New study confirms job creation potential of smart grids in U.S.


Washington, DC, U.S.A. — (METERING.COM) — January 29, 2009 – A $50 billion additional investment in the smart grid over 5 years, e.g. $10 billion per year, could create approximately 239,000 new or retained jobs for each of the 5 years on average, a new study on the job creation potential of smart grids in the United States has found.

Of these approximately 179,000 jobs would be direct, indirect and induced jobs resulting from spending on domestic goods and services by utilities, and 60,000 jobs would be new jobs resulting as related industries grow to take advantage of the new technology. Moreover, approximately 140,500 of these jobs would be created in small businesses.

And if the investment were doubled to $100 million over 5 years, then approximately 477,000 U.S. jobs would be created or retained for each of the 5 years on average. However, a federal mandate to states to order utilities to implement smart metering and construct a smart grid, and to direct state regulators to allow utilities to receive cost recovery for their investment, would create approximately 91,000 new jobs.

The study, “The Digital Road to Recovery: A Stimulus Plan to Create Jobs, Boost Productivity and Revitalize America,” was prepared by the Information Technology & Innovation Foundation (ITIF) for the Obama transition team to identify the employment impact of investments in the smart grid as well as two other IT infrastructure projects, broadband networks and health IT.

The study confirms the job creation potential of smart grids. A recent study by KEMA for the GridWise Alliance found that a disbursement of $16 billion in smart grid incentives over the next four years could create up to 280,000 new jobs in that period, with more than half of these being created during the coming year.

Input to the ITIF study was a 5-year projection of baseline and subsidy level spending on domestic goods and services by utilities provided by Energy Insights. Investment on grid construction involves adding new pipes and wires, and includes design, construction, equipment, and labor. The spending also includes upgrades to the transmission and distribution lines and repairs due to aging and weather. Hardware expenditures include smart meters, substation automation equipment, networking equipment and servers. Software spending includes items such as meter system interfaces, network automation and control, analytics, and web-enabled consumer applications. Expenditures on IT services consist of spending on systems integrating, customer equipment installation and other IT services.

Among the “network effects” the smart grid will enable are for example, new appliances that use energy both efficiently and more intelligently. These in turn also create an ecosystem of related products and services – for  example, home networking kits to connect smart appliances to the internet, software applications to interface with the appliances, and online services that take advantage of new digital information and wired appliances.

And the smart grid will enable new products and services that cannot be deployed without this infrastructure, from plug-in hybrid electric vehicles to energy storage solutions to home automation and commercial building intelligence. In addition, the smart grid will facilitate distributed generation and encourage the development of renewable energy sources, such as wind farms. Eventually, the smart grid will even create an energy marketplace where businesses and homeowners can sell energy back to the grid, enabling even more innovation. This will in turn spur consumer demand for products such as rooftop solar panels for their homes.

“Indeed, the smart grid will likely serve as the foundation for the growth of many new industries much like broadband is creating new markets in e-commerce, telehealth, and online banking,” says the report.