Biden-Harris Administration Announces Nearly $85 Million to Accelerate Domestic Heat Pump Manufacturing
Funding from the Investing in America Agenda —Invoked by The President’s Use of the Defense Production Act—Would Boost U.S. Manufacturing, Create Clean Energy Jobs, and Lower Energy Bills for Households Across the Nation, While Protecting National Security
As part of the Biden-Harris Administration’s Investing in America agenda, the U.S. Department of Energy (DOE) today announced nearly $85 million across four heat pump manufacturers to accelerate the manufacturing of electric heat pumps, heat pump hot water heaters, and heat pump components at five factories in New York, Tennessee, Texas, and Rhode Island. The selected projects are the second round of awards from DOE’s authorization, invoked by President Biden using emergency authority on the basis of climate change, to utilize the Defense Production Act (DPA) to increase domestic production of five key clean energy technologies, including electric heat pumps. The projects, administered by DOE’s Office of Manufacturing and Energy Supply Chains (MESC), would collectively create over 500 high-quality, good-paying jobs, including 220 jobs in disadvantaged communities, supporting President Biden’s goals of spurring economic growth and maximizing the benefits of clean energy to all communities. In alignment with President Biden’s Justice40 Initiative and funded by the Inflation Reduction Act—the largest climate investment in U.S. history—selected projects will further the Administration's buildup of a clean energy economy, create high quality manufacturing jobs, help families and businesses save money on their energy bills, and bolster national security by reducing energy reliance on fossil fuels and foreign adversaries.
“Extreme weather events are harming our grid and serving as a primary driver of higher electricity bills, underscoring the need to increase access to energy efficient technologies,” said U.S. Secretary of Energy Jennifer M. Granholm. “The Biden-Harris Administration’s Investing in America agenda is manufacturing hundreds of thousands of energy-saving heat pumps here in the USA, helping American households and businesses keep money in their pockets all while strengthening our national security and creating good-paying jobs.”
"Under President Biden and Vice President Harris’s leadership, the United States is supercharging U.S. clean energy manufacturing, which is creating good-paying jobs, lowering families’ energy costs, and helping tackle the climate crisis, all while boosting our nation’s energy security,” said White House National Climate Advisor Ali Zaidi. “As communities across the country continue to face down the impacts of climate-fueled extreme weather events, investing in American-made heat pump manufacturing will help keep families safe and comfortable in their homes, schools, and businesses and cut their energy costs. Today's investments, leveraging the authorities in the Defense Production Act, harness the power of American innovation to jumpstart critical clean energy manufacturing capacity and to protect our families, our economy, and our planet.”
The DPA investments being announced today would increase American manufacturing of heat pump technologies, which provide efficient space heating and cooling and water heating for homes, schools, and commercial and industrial uses. The awards will also increase the number of compressors produced on U.S. soil, which are typically manufactured overseas in Europe and Asia, making it easier for domestic manufacturers to use these key components in American-made heat pumps. Together these investments will allow for U.S. manufacturing of an additional 155,000 residential heat pumps, 440,000 residential heat pump water heaters, 2,000 school heat pumps, and 20,000 large heat pump compressors each year.
Today’s DPA manufacturing investments complement the direct consumer savings that the Biden-Harris Administration is providing, with the Investing in America agenda making homeowners now eligible for up to a 30% federal tax credit on the total cost of buying and installing a heat pump, and providing states with funding for home energy rebate programs.
Heating and cooling buildings, homes, offices, schools, hospitals, military bases, and other critical facilities drive more than 35% of all U.S. energy consumption and contribute more than one third of greenhouse gas emissions. Heat pumps can efficiently provide heating and cooling and hot water for homes and businesses, especially when homes are well insulated. Electric heat pumps reduce greenhouse gas emissions by up to 50% compared to the most efficient condensing gas boilers today, and this percentage could grow to 75% by 2030. Heat pump water heaters can be two-to-three times more energy efficient than conventional electric water heaters, and on average, heat pumps can save homeowners between $300 to $1,500 annually depending on the current sources for heating and cooling. Additional savings are currently available through the Inflation Reduction Act Energy Efficient Tax Credit 25C tax credits to help consumers afford heat pumps. To learn more about savings and how heat pumps work, visit Pump Up Your Savings with Heat Pumps.
Learn more about the projects selected for award negotiations here.
 As the Department of Energy enters negotiations with selectees, the Department will require the creation of good-quality, high-paying jobs in these facilities aligned with commitments in the selectees’ community benefit agreements. This may include but is not limited to, providing wages in the top quintile, industry leading health insurance, retirement contributions, paid time off, supportive services such as family care and transportation, and the free and fair choice for workers to join a union.
Selection for award negotiations is not a commitment by DOE to issue an award or provide funding. Before funding is issued, DOE and the applicants will undergo a negotiation process, and DOE will complete environmental review. DOE may cancel negotiations and rescind the selection for any reason during that time.
Learn more about the MESC mission to strengthen and secure energy supply chains as the frontline of clean energy capital deployment.
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