U.S. Secretary of Energy Jennifer M. Granholm
U.S. Secretary of Energy Jennifer M. Granholm. Source: U.S. Department of Energy on Flickr.

U.S. DOE Announces Additional $63 Million to Speed Up Heat Pump Production

The funding will support the construction and expansion of heat pump and component manufacturing facilities across the U.S.

The U.S. Department of Energy (DOE) has announced an additional $63 million (€58.5 million) in funding to accelerate domestic production of residential heat pumps, heat pump water heaters and related systems and components.

The news comes on the heels of a November 2023 announcement from the DOE that $169 million (€157.1 million) was allocated to nine projects across the country to ramp up domestic heat pump production. Like with the $169 million in funding, no mention of natural refrigerants or refrigerant types was made in the DOE’s most recent announcement.

Both tranches of funding were provided by the 2022 Inflation Reduction Act (IRA), with the Biden administration able to funnel the funding toward heat pump production via the Defense Production Act (DPA). The DPA enables the president to direct domestic production in the name of national defense, with the Biden administration citing climate change as its basis for employing the DPA.

“As part of the Biden-Harris Administration’s commitment to address the climate crisis, these Defense Production Act dollars will further amp up domestic heat pump manufacturing to meet increasing consumer excitement, reduce emissions and create clean energy jobs across the country,” said U.S. Secretary of Energy Jennifer Granholm.

According to the DOE’s Amendment 00002 of the Funding Opportunity Announcement, the financing will support U.S.-based manufacturers in boosting their production capacity through the construction of new commercial-scale facilities or the expansion/retrofitting of existing facilities.

“President Biden’s Investing in America agenda is working – it’s not only making heating and cooling technology more accessible, but it’s also growing high-quality job options for workers in underserved communities and helping supercharge America’s clean energy economy,” said Granholm.

“These Defense Production Act dollars will further amp up domestic heat pump manufacturing to meet increasing consumer excitement, reduce emissions and create clean energy jobs across the country.”

U.S. Secretary of Energy Jennifer M. Granholm

To be considered for funding, companies must submit a concept paper by 5 pm EDT on March 15, with full applications due by 5 pm EDT on April 29. The DOE is expected to announce its selections in July.

Applications will be evaluated against several criteria, including technical innovation and impact, financial viability and community benefits. Under the technology impact criterion,  the use of low-GWP refrigerants is mentioned.

The DOE will be hosting a webinar on February 21 at 2 pm EST for interested parties.

In addition to providing funding to manufacturers, the Biden administration has also made tax credits available to consumers via the IRA to offset the cost of purchasing heat pumps. A maximum tax credit of $2,000 (€1,858) is available for heat pump water heaters and for air-source heat pumps.

State action

The DOE’s announcement dovetails with a recent announcement by nine states to “significantly expand” heat pump sales by 2030. The nine states signed a memorandum of understanding (MOU) committing to a goal of having heat pumps account for 65% of residential heating, cooling and hot water equipment sales by 2030, with that goal rising to 90% by 2040.

California, Colorado, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon and Rhode Island all signed the MOU, which is aimed at lowering building emissions. Those states are all members of the U.S. Climate Alliance, a coalition of 25 state and territory governments, which in September 2023 committed to installing 20 million heat pumps in its member states and territories.

Data collected by the Air-Conditioning, Heating and Refrigeration Institute show that 3.6 million heat pumps were sold in the United States in 2023.

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