The Fed makes an even bigger bet on American-made heat pumps

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While everyone's focus is on accelerating the adoption of electric vehicles to cut carbon emissions, one tech hero is quickly flying under the radar: the heat pump. Instead of burning natural gas or coal to generate heat, this all-electric device extracts heat from the outside air – even if it's cold outside – and pumps it inside to warm the structure. After years of stealth, steady growth, heat pumps now outsell gas furnaces in the United States, while EVs accounted for just 8 percent of all U.S. new vehicle sales in the first half of 2023.

In November, the Biden administration announced it would provide $169 million in federal funding to the home heat pump industry to increase capacity to manufacture the actual devices and their various components, such as compressors. The Fed estimated that 1,700 jobs would ultimately be created in 13 states. Seeing even more momentum in heat pump adoption since then, the Department of Energy is today announcing an additional $63 million for the same purpose. This time, money also entails a heat pump to heat and cool the water in the house.

Basically, the goal of federal funding is to eliminate gas use in the home wherever possible, working toward moving homes to operate entirely on electricity. “I think we're really seeing a huge change across the country in the way people heat and cool their homes,” says Ali Zaidi, assistant to the president and national climate adviser. “For a really long time, we were looking at the manufacturing sector, wondering if we could get a widget to decarbonize our homes and the places we work. We found that tool.”

The ordinary heat pump is so much more efficient than a gas furnace that even if you are forced to power off a grid that runs on fossil fuels, you are still better off. By one estimate, switching to a heat pump would save the average American family more than $550 per year. The Inflation Reduction Act of 2022 offers thousands of dollars in tax credits or rebates for switching a home to a heat pump.

Like the first round of funding last year, the administration is invoking the Defense Production Act – a long-standing law that gives the President the power to ensure the supply of materials needed for national defense. It is being implemented here especially on the basis of climate change. “As part of the Biden-Harris Administration's commitment to combating the climate crisis, these Defense Production Act dollars will support home heat pump manufacturing to meet consumer enthusiasm, reduce emissions, and create clean energy jobs across the country.” Will increase further,” the US wrote. Energy Secretary Jennifer M. Granholm said in a statement to WIRED.

More specifically, heat pumps offer energy security: They're fully electric, so you can run them on a grid powered by renewable energy like wind and solar, which themselves are ideally manufactured in the US. Reducing emissions by decarbonizing buildings with heat pumps would also slow climate change, reducing the severity of increasingly destructive wildfires, hurricanes and other disasters. Every bit of temperature rise we can avoid will save lives and money.

“Energy and climate security, we believe it is impossible to separate these two things at this time,” says Zaidi. “The real premise here is to recognize that our national security goes through solutions that reduce our dependence on fossil fuels.”

Heat pumps are also good for economic security, Zaidi says. Supercharging Home production of complete heat pumps and their individual components offers a variety of jobs. Individual states are also moving quickly to adopt and promote the industry: Just last week, nine of them committed to getting heat pumps to account for 90 percent of residential heating, air-conditioning and water-heating shipments by 2040. I promised.

The trick would be to find workers in a factory to put things together, and even more trained technicians to install things around the country. To that end, this new funding allows applicants to propose using a portion of the funds to expand production as well as develop their manufacturing facility workforce. Zaidi says, “We're really confident that we're continuing to invest in the ability to not only make this stuff, but also to deploy it in a way that creates really good-paying jobs across the country.” jobs should be promoted.”