Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Economy

The Heat Pump Manufacturing Boom is About to Begin

The Biden administration announces $169 million in grants to boost production of the technology in America.

President Biden and a heat pump.
Heatmap Illustration/Getty Images

When Russia invaded Ukraine in February 2022, American environmentalist and writer Bill McKibben pitched an idea to sap Russia’s power by drying up the market for its oil and gas. Heat Pumps for Peace and Freedom, he named the proposal, which called on President Biden to use his wartime emergency powers to ramp up manufacturing of electric heating appliances so that households could replace their fossil fuel-based furnaces.

Remarkably, Biden obliged. Just a few months later, he authorized the use of the Defense Production Act to expand American manufacturing of electric heat pumps, deeming them essential to national security. Now, a year and a half later, money is finally going out the door. On Friday, the Department of Energy announced $169 million in grants for nine companies that will invest in projects to boost domestic production of heat pumps.

“More than 40% of all U.S. [energy] consumption comes from homes, offices, schools, other buildings,” said Department of Energy Secretary Jennifer Granholm during a virtual event promoting the projects on Friday. “The problem is that we rely heavily on other countries for the oil and gas that heat and cool these buildings, and transitioning to American-made heat pumps makes us more secure.”

Granholm also noted that some 40% of heat pumps purchased here are made in China. “Today’s announcement means that we can chip away at that market and put America on a path to dominating it,” she said.

The manufacturing grants will ensure there’s supply to meet growing demand for heat pumps spurred by the Inflation Reduction Act, which created a number of incentives for building owners to install them. Many states are also creating their own programs and incentives to spur heat pump adoption as part of their climate plans.

“This is meeting demand that’s taken off all across the country,” said White House national climate advisor Ali Zaidi during the event, noting that a coalition of governors have collectively set a goal to deploy 20 million heat pumps by 2030. “That’s a massive expansion.”

The projects span 13 states and support a range of technologies. The largest grant, at $50 million, went to Mitsubishi to build a new factory in Kentucky that will make “variable capacity compressors,” which are essential components in the best performing, most efficient heat pumps on the market. Honeywell received $15 million to expand one of its existing facilities in Louisiana to increase annual production of a refrigerant that has a lower global warming potential than what’s used in many existing models.

A $17.5 million grant is going to a startup called Gradient to build its first factory in Detroit, Michigan, with a capacity of 100,000 units per year. Gradient specializes in producing heat pumps that can be installed in the window, similar to an air conditioner, and don’t require an electrician or plumber. The company was also selected by New York state to supply heat pumps for New York City’s public housing.

A company called Johnson Controls plans to use a $33 million grant to retrofit three of its factories in Kansas, Texas, and Pennsylvania, to increase the number of and types of heat pumps it produces. It anticipates producing more than 200,000 heat pumps per year, “an enormous increase” over the company’s 2023 production, according to the Department of Energy.

The grants will also support the production of different kinds of heat pumps. A company called Armstrong International based in Michigan will build a new facility to manufacture industrial versions that can produce the high heat needed to replace natural gas boilers in food manufacturing and paper and pulp plants. This can reduce the energy use associated with industrial heating by up to one third, according to one estimate, cutting emissions by 30 to 43 million tons per year.

Granholm said the grants would bring down the cost of heat pumps by boosting supply. It can cost homeowners anywhere from a few thousand dollars to upwards of $20,000, even with federal and state incentives, to swap out a natural gas boiler for a heat pump — a major impediment to wider adoption.

Stephen Pantano, the head of market transformation at Rewiring America, a nonprofit that advocates for electric appliances, was optimistic that the grants would help. “If you’re working with a domestic supplier, there’s an incentive for the builder and the component supplier to align and work together on product design and make products that are better suited for the U.S. market,” he said. “You also don’t have import duties and shipping costs and a lot of the other stuff that you have to deal with when you’re sourcing things internationally,” he said.

The grants are also expected to spur an estimated 1,700 jobs at the manufacturing facilities, as well as deliver investments to community colleges and apprentice programs for workforce development.

The Department of Energy said it plans to issue another round of Defense Production Act grants in the new year. The heat pump manufacturing boom is officially underway.

Emily Pontecorvo profile image

Emily Pontecorvo

Emily is a founding staff writer at Heatmap. Previously she was a staff writer at the nonprofit climate journalism outlet Grist, where she covered all aspects of decarbonization, from clean energy to electrified buildings to carbon dioxide removal.

Technology

Is Sodium-Ion the Next Big Battery?

U.S. manufacturers are racing to get into the game while they still can.

Sodium-ion batteries.
Heatmap Illustration/Getty Images, Peak Energy, Natron Energy

In the weird, wide world of energy storage, lithium-ion batteries may appear to be an unshakeably dominant technology. Costs have declined about 97% over the past three decades, grid-scale battery storage is forecast to grow faster than wind or solar in the U.S. in the coming decade, and the global lithium-ion supply chain is far outpacing demand, according to BloombergNEF.

That supply chain, however, is dominated by Chinese manufacturing. According to the International Energy Agency, China controls well over half the world’s lithium processing, nearly 85% of global battery cell production capacity, and the lion’s share of actual lithium-ion battery production. Any country creating products using lithium-ion batteries, including the U.S., is at this point dependent on Chinese imports.

Keep reading...Show less
Blue
Electric Vehicles

AM Briefing: Tesla’s Delay

On Musk’s latest move, Arctic shipping, and China’s natural disasters

Tesla Is Delaying the Robotaxi Reveal
Heatmap Illustration/Getty Images

Current conditions: Heavy rains triggered a deadly landslide in Nepal that swept away 60 people • More than a million residents are still without power in and around Houston • It will be about 80 degrees Fahrenheit in Berlin on Sunday for the Euro 2024 final, where England will take on Spain.

THE TOP FIVE

1. Biden administration announces $1.7 billion to convert auto plants into EV factories

The Biden administration announced yesterday that the Energy Department will pour $1.7 billion into helping U.S. automakers convert shuttered or struggling manufacturing facilities into EV factories. The money will go to factories in eight states (including swing states Michigan and Pennsylvania) and recipients include Stellantis, Volvo, GM, and Harley-Davidson. Most of the funding comes from the Inflation Reduction Act and it could create nearly 3,000 new jobs and save 15,000 union positions at risk of elimination, the Energy Department said. “Agencies across the federal government are rushing to award the rest of their climate cash before the end of Biden’s first term,” The Washington Post reported.

Keep reading...Show less
Yellow
Politics

What the Conventional Wisdom Gets Wrong About Trump and the IRA

Anything decarbonization-related is on the chopping block.

Donald Trump holding the IRA.
Heatmap Illustration/Getty Images

The Biden administration has shoveled money from the Inflation Reduction Act out the door as fast as possible this year, touting the many benefits all that cash has brought to Republican congressional districts. Many — in Washington, at think tanks and non-profits, among developers — have found in this a reason to be calm about the law’s fate. But this is incorrect. The IRA’s future as a climate law is in a far more precarious place than the Beltway conventional wisdom has so far suggested.

Shortly after the changing of the guard in Congress and the White House, policymakers will begin discussing whether to extend the Trump-era tax cuts, which expire at the end of 2025. If they opt to do so, they’ll try to find a way to pay for it — and if Republicans win big in the November elections, as recent polling and Democratic fretting suggests could happen, the IRA will be an easy target.

Keep reading...Show less