DOE Grants $85M to Advance Heat Pump, Component Manufacturing

The U.S. Department of Energy (DOE) granted nearly $85 million across four heat pump manufacturers to accelerate the production of electric heat pumps, heat pump hot water heaters, and heat pump components at five factories in New York, Tennessee, Texas, and Rhode Island. These projects, administered by the DOE’s Office of Manufacturing and Energy Supply Chains, will create over 500 jobs with 220 in disadvantaged communities.

“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 Jennifer M. Granholm, U.S. Secretary of Energy. “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 jobs.”

The Defense Production Act investments will increase the manufacture of heat pump technologies, which generate space heating, cooling, and water heating for homes, schools, and commercial and industrial uses. It will also increase U.S. compressor manufacturing, allowing these components to be easily installed in American-made heat pumps. The manufacturers will produce 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 per year.

Electric heat pumps reduce greenhouse gas emissions by up to 50% compared to modern condensing gas boilers. Heat pump water heaters can be two-to-three times more efficient than traditional electric water heaters, saving homeowners $300-$1,500 annually.

DOE Funding News

In March 2024, the DOE granted $425 million in funding to support small- to medium-sized manufacturers in current and former coal communities producing and recycling clean-energy products. This is an effort to reduce industrial emissions and increase clean-energy manufacturing. The program is financed by the Bipartisan Infrastructure Law—AMRG—and managed by the Office of Manufacturing and Energy Supply Chains. AMRG also financially supports the decarbonization of modern or retired facilities in coal communities.

The DOE divided its investment themes into the following categories: Clean Energy Manufacturing and Recycling and Industrial Decarbonization.

• Clean Energy Manufacturing and Recycling: This theme’s goal is to establish, re-equip, or expand current manufacturing and recycling facilities for the production or recycling of advanced energy.
• Industrial Decarbonization: A new theme in this round of funding, Industrial Decarbonization is centered around building or upgrading manufacturing facilities to significantly reduce greenhouse gas emissions and create low-carbon materials.

Last week, the DOE’s Office of Clean Energy Demonstrations (OCED) agreed to fund up to $925 million for the development of a clean hydrogen hub in Appalachia. OCED and ARCH2 will create an economically viable hydrogen ecosystem within the region, attracting private sector investment and employing local communities impacted by the energy transition. ARCH2 received $30 million for Phase 1, starting in July 2024 and expected to last up to 36 months. OCED’s remaining funds will be released in future phases as ARCH2 achieves determined milestones set by the DOE.