Dive Brief:
- The U.S. Department of Energy is allocating $169 million for nine projects to expedite the manufacturing of electric heat pumps across 15 sites in 13 states.
- These projects, supported by the Defense Production Act and funded by the Inflation Reduction Act, will help collectively generate over 1,700 high-quality, well-paying manufacturing jobs while improving air quality, facilitating energy savings and reducing energy resilience on “foreign adversaries,” the DOE said in a Nov. 17 news release.
- The projects will spur manufacturing of air-to-air, air-to-water and geothermal heat pumps as well as critical heat pump components like compressors and refrigerants, DOE said. It expects to make another round of DPA investments in early 2024 to secure domestic manufacturing supply chains.
Dive Insight:
Heating and cooling critical facilities such as offices, schools, homes, hospitals and military bases account for over 35% of total U.S. energy consumption, the DOE said. Critical to reducing reliance on fossil fuels, heat pumps reduce greenhouse gas emissions by up to 50%, compared with gas boilers, the release stated.
The nine projects mark the first DOE awards since President Joe Biden invoked the Defense Production Act. In this case, the administration hopes that utilizing the DPA will boost the domestic production of electric heat pumps and other clean energy technologies, including solar power, electric grid components, insulation and clean hydrogen fuel cells. As facilities managers look to improve the performance of their existing buildings, the DOE’s investment “will drive down heat pump costs by increasing the supply of electric heat pumps and heat pump components,” a DOE spokesperson told Facilities Dive.
Additional heat pump savings are available through IRA Energy Efficient Home Improvement 25C tax credits, which help consumers afford heat pumps, according to the DOE.
The manufacturers receiving funding include Armstrong International for producing industrial heat pumps in Three Rivers, Michigan; Honeywell International for refrigerants in Geismar, Louisiana; Ice Air for cold climate and geothermal heat pumps in Spartanburg, South Carolina; and Mitsubishi Electric for compressors in Kentucky.
The Mitsubishi Electric US project, which involves a federal cost share of $50 million, plans to manufacture variable capacity compressors for high-efficiency, all-climate heat pump systems and provide a domestic supply source for critical heat pump components that have mostly been manufactured in Asia, according to a selectees’ project summary for the DPA program.
Honeywell International, slated to receive nearly $14.8 million in funding, will channel the funding toward expanding its production of refrigerants. The company hopes to boost that production by 11%, according to an email from a Honeywell spokesperson.
The remaining $104.2 million will be allocated among the other seven projects.
“Getting more American-made electric heat pumps on the market will help families and businesses save money with efficient heating and cooling technology,” U.S. Secretary of Energy Jennifer Granholm said in the release.
The program aligns with the Biden administration’s Justice40 initiative, which seeks to ensure that 40% of the overall benefits from certain federal investments in climate, clean energy and other covered investments reach communities grappling with underinvestment and pollution, DOE said.
