, the user specified contract value can be brok en into a Schedule of Values (SOV) for energy retrofit work and incidental work. The SOV is derived from the weighted value of each CSI Division line item multiplied by contract value less markups. 33)Scenario: Building Type: Residential Single Family 34)Contract recap from STEP 1: 35)User can input number of homes or total square feet to be retrofitted in order to determine a total cost for the magnitude of the retrofit. Note the Total S.F. Cost includes markups. 36)The value of each category is determined by multiplying the category percentage by contract value less markups. 37)Based on the given scenario and contract value, the square feet of building that can be retrofitted is calculated. 38)Applicable wage rate (STEP 5) and percent of crew hours per week per worker category (STEP 2) are used to calculate the worker category value within a line item. 39)Weeks of work are divided by calculated work weeks in a year to determine number of jobs per worker category per division line item. Table 1, STEP 10 40)Table displays the cost and percentage of energy efficiency and incidental work including markups. Table 2, STEP 10 41)Summary view of CSI Divisions less the sensitivity function. Table 3, STEP 10

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A 94 42) Estimate the Square Foot (S.F.) cost of a building. Categorize the estimate by 16 CSI Divisions. Leave out markups. This is the Schedule of Values for the given scenario. User can check line item estimate values for sensitivity to each individual line item value. 43)Break out tradework in a division likely to be performed for an EE Retrofit and place in a separate line item on the SOV. 44)Filter out direct and incidental line items of work performed during EE Retrofit. The result is the Adjusted Schedule of Values (ASOV). 45)Calculate SF per centage of each ASOV line item. This is the weighted value of each line item. Select a percent to retrofit of each line item of the ASOV. The percentage returned represents the percent of each line item by division and tradework for an EE Retrofit contr act. 46)Apply SF percentage for each line item to proposed contract amount (minus Profit, Overhead and C&W). End result is an EE Retrofit SOV including incidental work. STEP 11 Approach #2 47)See item 32 48)Scenario: Building Type: Residential Mult i Family 49)See item 34 50)User can input number of buildings or total square feet to be retrofitted in order to determine a total cost for the magnitude of the retrofit. Note the Total S.F. Cost includes markups. 51)See item 36 52)See item 37 53)See it em 38 54)See item 39 Table 1, STEP 11 55)See item 40 Table 2, STEP 11 56)See item 41 Table 3, STEP 11 57)See item 42 STEP 12 Approach #2 58)See item 32 59)Scenario: Building Type: Residential Institutional 60)See item 34 61)See item 50 62)See item 36 63)See item 37 64)See item 38

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A 95 65)See item 39 Table 1, STEP 12 66)See item 40 Table 2, STEP 12 67)See item 41 Table 3, STEP 12 68)See item 42 STEP 13 Approach #2 69)See item 32 70)Scenario: Building Type: Retail 71)See item 34 72)See item 50 73)See item 36 74)See item 37 75)See item 38 76)See item 39 Table 1, STEP 13 77)See item 40 Table 2, STEP 13 78)See item 41 Table 3, STEP 13 79)See item 42 STEP 14 Approach #2 80)See item 32 81)Scenario: Building Type: Office Low Rise 82)See item 34 83)See item 50 84)See item 36 85)See item 37 86)See item 38 87)See item 39 Table 1, STEP 14 88)See item 40 Table 2, STEP 14 89)See item 41

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A 96 Table 3, STEP 14 90)See item 42 STEP 15 Approach #2 91)See item 32 92)Scenario: Building Type: Office High Rise 93)See item 34 94)See item 50 95)See item 36 96)See item 37 97)See item 38 98)See item 39 Table 1, STEP 15 99)See item 40 Table 2, STEP 15 100)See item 41 Table 3, STEP 15 101)See item 42 STEP 16 Approach #2 102)See item 32 103)Scenario: Buildin g Type: Office School 104)See item 34 105)See item 50 106)See item 36 107)See item 37 108)See item 38 109)See item 39 Table 1, STEP 16 110)See item 40 Table 2, STEP 16 111)See item 41 Table 3, STEP 16 112)See item 42 STEP 17 Approach #2 113)See item 32 114)Scenario: Building Type: Office Health Care

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A 97 115)See item 34 116)See item 50 117)See item 36 118)See item 37 119)See item 38 120)See item 39 Table 1, STEP 17 121)See item 40 Table 2, STEP 17 122)See item 41 Table 3, STEP 17 123)See item 42 STEP 18 Approach #2 124)See item 32 125)Scenario: Building Type: Office Industrial 126)See item 34 127)See item 50 128)See item 36 129)See item 37 130)See item 38 131)See item 39 Table 1, STEP 18 132)See item 40 Table 2, STEP 18 133)See item 41 Tabl e 3, STEP 18 134)See item 42 Assumptions Approach #2 135)Assumptions of how much each CSI Division can be retrofitted are displayed in the following table by building type Division Weights Approach #2 136)Weighted values of each CSI Division are displayed in the following table by building type. Results 1 Approach #2 137)Tables for each region display number of jobs created for each worker category by each building type considered.

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A 98 Results 2 Approach #2 138)Table compares the Square Foot (SF ) cost of a new building to the cost of retrofitting a similar building for energy efficiency. STEP 10 18 Approach #3 Approach #3 is similar to Approach #2, however it allows the user to customize the labor and material split for each CSI Division line item. This split is performed after the percent to retrofit of each line item is selected and after the adjusted basis percentage for each CSI Division is calculated. Assumptions for Labor -Material Splits, Results 1 Approach #3, and Results 2 Approach #3 are provided in table format.

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99 Figure A 1. STEP 1

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100 Figure A 2. STEP 2

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101 Figure A 3. STEP 3

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102 Figure A -3 STEP 3, continued

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103 Figure A -3 STEP 3, continued

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104 Figure A -3 STEP 3, continued

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105 Figure A -4 STEP 4

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106 Figure A -5 TABLE 1, STEP 4

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107 Figure A -5 TABLE 1, STEP 4 continued

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108 Figure A -5 TABLE 1, STEP 4 continued

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109 Figure A -6 TABLE 2, STEP 4

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110 Figure A -6 TABLE 2, STEP 4 continued

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111 Figure A -6 TABLE 2, STEP 4 continued

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112 Figure A -6 TABLE 2, STEP 4 continued

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113 Figure A -6 TABLE 2, STEP 4 continued

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114 Figure A 6. TABLE 2, STEP 4 continued

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115 Figure A 7. STEP 5

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116 Figure A -7 STEP 5, continued

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117 Figure A -7 STEP 5 continued

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118 Figure A -7 STEP 5 continued

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119 Figure A-7 STEP 5 continued

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120 Figure A-7 STEP 5 continued

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121 Figure A-7 STEP 5 continued

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122 Figure A -7 STEP 5 continued

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123 Figure A-7 STEP 5 continued

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124 Figure A-7 STEP 5 continued

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125 Figure A7. STEP 5 continued

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126 Figure A-7 STEP 5 continued

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127 Figure A-7 STEP 5 continued

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128 Figure A-7 STEP 5, continued

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129 Figure A-8. STEP 6

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130 Figure A-9. STEP 7

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131 Figure A10. STEP 8

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132 Figure A 11. STEP 9 Approach #1

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133 Figure A12. STEP 10 Approach #2 and #3

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134 Figure A13. STEP 10, Approach #2

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135 Figure A-1 3. STEP 10, Approach #2, continued

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136 Figure A -1 3. STEP 10, Approach #2, continued

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137 Figure A 14. TABLE 1, STEP 10 Approach #2

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138 Figure A 15. TABLE 2, STEP 10 Approach #2

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139 Figure A15. TABLE 2, STEP 10, Approach #2, continued

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140 Figure A16. TABLE 3, STEP 10 Approach #2 and #3

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141 Figure A16. TABLE 3, STEP 10, Approach #2 and #3, continued

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142 Figure A16. TABLE 3, STEP 10, Approach #2 and #3, continued

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143 Figure A17. STEP 11 Approach #2 and #3

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144 Figure A18. STEP 11, Approach #2

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145 Figure A18. STEP 11, Approach #2, continued

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146 Figure A -1 8. STEP 11 Approach #2, continued

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147 Figure A -1 9. T ABLE 1, STEP 11 Approach #2

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148 Figure A -2 0. TABLE 2, STEP 11 Approach #2

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149 Figure A 20. TABLE 2, STEP 11 Approach #2, continued

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150 Figure A -21 TABLE 3, STEP 11 Approach #2 and #3

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151 Figure A 21. TABLE 3, STEP 11 Approach #2 and #3, continued

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152 Figure A 21. TABLE 3, STEP 11 Approach #2 and #3, continued

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153 Figure A 22. STEP 12 Approach #2 and #3

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154 Figure A 23. STEP 12 Approach #2

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155 Figure A 23. STEP 12 Approach #2, continued

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156 Figure A 23. STEP 12, Approach #2, continued

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157 Figure A24. TABLE 1, STEP 12 Approach #2

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158 Figure A 25. TABLE 2, STEP 12 Approach #2

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159 Figure A 25. TABLE 2, STEP 12 Approach #2, continued

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160 Figure A 26. TABLE 3, STEP 12 Approach #2 and #3

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161 Figure A 26. TABLE 3, STEP 1 2, Approach #2 and #3, continued

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162 Figure A 26. TABLE 3, STEP 12 Approach #2 and #3, continued

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163 Figure A27. STEP 13 Approach #2 and #3

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164 Figure A 28. STEP 13 Approach #2

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165 Figure A 28. STEP 13 Approach #2, continued

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166 Figure A -2 8. STEP 13 Approach #2, continued

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167 Figure A 29. TABLE 1, STEP 13 Approach #2

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168 Figure A -3 0. TABLE 2, STEP 13 Approach #2

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169 Figure A 30. TABLE 2, STEP 13 Approach #2, continued

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170 Figure A 31. TABLE 3, STEP 13 Approach #2 and #3

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171 Figure A -31 TABLE 3, STEP 13 Approach #2 and #3, continued

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172 Figure A 31. TABLE 3, STEP 13 Approach #2 and #3, continued

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173 Figure A 32. STEP 14 Approach #2 and #3

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174 Figure A 33. STEP 14 Approach #2

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175 Figure A 33. STEP 14, Approach #2, continued

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176 Figure A 33. STEP 14, Approach #2, continued

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17 7 Figure A 34. TABLE 1, STEP 14 Approach #2

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178 Figure A 35. TABLE 2, STEP 14 Approach #2

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179 Figure A 35. TABLE 2, STEP 14, Approach #2, continued

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180 Figure A 36. TABLE 3, STEP 14 Approach #2 and #3

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181 Figure A -36 TABLE 3, STEP 14 Approach #2 and #3, continued

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182 Figure A 36. TABLE 3, STEP 14, Approach #2 and #3, continued

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183 Figure A 37. STEP 15 Approach #2 and #3

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184 Figure A -38 STEP 15, Approach #2

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185 Figure A -38 STEP 15, Approach #2, continued

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186 Figure A 38. STEP 15, Approach #2, continued

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187 Figure A 39. TABLE 1, STEP 15 Approach #2

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188 Figure A-40 TABLE 2, STEP 15 Approach #2

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189 Figure A -40 TABLE 2, STEP 15 Approach #2, continued

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190 Figure A -41 TABLE 3, STEP 15 Approach #2 and #3

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191 Figure A -41 TABLE 3, STEP 15 Approach #2 and #3, continued

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192 Figure A -41 TABLE 3, STEP 15 Approach #2 and #3, continued

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193 Figure A -42 STEP 16 Approach #2 and #3

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194 Figure A 43. STEP 16 Approach #2

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195 Figure A -43 STEP 16 Approach #2, continued

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196 Figure A -43 STEP 16 Approach #2, continued

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197 Figure A -44 TABLE 1, STEP 16 Approach #2

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198 Figure A -45 TABLE 2, STEP 16 Approach #2

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199 Figure A -45 TABLE 2, STEP 16 Approach #2, continued

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200 Figure A -46 TABLE 3, STEP 16 Approach #2 and #3

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201 Figure A -46 TABLE 3, STEP 16 Approach #2 and #3, continued

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202 Figure A -46 TABLE 3, STEP 16 Approach #2 and #3, continued

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203 Figure A -47 STEP 17 Approach #2 and #3

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204 Figure A 48. STEP 17 Approach #2

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205 Figure A 48. STEP 17 Approach #2, continued

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206 Figure A 48. STEP 17 Approach #2, continued

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207 Figure A 49. TABLE 1, STEP 17 Approach #2

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208 Figure A -50 TABLE 2, STEP 17 Approach #2

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209 Figure A -50 TABLE 2, STEP 17 Approach #2, continued

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210 Figure A -51 TABLE 3, STEP 17 Approach #2 and #3

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211 Figure A -51 TABLE 3, STEP 17 Approach #2 and #3, continued

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212 Figure A-51 TABLE 3, STEP 17 Approach #2 and #3, continued

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213 Figure A -52 STEP 18 Approach #2 and #3

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214 Figure A -53 STEP 18 Approach #2

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215 Figure A -53 STEP 18 Approach #2, continued

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216 Figure A -53 STEP 18 Approach #2, continued

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217 Figure A -54 TABLE 1, STEP 18 Approach #2

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218 Figure A -55 TABLE 2, STEP 18 Approach #2

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219 Figure A -55 TABLE 2, STEP 18 Approach #2, continued

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220 Figure A -56 TABLE 3, STEP 18 Approach #2 and #3

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221 Figure A -56 TABLE 3, STEP 18, Approach #2 and #3, continued

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222 Figure A -56 TABLE 3, STEP 18, Approach #2 and #3, continued

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223 Figure A -57 ASSUMPTIONS Approach #2

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224 Figure A 58. DIVISION WEIGHTS Approach #2

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225 Figure A 59. RESULTS 1 Approach #2

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226 Figure A 59. RESULTS 1 Approach #2 continued

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227 Figure A -60 RESULTS 2 Approach #2

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228 Figure A -61 STEP 10, Approach #3

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229 Figure A -61 STEP 10, Approach #3, continued

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230 Figure A -61 STEP 10, Approach #3, continued

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231 Figure A -61 STEP 10, Approach # 3 continued

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232 Figure A -62 STEP 11, Approach #3

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233 Figure A -62 STEP 11, Approach #3, continued

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234 Figure A -62 STEP 11, Approach #3, continued

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235 Figure A -62 STEP 11, Approach #3, continued

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236 Figure A -63 STEP 12, Approach #3

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237 Figure A -63 STEP 12, Approach #3, continued

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238 Figure A-63 STEP 12, Approach #3, continued

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239 Figure A -63 STEP 12, Approach #3, continued

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240 Figure A -64 STEP 1 3 Approach #3

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241 Figure A -64 STEP 13 Approach #3, continued

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242 Figure A -64 STEP 13, Approach #3, continued

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243 Figure A -64 STEP 13, Approach #3, continued

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244 Figure A -65 STEP 14, Approach #3

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245 Figure A -65 STEP 14, Approach #3, continued

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246 Figure A -65 STEP 14, Approach #3, continued

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247 Figure A -65 STEP 14, Approach #3, continued

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248 Figure A -66 STEP 15, Approach #3

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249 Figure A-66 STEP 15, Approach #3, continued

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250 Figure A -66 STEP 15, Approach #3, continued

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251 Figure A -66 STEP 15, Approach #3, continued

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252 Figure A -67 STEP 16, Approach #3

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253 Figure A -67 STEP 16, Approach #3, continued

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254 Figure A -67 STEP 16, Approach #3, continued

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255 Figure A -67 STEP 16, Approach #3, continued

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256 Figure A 68. STEP 17, Approach #3

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257 Figure A 68. STEP 17, Approach #3, continued

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258 Figure A 68. STEP 17, Approach #3, continued

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259 Figure A 68. STEP 17, Approach #3, continued

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260 Figure A 69. STEP 18, Approach #3

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261 Figure A 69. STEP 18, Approach #3, continued

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262 Figu re A 69. STEP 18, Approach #3, continued

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263 Figure A 69. STEP 18, Approach #3, continued

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264 Figure A -70 Assumptions: Labor -Material Split, Approach #3

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265 Figure A -70 Assumptions: Labor -Material Split, Approach #3, continued

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266 Figure A -71 Results 1 Approach #3

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267 Figure A -71 Results 1 Approach #3, continued

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268 Figure A -71 Results 1 Approach #3, continued

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269 Figure A -72 Results 2 Approach #3

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270 APPENDIX B INPUT TABLES AND RES ULTS T able B-1. National Averages Used in Base Case

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271 Table B-2. B ase Case Variable Adjusted to Southeast Region

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272 T able B-3. B ase Case Variable Adjusted to Northeast Region

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273 Table B-4. B ase Case Variable Adjusted to Midwest Region

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274 Table B-5. B ase Case Variable Adjusted to Northwest Region

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275 Table B-6. B ase Case Variable Adjusted to Southwest Region

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276 T able B-7. National Average Wage Rates for Energy Conservation Contractors

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277 T able B-8. National Average Jobs Created for $1 Million Investment in Energy C onservation

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278 T able B-9 Southeast Region Jobs Created for $1 Million Investment in Energy Conservation

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279 Table B -10 Southwest Region Jobs Created for $1 Million Investment in Energy Conservation

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280 Table B -11 Northwest Region Jobs Created for $1 Million Investment in Energy Conservation

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281 Table B -12 Midwest Region Jobs Created for $1 Million Investment in Energy Conservation

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282 Table B -13 North east Region Jobs Created for $1 Million Investment in Energy Conservation Table B -14 Adjustment Factors for Regions versus National

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283 Table B -15 National Benefits for Various Wage Rates

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284 Table B -16 Sensitivity of Number of Installation Phase Jobs Created to Changes in Benefits by Region (Based on National Average of All Wages) Table B -17 Sensitivity of Jobs Created to Callback, Warranty Profit, and Overhead Assumptions

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285 Table B -18 Sensitivity of Jobs Created to Project Markup, Southeast

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286 Table B -19 Sensitivity of Jobs Created to Project Markup, National Average

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287 Table B -20 Square Foot (S.F.) Construction Estimate of a Residential Single Family Building

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288 Table B -21 Squar e Foot (S.F.) Construction Estimate of a Residential Multi Family Building

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289 Table B -22 Square Foot (S.F.) Construction Estimate of a Residential Institutional Building

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290 Table B -23 Square Foot (S.F.) Construction Estimate of a Retail Building

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291 Table B -24 Square Foot (S.F.) Construction Estimate of an Office Low Rise Building

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292 Table B -25 Square Foot (S.F.) Construction Estimate of an Office High Rise Building

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293 Table B -26 Square Foot (S.F.) Construction Estimate of a School Building

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294 Table B -27 Square Foot (S.F.) Construction Estimate of a Health Care Building

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295 Table B -28 Square Foot (S.F.) Construction Estimate of an Industrial Building

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296 Table B -29 Variables/Assumptions for Approach #2 Percent of a Trades Value by Building Type Table B -30 Division Weights for Approach #2 Per Building Type and CSI Division

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297 Table B -31 National Base Case, Approach #2 Per Building Type, Jobs Created for $1 Mil lion Investment in Energy C onservation

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298 Table B -32 Northeast Region, Approach #2 Per Building Type, Jobs Created for $1 Mil lion Investment in Energy C onservation

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299 Table B -33 Southeast Region, Approach #2 Per Building Type, Jobs Created for $1 Mil lion Investment in Energy C onservation

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300 Table B -34 Midwest Region, Approach #2 Per Building Type, Jobs Created for $1 Mil lion Investment in Energy C onservation

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301 Table B -35 Northwest Region, Approach #2 Per Building Type, Jobs Created for $1 Mil lion Investment in Energy C onservation

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302 Table B -36 Southwest Region, Approach #2 Per Building Type, Jobs Created for $1 Mil lion Investment in Energy C onservation

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303 Table B -37 Square Foot (S.F.) Cost to Retrofit for Energy Conservation Compared to New Building Cost by Approach #2 Per Type of Building

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304 LIST OF REFERENCES Agency for Workf orce Innovation (AWI), State of Florida. (2009). LAUS Frequently Asked Questions from MyFlorida.com. < http://www.labormarketinfo.com/laus/faq.htm > (Oct. 11, 2009) Berry, L., Brown, M., Kenney, L. (1997). Progress Report of the National Weatherization Assistance Program ORNL/CON 450. Published online by DOE's Weatherization Assistance Program, Oak Ridge National Laboratory; 82 pp. < http://www.eere.energy.gov/weatherization/pdfs/con450.pdf > (Oct. 27, 2009) Bezdek, R.H., and Wendling, R.M. (2005). Jobs Creation in the Environmental Industry in Connecticut and the United States For the Jobs and Environment Initiative. < http://www.misi -net.com/publications/ct -final -report.pdf > (Oct 27, 2009) Blakely, E.J. (1989). Planning Local Economic Development Newbury Park, CA: Sage. Current topic: Dudley Street Initiative. (1997, April). Planning, pp. 6-7. Brund tland, G. (ed.) (1987) "Our common future: The World Commission on Environment and Development", Oxford, Oxford University Press. Bureau of Labor Statisti cs (BLS), Department of Labor (DOL). (2001). Employer Costs for Employee Compensation March 2001, Table 1. USDL: 01-194, June 29, 2001. < www.bls.gov/ncs/ect/ > (Dec. 7, 2007) Campbell, S. (2003). Green Cities, Growing Cities, Just Cities? Urban Planning and the Contradictions of Sustainable Development. In: Campbell, S. & Fainstein, S. (Eds.), Readings in Planning Theory (2nd Ed.), 435458. Cambridge, MA: Blackwell Publishers. Decanio, S. J. (1997). The Economics of Climate Change, Redefining Progress. San Fransico, CA. < www.rprogress.org> (Oct. 24, 2009) Design and Construction Resources (DCR) (2006). ENR Square Foot Costbook 2007 Edition, USA EIA, State Energy Data. (2 005). Consumption, February 2008, Tables 812, p. 18-22 for 19802005 EIA, Annual Energy Outlook ( 2008 ). Table A2, March p. 117 -119 for 2006 2030 and Table A17, p. 143144 for nonmarketed renewable energy. Elkington, J. (1994) "Towards the sustainable corporation: Winwin win business strategies for sustainable development." California Management Review 36, no. 2: 90100. Elkington, J. (2004). Enter the Triple Bottom Line. In A. Henriques, & J. Richardson (Eds.), The Triple Bott om Line: Does It All Add Up? London: Earthscan.

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305 Fei Liu, H and Emrath, P ( 2008). The Direct Impact of Home Building and Remodeling on the U.S.Economy, National Association of Home Builders, October 7 Gillingham, K., Newell, R., and Palmer, K. (2004) Retrospective Examination of Demand -Side Energy Efficiency Policies. Resources for the Future (RFF). June 2004, revised September 2004. < http://www.rff.org/rff/Documents/RFF-DP 0419REV.pdf > (Oct. 27, 2009) Goldberg, M., Sinclair, K., and Milligan, M. (2004). Job and Economic Development Impact Model (JEDI): A User Friendly Tool to Calculate Economic Impacts from Wind Projects (NREL Publication No. NREL/CP -500 -35953) March. < http://www.eere.energy.gov/windandhydro/windpoweringamerica/pdfs/35953_jedi.pdf > (Oct. 27, 2009) Haroutunian, A. (2007). Glendale Water & Power4th in the Stat e in Energy Savings. < http://www.glendalewaterandpower.com/news.aspx?item=27 > (Sept. 29, 2009). Hawken, P. (1993). The Ecology of Commerce, A Decl aration of Sustainability. p. 178-179, Collins Business, New York, New York, USA. Hawken, P., Lovins, A., and Lovins, L.H. (1999). Natural Capitalsim, Creating the Next Industrial Revolution., Little, Brown and Company, New York, New York, USA. Jeeninga H., Weber, C., Menp, I., Garcia, F.R., Wade, J., Gibson, C., and Wiltshire V. (1999). Employment Impacts of Energy Conservation Schemes in the Residential Sector Contribution to the SAVE Employment project ECN -C-99 082, October, The Netherlands Kaiser, M., Olatubi W., and Pulsipher A. ( 2004 ). The Projected Impact of Energy Conservation Legislation: The Louisiana Fund. King, C., Barry, R., Jenkins, T., Wiltshire, V., and Jones, E. (1998). Green Job Creation in the UK A National Report submitted as part of the Awareness Campaign for Green Job Creation in the European Union. Supported by European Commission DGXI Unit A2 Project no:306/68/24.4.96, June. < http://www.fo e.co.uk/resource/reports/green_job_creation.pdf > (Oct. 27, 2009) Krumholz, N. (2003). Equitable Approaches to Local Economic Development. In: Campbell, S. & Fainstein, S. (Eds.), Readings in Planning Theory (2nd Ed.), 224 -236. Cambridge, MA: Blackwel l Publishers. London Borough of Barking and Dagenham (LBBD). (2009). Housing Energy Efficienc y. < http://www.barking dagenham.gov.uk/6 -living/housing/hs -energy efficiency.html > (Oct. 24, 2009)

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306 Marlin, M.R. (1990). The effectiveness of economic development subsidies. Economic Development Quarterly, 4, 1522. Mitra, A. (2003). A Tool for Measuring Pr ogress: The Growing Popularity of Sustainable Indicators in the United States. National Civic Review Fall 2003, 92, No. 3. Munasinghe, M. (1992). Environmental Economics and Sustainable Development Paper presented at the UN Earth Summit, Rio de Janeiro Environment Paper No.3, World Bank, Wash. DC, USA. Nayak, N. ( 2005). Redirecting Floridas Energy: The Economic and Consumer Benefits of Clean Energy Policies Florida PIRG Educational Fund. February. < http://floridapirg.org/reports/redirectingenergy.pdf > (Aug. 9, 2007) ORNL (2002). Non -Energy Benefits from the Weatherization Assistance Program -A Summary of Findings from Recent Literature Oak Ridge National Laboratory; Oak Ridge, TN; ORNL/CON -484. < http://weatherization.ornl.gov/download_files/Con-484 april02.pdf > (Oct. 27, 2009) PayScale, Inc. (2007) Hourly Rate Report by Job. < www.payscale.com> (Dec. 3, 2007) Reed Construction Data (RCD). (2006 a ). RS Means Light Commercial Cost Data 26th Annual Edition. Reed Construction Data (RCD). (2006 b ). RS Means Residential Cost Data 26th Annual Edition. The Statewide Low -Income Collaborative Evaluation (SLICE) of Iowa. (1994). An Evaluation of Iowa's Low -Income Weatherization Efforts, prepared by Wisconsin Energy Conservation Corporation, August 8. U.S. Department of Energy (DOE). (1996). The Jobs Connection: Energy Use and Local Economic Development Produced for the National Renewable Energy Laboratory, DOE/GO 10096342, November. U.S. Department of Energy ( DOE ). (2007). Improving the Economies of Low Income Communities < http://www.eere.energy.gov/weatherization/ > (Oct. 27, 2009) U.S. Department of Labor (DOL). (2009). Frequently Asked Questions. < http://webapps.dol.gov/dolfaq/go dol faq.asp?faqid=111&faqsub=Employment+%2F+Unemployment&faqtop=Statistics&topic id=6> (Oct. 25, 2009) U.S. Green Building Council (USGBC) (2006). New Construct ion and Major Renovation, Version 2.2, Reference Guide, Second Edition September 2006, USA.

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307 U.S. Office of Management and Budget (OMB). (2009). ExpectMore.gov: Detailed Information on the Energy Conservation Assessment. Website Updated: Jan. 9, 2009. < http://www.whitehouse.gov/omb/expectmore/detail/10000062.2003.html > (Oct. 24, 2009) Weatherization Assistance Program Technical Assistance Center (WAPTAC). (2009). Weatheriza tion Assistance Program Overview. Website Updated: July 7, 2009. < http://www.waptac.org/sp.asp?mc=what_overview_program > (Oct. 11, 2009) Willard, B (2002). The Sustainability Advantage, Seven Business Case Benefits of a Triple Bottom Line., New Society Publishers, Gabriola Island, British Columbia, Canada. Winstead, D. (2007). Statement of David L. Winstead, Commissioner, Public Buildings Service, General Services Administrat ion, before the Subcommittee on Economic Development, Public Buildings, and Emergency Management Committee on Transportation and Infrastructure, U.S. House of Representatives, July 19, 2007. Reproduced 930 -08 online by U.S. General Services Administration (GSA). < http://www.gsa.gov/Portal/gsa/ep/contentView.do?pageTypeId=8199&channelId= 18801&P=S&contentId=23349&contentT ype=GSA_BASIC > (Oct. 24, 2009) The World Bank Group (WBG). (2009). What is Local Economic Development? < http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTURBANDEVELOPMENT/ EXTLED/0,,contentMDK:20185186~menuPK:399161~pagePK:148956~piPK:216618~t heSitePK:341139,00.html > (Oct. 27, 2009).

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308 BIOGRAPHICAL SKETCH Richard is a c ombined Master of Science and Doctor of Philosophy student in the M.E. Rinker, Sr. School of Building Construction at the University of Florida. His research interests include sustainable construction, building rating systems, effects of building rating s ystems on commercial real estate valuation, and construction job creation due to energy efficiency retrofits. He is the Instructor for the freshman course in Construction Materials at University of Florida and Santa Fe College, and is the Graduate Teaching Assistant for the senior course in Leadership and Management in the M.E. Rinker Sr. School of Building Construction. Richard holds a Master of Arts degree in Real Estate and Urban Analysis and b achelors degree from U niversity of F lorida Profess ional work experience includes eight years of commercial construction experience managing hospital, school, jail and courthouse projects, and two years of residential construction experience as the owner of a small contracting business. Currently, Richard teaches courses on green building and Leadership in Energy and Environmental D esign (LEED) to building industry professionals throughout Florida. Richard is a licensed Certified General Contractor and Real Estate Sales Person. Additionally, he is a U. S. G reen Building C ouncil (USGBC) LEED Accredited Professional (LEED AP).