Economic development is a critical issue and tool for local political and economic leaders. At the same time, the effectiveness of traditional development tools have become diluted as increasing numbers of groups have expanded their efforts to attract new facilities, employers, and investment capital to their communities or to retain the existing firms. Despite the increase in competition for development opportunities, most communities continue to rely on the traditional development policies. While these policies can remain effective and essential to building diversified development portfolios, most community, economic, and political leaders have failed to incorporate one of their most significant and potentially potent economic development tools - energy and energy efficiency policies.

The paper discusses the opportunities for the creation of new local development-based energy efficiency policies. It also discusses the manners in which local energy efficiency-based development policies differ from 'traditional' energy efficiency programs in terms of scale, scope, and focus. It documents that energy efficiency policies do meet the job creation, income creation, and tax base improvement requirements to be considered development policies. It also includes a hypothetical comparison between traditional manufacturing and energy efficiency-based development policies. The analysis concludes with a discussion of some of the possible methods that communities could employ to implement energy efficiency-based local economic development.