Energy-Efficiency Companies Falter as COVID-19 Keeps Them Out of Customers’ Homes

Furloughs and layoffs are becoming increasingly common across sector, with some providers laying off 50% of employees — or more
Credit: Orna Wachman via Pixabay
COVID-19

The state’s program to promote initiatives to reduce energy use at home is grinding to a halt as companies involved lay off and furlough workers because they cannot access residences due to concerns about COVID-19.

The issue has emerged after a decision by the New Jersey Board of Public Utilities last month in which it ordered utilities to end any in-home or business visits unless a situation involved immediate risk to health and safety, a step precipitated by the outbreak of the coronavirus.

“Everything has basically stopped,’’ said Lloyd Kass, a vice president of Lime Energy, a Newark firm that does a lot of energy-efficiency work with New Jersey’s electric utilities and has furloughed two-thirds of its 300 employees.

Balancing safety and energy efficiency

The shutdown comes as the state pursues two conflicting policies: ramping up energy efficiency in homes and businesses and protecting public health by limiting and shutting down public interaction due to the risks of COVID-19.

New Jersey is not the only state wrestling with the dilemma. “This is a huge issue because they can’t get into buildings and homes to do their work,’’ said Michael Timberlake of E2 (Environmental Entrepreneurs), a business group.

“There is limited access for these firms to get into homes,’’ agreed Eric Ford, executive director of the New Jersey Energy Coalition.

Kass said nearly all of the company’s business clients have told them to shut down work. “If the shutdown continues, we will be forced to lay off or furlough much of our workforce,’’ he said.

In a statement, the New Jersey Board of Public Utilities said it was concerned about delays, but more importantly about the possibility of layoffs.

“The COVID-19 pandemic is obviously an extraordinary circumstance, and while some work may not continue in the short term, it is our expectation that energy efficiency will move forward in the long term, the agency said.

The board did not address the question of whether they are going to address concerns of energy-efficiency firms to deal with the crisis.

The problem is also impacting energy-efficiency programs in Connecticut and New York, where officials have been more aggressive in trying to rectify the problems, or at the very least make changes in their programs to be able to jump-start energy efficiency programs when the health crisis ends.

Erin Cosgrove, policy counsel for the Energy Efficiency Alliance of New Jersey, said her organization is trying to set up a meeting with the BPU to address the issue. “We are worried that the industry might not exist if nothing is done,’’ she said.

Deep cuts to staff

In talks with her members, Cosgrove said she has heard reports of some companies furloughing or cutting salary for 80% of their staff. A few companies have laid off half of their staff and some smaller companies have had to lay off all of their staff, Cosgrove said.

Smaller companies and projects are particularly hurting, according to Cosgrove. That may be because larger projects are able to shift more of the work offsite, spending time on project design and development, she said.

The turmoil occurs as the BPU is trying to develop a new energy-efficiency program to comply with a nearly two-year-old law to force gas and electric utilities to ramp up energy savings for their customers. The proposal has received mixed reviews from the sector.

With increased social-distancing requirements, as families isolate themselves, energy-efficiency work is swiftly dropping, according to the American Council for an Energy Efficient-Economy.

“Many contractors have had to lay off staff. We have no way of knowing what the long-term ramifications will be or if we’ll have to practice social distancing on an intermittent basis as some health experts suggest,’’ said Tom Churchelow, president and CEO of the New Jersey Utilities Association.

New Jersey is expecting to adopt a new program to promote energy efficiency sometime this May, according to the BPU staff. It has long been considered a key component of the Murphy administration’s plan to achieve 100% clean energy by 2050. It would require electric utilities to cut energy use by their customers by 2% a year and gas customers by 0.75% annually.