US Energy: Biden-Harris Administration Announces $250 Million Investment From Inflation Reduction Act For Domestic Heat Pump Manufacturing

The Biden-Harris Administration, through U.S. Department of Energy (DOE), today announced a joint Notice of Intent (NOI) and Request for Information (RFI) to determine how DOE could best leverage the Defense Production Act authority invoked by President Biden to accelerate domestic electric heat pump manufacturing. Rapidly increasing the U.S. manufacturing output and deployment of electric heat pumps is critical to achieving U.S. climate, energy savings and energy security goals. Input received will guide the Department’s decisions to maximize the $250 million Defense Production Act investment in heat pumps, funded through President Biden’s Inflation Reduction Act, to reduce the nation’s reliance on fossil fuels, strengthen national defense and energy security, lower consumer energy costs, improve home efficiency, and mitigate the climate crisis.

“Ending America’s overreliance on other nations to power our clean energy future requires decisive actions that prioritize our national security and economic prosperity—and that’s exactly why President Biden is empowering DOE to expand our use of high-tech heat pumps to save energy while manufacturing them right here in the U.S.,” said U.S. Secretary of Energy Jennifer M. Granholm. “These dollars are ready to invest in American-made clean energy technologies and our workforce to ensure lower energy costs and cleaner air and water for every American.”

Currently, the U.S. energy system is largely dependent on fossil fuels that remain susceptible to market volatilities. The national defense imperative to strengthen domestic clean energy manufacturing has become more urgent as Russia’s war on Ukraine and impacts of the COVID-19 pandemic disrupted global supply chains, increasing prices and underscoring the dangers of our overreliance on foreign adversaries. Increased use of electric heat pumps, particularly when replacing fuel oil and natural gas for air and water heating, will allow more American families and businesses to benefit from lower energy costs through American-made clean energy technologies.

Heat pumps offer an energy-efficient alternative to furnaces and air conditioners for all climates by using electricity to transfer heat from a cool space to a warm space, making the cool space cooler and the warm space warmer. Because heat pumps transfer heat rather than generate heat, this technology efficiently provides comfortable temperatures for heating and cooling homes and businesses.

DPA Investments for Heat Pump Technology

Last summer, the President announced new authority for DOE to utilize the Defense Production Act to ramp up production of five key clean energy technologies. In the months following the initial announcement, the Biden-Harris Administration has led engagement with stakeholders to determine how to maximize the impact of DPA funds. In October, DOE issued a RFI to determine how best to leverage DPA authority to accelerate domestic production and deployment of four technologies, including transformers and electric grid components; solar photovoltaics; insulation materials; and electrolyzers, platinum group metals, and fuel cells for clean hydrogen.

Congress appropriated $500 million for DPA investments through the Inflation Reduction Act, and, consistent with Congressional intent, the President determined that $250 million of that support heat pumps. DOE now seeks public feedback on the proposed funding approach for electric heat pump manufacturers regarding the application process, examples of eligible projects, criteria for qualification and selection and potential funding requirements. Input the Department receives will also address energy equity and accessibility, potential benefits for neighboring communities and providing support for small and medium-sized manufacturing companies.

All responses to the heat pump DPA RFI/NOI must be submitted by 5 p.m. (EST) on November 30, 2022.

Through the Inflation Reduction Act and the Bipartisan Infrastructure Law, DOE’s Office of State and Community Energy Programs will be funding an additional $260 million in contractor training programs to support building efficiency and electrification. To better assess workforce training needs, DOE is organizing a roundtable meeting with labor unions, businesses, and other stakeholders to get direct input on the ideal design of workforce training programs for the manufacturing and installation of heat pumps.

DOE’s Cold Climate Heat Pump Challenge

As part of DOE’s Residential Cold Climate Heat Pump Technology Challenge, the Department today announced Carrier and Trane Technologies as the newest partners to successfully develop a next-generation electric heat pump that can more effectively heat homes in colder climates relative to today’s models. Both companies join Lennox, which was announced earlier this year as the first company with U.S. operations to support this effort and will provide prototypes that will be installed in homes for performance monitoring and testing. Electric heat pumps can provide high-efficiency heating in freezing temperatures while cutting local air pollution and greenhouse gases and potentially saving families $500 a year or more on their utility bills.