DOE to Give $169 million to OEMs for Heat Pump Manufacturing

    Nov. 29, 2023
    Small but symbolic amount of cash will help Biden Administration shore up claims of progress on climate, jobs and the economy.


    NEW ORLEANS, LA — As part of the Biden Administration’s Investing in America agenda, the U.S. Department of Energy (DOE) on November 17 announced it would give $169 million to nine leading HVAC manufacturers for various projects intended to accelerate electric heat pump manufacturing at 15 sites across the country.

    The money, which is a small amount per company after it's split nine ways, is the initial payout under the DOE’s authorization, supported by President Biden using emergency authority in reaction to climate change*. It is being dispersed at various stages and authorized under the Defense Production Act (DPA) to increase domestic production of solar products, transformers and electric grid components (absolutely essential pieces to the puzzle), heat pumps, insulation and electrolyzers, fuel cells, and platinum group metals.   

    Climate change may be the intended target of this initiative, however the extra benefits it promises make for smart political strategy. Covered under President Biden’s "Justice40" initiative — a grab-bag of make-work projects intended to save the planet and funded by the Inflation Reduction Act, the largest climate investment in history (which many economists say is actually causing inflation) —the  heat pump-related projects are intended to help build a clean energy economy, create good-paying manufacturing jobs, improve air quality, help families and businesses save money on their energy bills (the average estimated savings will be $557 per year, a nice amount if realized) and bolster national security by reducing energy resilience on "foreign adversaries". DOE reports the projects will collectively create over 1,700 high-quality, good-paying jobs in disadvantaged communities (a small amount) in support of President Biden’s goals of spurring economic growth and maximizing the benefits of clean energy for all. Even if none or one of those objectives are met, his good intentions will look good in debates and on the campaign trail, and be heartily supported by fellow Democrats.

    “Getting more American-made electric heat pumps on the market will help families and businesses save money with efficient heating and cooling technology,” said U.S. Secretary of Energy Jennifer M. Granholm. “Thanks to President Biden’s Investing in America agenda, these investments will create thousands of high-quality, good-paying manufacturing jobs and strengthen America’s energy supply chain, while creating healthier indoor spaces through home-grown clean energy technologies.”

    DOE reports the projects will collectively create over 1,700 high-quality, good-paying jobs in disadvantaged communities (a small amount) in support of President Biden’s goals of spurring economic growth and maximizing the benefits of clean energy for all.

    “Today’s Defense Production Act funds for heat pump manufacturing show that President Biden is treating climate change as the crisis it is,” said John Podesta, who has managed to secure a post as senior advisor to the President for Clean Energy Innovation and Implementation. “These awards will grow domestic manufacturing, create good-paying jobs, and boost American competitiveness in industries of the future," Podesta said. 

    A key question related to expanding adoption of heat pumps is how the nation's various energy grids will be able to deliver more power for more heat pumps, and how realistically grids can be expanded across the country. The funds that will be used for developing transformers and grid components was therefore an important sector to receive funding.

    To further validate this initiative, the Department of Energy says heat pumps are critical to reducing the nation’s reliance on fossil fuels, bolstering national security, and boosting energy independence to strengthen national defense, lowering consumer energy costs, improving energy efficiency, and mitigating the climate crisis.  It says this portfolio of manufacturer designations will boost manufacturing of electric heat pumps (air-to-air, geothermal, and air-to-water) and key components (compressors and refrigerants) and will spark manufacturing in 13 states.

    According to the DOE, heating and cooling buildings, homes, offices, schools, hospitals, military bases, and other critical facilities makes up more than 35% of all U.S. energy consumption. Heat pumps efficiently provide comfortable temperatures for heating and cooling homes and businesses in all climates, especially when homes are well insulated, and can also provide more efficient water heating. When compared to gas boilers, heat pumps reduce greenhouse gas emissions by up to 50%. Electric heat pumps enable more American families and businesses to benefit from lower energy costs through American-made clean energy technologies, while supporting good jobs, reinvigorating American manufacturing, improving public health, tackling climate change. Additional savings are currently available through IRA Energy Efficient Tax Credit 25C tax credits to help consumers afford heat pumps. 

    The benefits of heat pumps in warmer climates have never been denied. Manufacturers say they have and will continue to develop heat pumps that will perform well in northern winters.

    Will heat pumps perform well in cold climates? Will the energy grid be expanded to handle the strain of more heat pumps? The next few years will prove interesting.

    DOE provided this link for those seeking more information on heat pump operation and savings:  Pump Up Your Savings with Heat Pumps.

    DOE did not provide the rationale behind the manufacturer selections. The nine manufacturers that are rceiving the heat pump awards and their areas of development are:  

    • Armstrong International, InThree Rivers, Michigan – industrial heat pumps.
    • Bard Manufacturing Company – Madison, Georgia – single package vertical unit air conditioning and heat pumps.
    • Copeland LP – Sidney, Ohio; Ava, Missouri; Lebanon, Missouri; and Cudahy, Wisconsin – compressors (heat pump component).
    • Honeywell International – in Geismar, Louisiana – refrigerant (heat pump component).
    • Hydro Temp Corporation – Pocahontas, Arkansas; and Albany, New York – geothermal heat pumps.
    • Ice Air, LLC – Spartanburg, South Carolina – cold climate heat pumps and geothermal heat pumps.
    • Mitsubishi Electric U.S. Inc. – Kentucky compressors (heat pump component).
    • Gradient – Michigan – easy-to-install room heat pumps.
    • York International Corporation – Wichita, Kansas; Waynesboro, Pennsylvania; and San Antonio, Texas – residential and commercial heat pumps.

    * Many reputable climate scientists continue to prove that climate change is not occurring - ed.