Energy Consumption Background:
According to the U.S. Department of Energy (DOE), 35% of the nation’s energy consumption is attributed to heating and cooling buildings. Given this significant share, there is a major opportunity to improve energy efficiency in this sector.
Adoption of Heat Pump Technology:
In response, the federal government is advancing plans to test the effectiveness of heat pump technology as an alternative to conventional heating and cooling systems. Heat pumps function by transferring—rather than generating—heat or cooling from the air, ground, or water, offering a potential 65%–80% improvement in energy efficiency. They are also capable of cutting greenhouse gas emissions by half.
Purpose of Investment and Beneficiary Companies:
The $169 million investment is being allocated to several heat pump manufacturers to help scale up production of these units. The funding stems from the 2022 climate legislation and is supported by a presidential directive from President Biden, which classifies climate change as an urgent threat and justifies the use of the Defense Production Act (DPA) in response. Beneficiary companies include Honeywell in Louisiana, Armstrong International in Michigan, and Ice Air in South Carolina.
