Dive Brief:
- The Department of Energy is looking to spend $250 million on projects to grow the U.S.'s heat pump manufacturing muscle, according to a notice of intent issued earlier this month.
- Ahead of the fund disbursements, the department is seeking input on the application process and criteria, the types of projects to select, and how the funds could support federal goals for improved energy equity, accessibility, job growth and small- and medium-sized manufacturers.
- Input for the funding is due on November 30, with the first solicitation expected to be issued in early 2023.
Dive Insight:
As the U.S. looks to diminish its dependency on foreign energy sources, the department is hoping to use a total of $500 million to boost development and production of domestic energy.
Heat pump manufacturing is one of five key clean energy technologies the Department of Energy is pushing to grow using authority granted to it in June from the Defense Production Act. The four other clean technologies include: transformers and electric grid components; solar photovoltaics; insulation materials; and electrolyzers, platinum group metals and fuel cells for clean hydrogen.
In addition to the millions of dollars in funding, the Inflation Reduction Act also includes a variety of tax credits, rebates and other financial incentives to spur greater U.S. production of clean technology.
"Increased usage of electric heat pumps, especially where they replace fuel oil for air and water heating, will allow the United States to reduce its reliance on fossil fuels, including from adversaries, and thus strengthen U.S. energy security and national defense," the notice said. "Electric heat pumps also allow consumers and businesses to slash energy use and costs and reduce climate risks."
As part of its assessment over how to train workforces to manufacture and install heat pumps, the department will host a roundtable meeting with labor unions, businesses and other stakeholders to get direct input on the ideal design of workforce training programs, according to a press release.
Roughly 190 million heat pumps were used in buildings around the globe last year. And while the U.S. hit record heat pump sales in 2021, the energy source currently only services 10% of global heating needs, according to the International Energy Agency.
To hit the agency's pathway to net zero emissions in the energy sector by 2050, heat pump usage needs to double to serve 20% of global heating needs by 2030. Doing so would spike the number of heat pumps installed around the globe from 180 million in 2020 to around 600 million in 2030, according to a September 2022 IEA report.
Such rapid growth in the industry could lead to potential supply shortages, but the Department of Energy’s funding will prove particularly useful to avoid that issue, said Stephen Walls, building decarbonization advocate for the National Resources Defense Council.
Walls said he's interested to see how manufacturers want to spend the funding, but that one option could be for orders for pumps built largely from inputs manufactured in North America. Another funding option could be to retool existing manufacturing facilities to produce heat pumps.
