President Biden Enlists Heat Pumps For National Defense

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President Biden is still busy presidenting, and that includes using his authority under the Defense Production Act of 1950 to stimulate the manufacture of items deemed essential for national security. In the context of the looming climate crisis, that means another $85 million in federal assistance is going to help stimulate the manufacture of energy efficient heat pumps, heat pumps, and more heat pumps in the US.

(Lots) More Heat Pumps For The USA

The Biden administration is not kidding around when it comes to bumping up the production of heat pumps. Last fall the president used his authority under the Defense Production Act to assign a funding pot of $169 million to simulate heat pump production in the US. The fresh infusion of $85 million, announced this week, is expected to enable US manufacturers to kick out an additional 155,000 residential heat pumps above what they’re producing now.

The US Department of Energy, which is administering the funds, also expects an additional 2,000 heat pumps for schools along with the impressive figure of 440,000 residential heat pump water heaters.

Also targeted for funding is the heat pump supply chain, with the expectation of adding 20,000 large compressors to the total. “The awards will also increase the number of compressors produced on US soil, which are typically manufactured overseas in Europe and Asia, making it easier for domestic manufacturers to use these key components in American-made heat pumps,” the Energy Department explains.

Heat Pumps: Who’s Gonna Pay For All This?

Heat pumps are front and center in the Biden administration’s greenhouse gas emissions roadmap. In past years they were mainly used in more temperate regions of the US, but recent technology improvements have proved them capable of delivering heat and AC regardless of cold winters and hot summers (see lots more background here).

In a new heat pump cost analysis released last February, the Energy Department’s National Renewable Energy Laboratory calculated that 62–95% of US households would save money on their utility bills with a heat pump, depending on the efficiency of the model installed.

“Improving the weatherization of a home, such as by installing better insulation, would increase the range to 82% to 97%,” NREL noted.

“However, due to high installation costs, heat pumps may only be financially feasible for a smaller portion of households,” they added on a more gloomy note.

Tax credits in the Inflation Reduction Act can help. NREL observes that an affordability gap remains, but many households are taking advantage of the IRA. In April, the Treasury Department reported that more than 100,000 households filed claims for heat pump water heaters. More than 250,000 households also filed claims for residential heat pumps, though that figure includes gas as well as electric heat pumps.

Industry partnerships could also help open up new opportunities for affordability. Another route becoming available for renters is the geothermal heat pump industry, which is beginning to turn its attention to high-rises and apartment complexes.

Who Gets To Make All The Extra Heat Pumps?

The Energy Department is still in negotiations with the four manufacturers selected for a share of the $85 million funding pot, but they did release some preliminary details.

If all goes according to plan, the 150-year-old manufacturer A.O. Smith of Tennessee will get $25 million to modernize its manufacturing facilities for the high-volume production of heat pump water heaters.

The manufacturer Daikin Comfort Technologies North America will get $39 million to retrofit its Texas facility to include both air-to-air and air-to water technologies. The air-to-water version is new to the US market, as described by Daikin.

“[T]he AWHP product line serves as a highly energy efficient alternative to traditional combustion boilers. These products, known for their versatility and superior performance in extreme conditions, are market-innovators within the U.S., as such technology has yet to be widely adopted domestically,” Daikin notes.

The employment market in Texas will also benefit from an award of $15.7 million allocated to the firm Modine Manufacturing Company, which produces high-performance electric heat pumps for industrial use.

“In Longview, Texas, this project will expand Modine’s current capacity to meet rising demand and drive the growth of Modine’s commercial and industrial air-to-water heat pump production,” Modine explains.

“Our target production volume is set to expand exponentially, reflecting a commitment to meeting the evolving needs of large-scale industrial and commercial clients,” they add.

Modine will also deploy the new funds to upgrade its school heat pump manufacturing facility in Rhode Island. Like Daikin, the company also anticipates rising demand for electric air-to-water heat pumps.

More Compressors For The Heat Pump Supply Chain

The fourth awardee falls into the supply chain category. A $5 million award is earmarked for the firm Bitzer Scroll. The company has its sights set on increasing annual production capacity by over 50% to accommodate the rising demand for its scroll compressors, a key component in industrial heat pumps and chillers.

“BITZER is actively working to increase the manufacturing capacity of innovative, high-efficiency 7.5-to-50-ton compressors tailored for the emerging low GWP (Global Warming Potential) refrigerants,” the company explains.

The funds will go to upgrade the company’s facility in New York, including a new assembly line and new CNC (computer numerical control) machining centers.

As with all of the firms awarded federal funds under the Biden administration, Bitzer has also developed a community plan that includes environmental justice elements, such as training and certification opportunities for disadvantaged residents.

Let’s Hear It For National Defense

On its part, the Energy Department is keen on linking the national security benefits of heat pumps and other energy efficient technologies with the potential for saving money.

“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,” Energy Secretary Jennifer M. Granholm said in a press statement on August 7.

“Today’s investments, levering the authorities in the Defense Production Act, harness the power of American innovation to jumpstart critical clean energy manufacturing capacity and to protect our families, our economy, and our planet,” emphasized White House National Climate Advisor Ali Zaidi.

With further technology improvements in sight by 2030, the Energy Department anticipates that electric heat pumps can reduce greenhouse gas emissions by 75% compared to conventional HVAC systems.

“Heat pump water heaters can be two-to-three times more energy efficient than conventional electric water heaters,” they add.

Keep an eye out for new elastocaloric heating and cooling technology, because apparently we ain’t seen nothing yet.

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Image: The Biden administration is deploying the Defense Production Act of 1950 to ensure that more US-manufactured heat pumps get into the market, more quickly (courtesy of US DOE).