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The Biden administration announces $169 million in grants to boost production of the technology in America.
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.
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The U.S. central bank left its interest rate target unchanged for the fifth time in a row.
Interest rate relief isn’t coming anytime soon for renewables. As widely expected, the Federal Reserve chose to keep rates unchanged on Wednesday, despite intense pressure from President Trump and two Republican Fed governors to lower rates.
The Fed maintained the benchmark short term rate at a range of 4.25% to 4.5%. During the press conference that followed the rate announcement, Fed Chair Jerome Powell gave no indication that the board will lower rates at the Fed’s next meeting in September, either. That’s contrary to Trump’s claims to reporters after the meeting. “We have made no decisions about September,” Powell said. “We don’t do that in advance. We’ll be taking that information into consideration and all the other information we get as we make our decision.”
High interest rates are particularly detrimental to renewable energy projects, as my colleague Matthew Zeitlin has noted many times over. The long-term benefit of renewables, of course, is that the wind and the sun are free (and effectively inexhaustible) fuel sources. The short-term tradeoff, however, is that renewables are capital-intensive, requiring high upfront costs to get up and running. The highest proportion of the lifetime cost of a renewable energy generator, such as a wind turbine or a solar farm, is in building it. Elevated interest rates make it that much more difficult to lure investors and borrow the significant capital necessary to build out renewable infrastructure.
“The lack of interest rate relief means that construction loans, which are floating-rate loans tied to market conditions, will command higher interest rates and raise the total project costs for energy developers,” Advait Arun, senior associate of energy finance at the Center for Public Enterprise and a Heatmap contributor, told me over email. “Developers rushing to build solar and wind energy between now and next summer to take advantage of tax credits will have to pay out these higher interest costs as they build.”
Though the Fed’s decision was unsurprising, the circumstances surrounding Wednesday’s meeting were out of the ordinary. For the first time since 1993, multiple Fed governors cast no votes on a rate decision. Christopher Waller and Michelle Bowman, both Republicans appointed by Trump, have voiced their preference for the Fed to lower rates by a quarter of a percentage point.
Additionally, Trump himself has been vocal about his views on chopping interest rates,— even going so far as to publicly threaten to fire Powell and appoint himself as head of the central bank, though he is legally unable to make good on his promise. Trump also recently criticized the Fed’s $2.5 billion building renovation project, singling out Powell for cost overruns. At the press conference on Wednesday, Powell emphasized the importance of the Fed’s independence from outside influence. “If you were not to have that, there’d be a great temptation of course to use interest rates to affect elections, for example,” he said.
While it may appease Trump, cutting interest rates won’t hold back the major energy price shocks that are very likely on their way. “Cutting rates sooner rather than later might make it easier for market actors to weather the coming shocks, but — crucially — they will not address the fiscal policy issues that created the shocks,” Arun noted. “However helpful rate cuts might be, they are not a solution to tariffs, tax credit uncertainty, and, soon, sharp spikes in electricity prices.”
The end of consumer electric vehicle tax credits isn’t great, but clawing back federal funding has been even worse.
Trump’s One Big Beautiful Bill took a huge bite out of the climate economy. One segment that emerged largely unscathed, however, is advanced climate tech. Companies working on nuclear, geothermal, battery storage, biofuels, and carbon capture may be shaken by the volatile business environment and a tad worried about provisions such as foreign entities of concern rules that could make their supply chains more complicated. But as of now, they can pretty much proceed with business as usual.
There is one big exception to that, however: The growing ecosystem of electric vehicle charging startups. Not only did OBBBA take a hammer to consumer EV tax credits, Trump also paused funding for key federal charging initiatives on his first day in office. While the startups I talked to were notably blasé about the former situation, executives are seriously worried about how attempts to clawback funding for charging infrastructure will impact the industry as a whole.
The outlook isn’t entirely bleak. Highway fast charging — generally the domain of larger companies such as Tesla, Electrify America, and ChargePoint — has actually seen solid growth so far this year despite the obstacles. But figuring out how to make charging work in urban centers and outlying communities has been a hot market for venture-backed companies over the past few years. And now some of them are facing a moment of reckoning.
“Cities are still pushing forward, but I would say there is a capital-C caution that’s being applied,” Tiya Gordon, founder of the curbside EV charging company It’s Electric, told me. “I think they feel that they need to get it right, and this is true for us as well as a startup. There’s not a margin for error in this environment.”
It’s Electric’s core innovation is siphoning off spare electrical capacity from buildings in cities to run its curbside Level 2, a.k.a. non-fast-charging EV charging network, negating the need for what can be a lengthy and complex grid interconnection process. The company then shares a portion of its revenue with the building owners who agree to the arrangement.
Just days before Trump took office, the startup was awarded $2.2 million from the Department of Transportation’s Charging and Fueling Infrastructure program to deploy curbside charging in Washington, D.C., legally obligated money that the new administration is now trying to rescind. That award remains in legal limbo. “We are proceeding as if we can’t count on that,” Gordon told me. “It’s sand through your fingers in an hourglass.”
That funding came on top of the company’s numerous awards from the Joint Office of Energy and Transportation, an interagency collaboration between the Department of Energy and the Department of Transportation created under the Bipartisan Infrastructure Law. Now the Joint Office has been effectively dismantled as former employees took deferred resignations and Trump has tried to revoke the funding awarded to It’s Electric and other startups.
All of this represents a significant financial setback for It’s Electric, as Gordon told me nondilutive funding — largely from federal and state grants — represents nearly half of the company’s total capital raised to date.
Gordon is hoping states will step into the breach, as climate leaders such as California and New York have thus far stood by their EV expansion plans. But Gordon has already noticed cities employing more diligence than ever when it comes to selecting partners. “They’re really going deep, they’re really taking time, they’re not rushing into any awards. So time is a big factor that represents caution,” she told me. And when it comes to the amount of chargers that cities seem to be looking to build, “the numbers are a little bit more modest.”
She mainly credits this pullback to the whiplash that Trump’s attempt to rescind funding for EV charging has caused. Compared to that, whatever deceleration the end of EV tax credits will cause in consumer uptake is a secondary concern.
“Honestly, that doesn’t really impact us at all,” Jeffrey Prosserman, CEO at Voltpost told me of the tax credits. His company retrofits lampposts in cities and suburbs, turning them into Level 2 EV charging platforms. “At the end of the day, EV adoption will either increase X or Y percent in a given year, but it’s going to continue to increase year over year. We’re past the tipping point, going from early adopters into the mainstream,” he told me.
EV prices are still falling, large businesses still want to electrify their fleets, and self-driving cars — which are far better suited to electric drivetrains — are still getting people excited, all of which should continue to fuel demand for a charging buildout. So while Prosserman acknowledged that nixing the consumer tax credits could “slow adoption by a couple percentage points,” he’s optimistic that the next political cycle will see a resurgence in support.
Like Gordon, however, he is quite concerned about the holdup in funding for both the Charging and Fueling Infrastructure program, or CFI, and its sister initiative, the National Electric Vehicle Infrastructure program, or NEVI. “It creates challenges for the EV charging companies like Voltpost, but it really fundamentally creates challenges for the cities and the general public who expected to have access to charging through these programs,” he told me. “That’s not to say that there isn’t a path forward. It’s just that the path that effectively the entire sector was operating on for the last few years has been reconfigured.”
NEVI is a $5 billion program that aims to build out a national charging network along highways, while CFI allocates $2.5 billion to deploy charging infrastructure in cities, towns, and hard-to-reach areas. Both were stood up in 2021 by the Bipartisan Infrastructure Law.
Politicians, industry analysts, and transportation officials alike have heavily critiqued these programs over the years for appearing to lack urgency, as building a network from scratch has proven to be an enormously complex and cumbersome undertaking. The former executive director of the joint office, Gabe Klein, said at a conference last year that the NEVI program wouldn’t really hit its stride until sometime between 2026 and 2028. Then Trump entered the White House and paused funding for both initiatives, creating a major roadblock for “the entire U.S. EV sector,” Prosserman told me.
Much like It’s Electric, Voltpost started the year by winning CFI funding to deploy its chargers in Washington, D.C,. and also secured a number of awards through the Joint Office of Energy and Transportation. With all of that money now tied up in lawsuits challenging Trump’s attempts to freeze the programs, Voltpost’s plans for growth have slowed. “We’re taking a more conservative approach for this year,” Prosserman told me, saying that while the company will eventually seek to raise a Series A it’s “not actively raising that Series A right now, given the macro situation.”
Prosserman said he’s been disappointed to see the general pullback in climate tech venture funding in the first half of 2025. “You have a group of investors who frankly said they are mission aligned, but are now taking a pause, not a stop, given the macroeconomic conditions, and having to wait until the dust settles to see how to reconfigure their portfolios,” Prosserman said. For now, he told me that Voltpost is leaning into its private-sector partnerships such as those with AT&T and Zipcar.
Not all charging companies have experienced this whiplash of funding awards and rescissions, though. SparkCharge, which makes portable, battery-powered fast chargers for commercial fleets and businesses, hasn’t received any NEVI or CFI grant money. The startup primarily serves customers by dispatching off-grid chargers on-demand or setting up stand-alone deployments, which are not core focus areas of either program.
The startup’s Chief Financial Officer David Piperno told me he’s glad that SparkCharge hasn’t relied on such capital, as it’s managed to “become a profitable enterprise with zero incentives, no state funding, no government funding.” That, he said, has allowed the company “to take a different approach to EV charging and be more innovative and have a variable pay-as-you-go model.” So far that seems to be working out pretty well, as it announced $30.5 million in new funding in May through a combination of equity financing and a venture loan.
Reaching former President Joe Biden’s goal of installing 500,000 publicly accessible EV chargers by 2030 still might be a longshot, though, especially as long as the Trump administration continues to target all things EV-related. And yet, charging executives remain relatively upbeat about the sector’s long-term fortunes.
“If you drive one of these vehicles, compared to what you had before, it’s just a superior car, right?” Piperno said, arguing that should continue to power steady consumer growth, even if it doesn’t happen as quickly as experts once predicted. While growth in EV sales increased by 40% in 2023, that slowed to just about 10% last year, as concerns over the availability of charging infrastructure, price, and range persist. “I think everyone thought that [the EV adoption] curve was going to be a lot faster. But I think that’s really normalized over the past few years already, and we don’t, quite frankly, see it normalizing much more than it has.”
At least now, executives told me, there’s more certainty regarding the policy landscape than at the beginning of the year. That holds especially true for startups that are willing and able to operate under the assumption that they might never see much of their recently awarded federal funding — at least anytime soon.
“The expression was, wait and see, wait and see, wait and see,” Gordon told me of Trump’s first months in office and the uncertainty around EV incentives and funding programs. “And now we waited and we saw, and it’s gone. And so we mourn and we move on, right?”
On NRC drama, Big Tech’s thirst, and Uplight’s for-sale sign
Current conditions: From Japan to California, the Pacific is preparing for tsunamis after one of the strongest earthquakes ever recorded struck the eastern coast of Russia • The Deep South is bracing for stifling temperatures • Hurricane Iona, the first named storm of the 2025 hurricane season in the Central Pacific, has reached Category 3 strength as it passes south of Hawaii.
It’s official: The Trump administration is going after the endangerment finding. The 2009 decision that greenhouse gases pose a danger to human life established the federal government’s legal right to rein in planet-heating emissions under the Clean Air Act and is the bedrock to virtually all national climate regulation. A rule proposed by the Environmental Protection Agency on Tuesday would scrap the finding and wipe out existing greenhouse gas rules on automobiles and heavy trucks. Also on Tuesday, the Department of Energy issued a report that “concludes that CO2-induced warming appears to be less damaging economically than commonly believed, and that aggressive mitigation strategies may be misdirected.”
The outcome of the rollback in the near term is likely years of lawsuits. As Harvard Law School’s Jody Freeman told Heatmap’s Emily Pontecorvo: “It doesn’t take effect for 30 days after it’s final. But yes, at that point, they get sued. These rules go to the D.C. Circuit Court of Appeals because that’s what the Clean Air Act says, and usually it would take about a year or so for a D.C. Circuit decision to happen. So now you’re in 2027. You can see the timeline on this stretching out.” In followup remarks by email, Freeman said: “From a legal perspective, the most aggressive argument they’re making is that they CANNOT regulate GHG emissions at all. If the Supreme Court agrees with that, a future administration can’t fix this. The backup arguments are more subtle and say, we have DISCRETION to use a different method to calculate a contribution toward endangerment, and we can consider many things other than science when making the endangerment finding. If the courts buy these arguments, a future administration could reverse course and rebuild.”
Since President Donald Trump first appointed Annie Caputo to the Nuclear Regulatory Commission in 2017, the Republican has made a name for herself as an industry-friendly champion of faster deployments of new reactors. Reappointed by former President Joe Biden in 2022, her term stretches through 2026. But on Tuesday, Caputo resigned, as I reported yesterday as a midday scoop in my Substack newsletter, Field Notes. The official reason she gave in the email she sent NRC staff is that the time had come to “more fully focus on my family.” But Caputo’s exit comes amid major political upheaval at what was once an oasis of bipartisan consensus.
In May, Trump proposed overhauling the way the NRC has long assessed the health risk from radiation as part of his four executive orders on nuclear power. Last month, in a move that critics decried as an illegal stretch of the White House’s authority over an independent agency, Trump fired Christopher Hanson, the Democratic commissioner who previously held the chair position. Earlier this month, E&E News reported that the Department of Government Efficiency representative detailed to the NRC had told the commission the White House expected it to “rubber stamp” new reactor designs that already gained approval from the departments of Defense or Energy. Emmet Penney at the conservative think tank FAI told me that if Caputo’s departure signals “radical changes” in the future, then the Trump administration’s efforts could backfire and lead to an “own-goal for energy dominance.”
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At least 34 factories or mineral refineries totaling more than $30 billion in investment have been paused, delayed, or canceled since Trump took office. That’s according to a new report from researchers at Wellesley College. “When you look at the projects that are slowing down, it’s all up and down the supply chain,” Jay Turner, an environmental studies professor who leads the database, told Heatmap’s Robinson Meyer.
A chart from the study.The Big Green Machine
The picture isn’t entirely bleak for EVs, at least not yet. Another 68 projects have advanced in the past six months, representing $24 billion in investment and more than 33,000 jobs.
Earlier this year, the lobby group Data Center Coalition and Facebook-owner Meta each asked the Trump administration to loosen permitting for data centers under the Clean Water Act. In an executive order unveiled last week, Wired reports that Trump responded by proposing a set of specific recommendations that mirror what the industry requested.
If implemented, the effects would vary by project, environmental lawyers told Wired. But the move comes amid increased scrutiny of data centers’ thirst for water. Earlier this month, The New York Times reported that a town’s wells ran dry after Meta broke ground on a new data center in Georgia.
In 2023, the startup Uplight tightened its grip on the distributed energy resource management market by acquiring the AI software company AutoGrid from Schneider Electric. Now Uplight is looking to sell itself. The company is pitching itself as “an AI-enhanced, full-stack platform built for the grid’s new demand,” according to a scoop yesterday from Latitude Media’s Maeve Allsup. With electricity demand surging and the aging grid heaving under pressure from extreme weather, technology to harness the solar panels, batteries, and other energy resources traditional utility infrastructure struggles to tap into is becoming crucial to avoiding blackouts.
Beyond Meat is finally getting beyond meat. The company plans to shed the flesh reference in its name this week as it launches its new Beyond Ground product that promises more protein than ground beef. “With this launch,” Fast Company’s Clint Rainey reported, “Beyond Meat is becoming merely Beyond and turning its focus away from only mimicking animal proteins to letting plant-based proteins speak for themselves. The radical move is cultural, agricultural, and financial.”