DOE Heat Pump Defense Production Act Program Selectees Project Summaries
DE-FOA-0002987
Heat pumps are critical to reducing the nation’s reliance on fossil fuels, bolstering national security, and boosting energy independence to strengthen national defense, lowering consumer energy costs, improving energy efficiency, and mitigating the climate crisis. The U.S. Department of Energy (DOE) announced the round 2 selections for negotiation of award - 4 projects for $84.7 million. This portfolio of round 2 selections will boost manufacturing of electric heat pumps, heat pump hot water heaters, and components at 5 facilities. These selections build on the selections announced on November 17, 2023. The lead organizations are listed below along with their proposed project locations and technologies. The selected projects are the first awards from DOE’s authorization to utilize the Defense Production Act (DPA) to increase domestic production of five key clean energy technologies, including electric heat pumps.
Round 2
A.O. Smith
Project Title: Facilities Expansion for Increased Production of Heat Pump Water Heaters
Project Location: Ashland City, TN
Federal Cost Share: $25,000,000Status: Selected
Celebrating its 150th year of business and manufacturing products in the United States for domestic and international markets, A. O. Smith Corporation, looks forward to its partnership with the Department of Energy (DOE) on its project to modernize and expand its manufacturing capacity to enable high volume production of residential heat pump water heaters (HPWHs).
The project’s objectives are as follows:
- Establish an innovative high-volume manufacturing process for residential HPWHs, which will substantially increase the domestic production of this key decarbonization technology.
- Bring optimization attributes to the HPWH manufacturing process that will enhance both the availability and affordability of American-made HPWHs, while accelerating market transformation goals for broad consumer adoption of the technology, which will lead to energy and utility bill savings for consumers; a reduction in energy consumption and carbon emissions nation-wide; as well as strengthening the domestic manufacturing supply chain of heat pump technology and its component parts.
- Consistent with its guiding principles of being a good corporate citizen and good place to work, the project will make workforce and infrastructure investments leading to new innovative clean technology manufacturing jobs in Cheatham County, Tennessee.
BITZER Scroll, Inc.
Project Title: Increasing Production Capacity of Commercial Scroll Compressors for Electric Heat Pump
Project Location: Syracuse, NY
Federal Cost Share: $5,005,252Status: Selected
BITZER Scroll Inc. designs and manufactures scroll compressors, which are primary components in commercial and industrial electric 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.
BITZER Scroll targets increasing annual production capacity by over 50% to meet projected U.S. customer demand.
To achieve this goal, this project will invest in BITZER’s manufacturing facility in Syracuse, NY. This investment will bolster the facility infrastructure to support additional electrical load. Furthermore, machining capacity will be increased by the addition of new computer numerical control (CNC) machining centers. Finally, the project will establish a new assembly line to meet the anticipated production requirements.
The DOE funding will directly impact the U.S. manufacturing output of electric heat pumps by increasing the domestic production volume of one of the primary components. The market availability of reliable, efficient scroll compressors is critical to the component supply chain of commercial heat pumps.
This planned increase in production capacity will generate an additional 20 jobs. BITZER Scroll is committed to improving the general labor force by providing training and welding certification opportunities.
Daikin Comfort Technologies North America, Inc.
Project Title: Daikin Domestic Inverter Heat Pump Manufacturing Project
Project Location: Waller, TX
Federal Cost Share: $39,000,000Status: Selected
Daikin Comfort Technologies North America, Inc. (“Daikin”) project will strategically retrofit a production line at Daikin Texas Technology Park (DTTP) to begin a transition of existing production lines towards the production of energy efficient heat pump technology that support decarbonization initiatives and accelerate the transition from combustion heating to electrification to meet federal and state carbon neutrality goals.
This conversion aims to expand and enhance Daikin’s current air-to-air heat pump (AAHP) systems while introducing air-to-water heat pump (AWHP) systems to the U.S. market. These systems combine heating and cooling functions into a single electrically powered unit, offering an environmentally friendly and highly energy efficient alternative to traditional combustion-based products. Also, the 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 plans to streamline production by consolidating these various manufacturing lines into a single line within the existing DTTP facility and hire new employees. The project will enable Daikin to manufacture these products domestically, catering to both the domestic AAHP and AWHP markets, which are expected to grow rapidly within the decade. Overall, the project signifies a significant step towards enhancing energy efficiency and promoting the adoption of new heat pump technology in the U.S. market, aligning with the broader DOE goals of sustainability and innovation.
This will be coupled with Daikin’s endeavors to fortify its existing partnerships and expand the scope of its educational and training initiatives in the heating, ventilation, air conditioning and refrigeration (HVAC&R) industry. By deepening collaborations with training organizations, Daikin will broaden the reach and effectiveness of these programs, enhance certification opportunities, and expand technical training across the board. Additionally, Daikin will create approximately 275 jobs and actively promote skills training and education opportunities within the surrounding community of DTTP, which includes Waller, Houston, and Prairie View.
Modine Manufacturing Company
Project Title: Application to Accelerate Domestic Manufacturing of High-efficiency Electric Heat Pumps in Qualified HVAC Industrial Settings – 2024
Project Location: Longview, TX; West Kingston, RI
Federal Cost Share: $15,728,109Status: Selected
Modine Manufacturing Company will accelerate domestic manufacturing of high-efficiency electric heat pumps in industrial setting by expanding production at both the Longview, Texas and West Kingston, Rhode Island facilities.
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. Project will introduce new assembly lines, establish additional sub-component productions lines, and implement end-of-line testing facility for quality assurance. Our target production volume is set to expand exponentially, reflecting a commitment to meeting the evolving needs of large-scale industrial and commercial clients. Through the expansion, we anticipate strengthening partnerships with domestic suppliers in these key areas, further enhancing our reliance on domestic sourcing.
In West Kingston, Rhode Island, this project will help expand Modine’s current capacity to meet rising demand for classroom heating solutions. Through strategic procurement of fixtures and equipment (e.g., sheet metal shaker table(s), press brakes, fabricators, paint line upgrade) for the West Kingston facility, we anticipate a substantial growth trajectory for domestic electric air-to-water heat pumps, underscoring our dedication to supporting the educational sector with reliable and efficient heating solutions. The expansion in capacity presents an opportunity to deepen collaboration with domestic suppliers, reinforcing our commitment to sourcing locally. By leveraging the expertise and resources of domestic partners, we also bolster the economic competitiveness of the region.
Project Impact, Commitments, and Goals
- Expand U.S. heat pump technology and system manufacturing and create employment opportunities in Longview, Texas, in an Opportunity Zone.
- Upgrade production capabilities to support continued and enhanced operations in West Kingston, Rhode Island.
- Increase local hiring for skilled manufacturing positions, sourcing a majority of the workforce from local trade schools and colleges/universities to create 140 jobs.
- Ensure competitive compensation and benefits for the workforce and comprehensive benefits packages including health insurance, retirement contributions, and paid time off.
- Development of U.S.-based heat pump manufacturing capabilities.
- Help drive U.S. innovation of decarbonization technology and the adoption of refrigerants with lower global warming potential.
- Strengthen local and domestic supply chain partnerships through U.S. procurement.
Round 1
Armstrong International, Inc
Project Title: High Temperature Heat Pump Manufacturing USA
Project Location: Three Rivers, MI
Federal Cost Share: $5,083,719Status: Awarded
The objectives of the proposed project are to construct a new facility in the United States to manufacture industrial heat pumps to provide supply reliability and to launch these heat pumps in the United States.
The project will add 29,000 square feet to an existing facility to manufacture industrial heat pumps in the United States.
The project has the potential to positively impact:
- the decarbonization of the United States, the capacity of industrial heat pump manufacturing in the United States, and
- the creation of high-quality jobs and the development of in-demand technical skills.
Bard Manufacturing Company
Project Title: Increase Bard’s Manufacturing Capacity of Heat Pumps to Cater to the Growth of Heat Pumps in the US Market
Project Location: Madison, GA
Federal Cost Share: $9,208,605Status: Awarded
The products to be produced are wall mounted Single Package Vertical Unit (SPVU) air conditioning and heat pumps. These units are installed on a wall on the exterior of a building. Currently, Bard has the production capacity to produce SPVUs that are a mix of air conditioning and heat pumps. In 2022, approximately 25% of units produced were heat pump units, with the expectation that demand for these units will increase 40 to 60% in the next 2 years.
Bard is embarking on a project to expand our Madison, GA facility which will include equipment for additional fabrication capacity and assembly equipment for a new heat pump line. The primary expected result of period one is planning and designing the project and beginning construction on the building addition. Period two is focused on the completion of the building addition and the installation and start-up of the fabrication and assembly equipment.
The proposed project is to increase Bard’s manufacturing capacity of heat pumps in response to anticipated growth of heat pump demand in the US market. Additionally, we are investing in our existing Madison, GA facility and community by providing good high quality construction jobs and full-time employment.
Copeland LP
Project Title: Increasing the Production of Heat Pump Compressors and Hydronic Heating Systems
Project Locations: Sidney, OH; Ava, MO; Lebanon, MO; and Cudahy, WI
Federal Cost Share: $11,488,975Status: Awarded
Copeland is actively working to deliver the next-level of high-efficiency 1.5-to-40-ton heat pump compressors and hydronic systems to enable the replacement of fuel-fired and electric resistance furnaces with electric heat pumps in support of the Department of Energy’s (DOE) goals to provide equitable and affordable solutions to building decarbonization. The objective of the project is to accelerate new investments to expand production of residential, commercial, and industrial heat pump compressors and systems in the United States.
Investments will happen across four manufacturing locations and suppliers in several states. Ava, Missouri will increase the capacity to machine main bearing housings for a new product line of residential heat pump compressors as well as investments in tooling expansion at our supplier facilities to expand production of the same new product line. Lebanon, Missouri will enable production of a compressor modulation technology for the residential heat pump market as well as enhanced vapor injection technologies in commercial 30 and 40 horsepower compressors. Sidney, Ohio will introduce a hydronic heat pump system designed for the U. S. market. Cudahy, Wisconsin will expand production of screw compressor machining and assembly for heat pump systems.
Potential impact of the project:- to expand the production capacity of residential heat pump compressors by more than 1 million units annually in the 1.5-ton to 5-ton range;
- to manufacture heat pump specific technologies such as mechanical modulation and enhanced vapor injection;
- to produce 6,500 hydronic heat pump systems domestically;
- to expand domestic industrial hydronic heat pump production capacity by 50 units annually by 2030.
Copeland’s products, expertise and innovation play a key role in improving the energy efficiency of heating and cooling solutions, including the rapidly growing market for electric heat pumps and low-GWP refrigerants. Copeland is also an organization that is committed to making a positive impact in our communities. The proposed investments in the residential market segment will also enable greater affordability of high efficiency heat pump technologies that reduce energy consumption, greenhouse gas emissions, and local pollutants.
Honeywell International, Inc.
Project Title: Heat Pump HFO-1234yf Capacity Expansion in Geismar, LA
Project Location: Geismar, LA
Federal Cost Share: $14,792,351Status: Selected
Honeywell International, Inc. (“Honeywell”) is seeking funding under the Department of Energy Heat Pump Defense Production Act Program to increase the production capacity of its HFO-1234yf product at its current plant in Geismar, Louisiana. The expansion would allow Honeywell to produce an additional quantity of R-454B, which is a refrigerant blend used for electric heat pumps. HFO-1234yf is a low global warming potential (“GWP”) component used to produce R-454B.
The increased domestic production of HFO-1234yf has a direct positive impact on the supply chain of electric heat pump installations and is an essential component that increases energy efficiency of modern electric heat pumps. All while reducing domestic dependence on foreign fossil fuels and decreasing carbon emissions in production and utilization of electric heat pumps.The proposed process expansion would be a total investment of $36 million with the DOE contributing a 40% cost share of $15 million. The project can be completed within 36 months of funding commitment. Honeywell’s project will:
- increase annual production capability of HFO-1234 by 2027 with negligible increase in carbon emission during the production process, supporting the U.S. goal of 50% reduction in carbon emissions by 2030.
- ensure that 40% of all contracts and subcontracts awarded for construction of this project are companies registered within the Baton Rouge Metropolitan Area.
Create a minimum of 50 construction, technology, or clean energy temporary jobs throughout construction and retain 468 American jobs at Honeywell Geismar.
The expansion of Honeywell Geismar supports the addition of over one million low-GWP heat pump systems per year and the associated emissions reductions compared with legacy heat pump refrigerant use. The Honeywell Geismar site was selected for expansion because Geismar is believed to be the largest production facility for HFO-1234yf in the United States. Additionally, the Geismar facility expansion will retain jobs, improve environmental outcomes, and support economic growth in Southern Louisiana.
Hydro-Temp Corporation
Project Title: Two Heat Pump Factories: 10-fold Increase of Domestic Production of Ground-source Heat Pumps at Two Factories Located in Disadvantaged Communities
Project Locations: Pocahontas, AR and Albany, NY
Federal Cost Share: $10,852,448Status: Selected
With the Defense Production Act funding, Hydro-Temp (HT) and Energy Catalyst (EC) propose a co-development to increase their heat pump production by over ten-fold. Hydro-Temp Corp. is a 42-year-old ground-source heat pump manufacturer based in Pocahontas, AR and currently manufactures the subassemblies used to build Energy Catalyst heat pumps as well as brand label manufacturing for other heat pump brands such as Geo-Cool/MrCool as well as their own in-house brand Hydro-Temp.
Energy Catalyst is a growing heat pump manufacturer and technology company based in Watervliet, NY that manufactures the only ground source Energy Star certified heat pump in North America that can reuse the existing heating infrastructure of a home heated with baseboard or radiators. The partnership between these two companies is mutually beneficial: Hydro-Temp expands their sales territory to the rapidly growing market in the northeast, while Energy Catalyst leverages the Hydro-Temp scalable manufacturing facility to accelerate availability of their innovative heat pump designs specifically for the northeast market.
Hydro-Temp plans a major expansion of facilities and tooling to increase the manufacturing capacity 10-fold, from the current 250 units/yr. to over 2,500 units/yr. by 2025. The proposed facility upgrades allow for expansion of manufacturing capacity to exceed 5,000 units/yr. by 2027 if there is sufficient demand (a 20-fold increase). Hydro-Temp will set up cooperative agreements with Black River Technical College (BRTC) for an HVAC job development and factory training program. The new facility is expected to hire up to 80 new, full-time employees.
Energy Catalyst plans to retrofit a facility that will allow their manufacturing capabilities to meet the current and expected future geothermal heat pump demand. Energy Catalyst (EC) will outlay $10M for a 34,000 square foot facility that will contain automated manufacturing equipment, a high accuracy testing lab, an expansive contractor training room. EC will construct an IGSHPA certified training program in a variety of geothermal topics. The training center will help fulfill the growing demand for clean energy experts in NYS. EC will hire up to 50 employees over 5 years.Ice Air, LLC
Project Title: Ice Air Breakthrough Heat Pump Technologies Restoring Manufacturing Excellence in the USA
Project Location: Spartanburg, SC
Federal Cost Share: $17,613,002Status: Selected
Ice Air, LLC is a leading supplier of high-efficiency electric heat pump technology for commercial residential buildings, and a leading provider for affordable housing in New York City. Ice Air has been serving the U.S. and Canadian markets for 20 years.
Ice Air is presenting a plan to establish a new commercial-scale manufacturing facility to develop and advance domestic production capability for electric heat pumps. Substantially all equipment is currently produced in Asia. Due to the increase in demand for these products, the establishment of a production facility in the U.S. has become necessary. Establishing this facility strengthens the domestic supply chain, while reducing dependence on foreign suppliers of fossil fuels.
Ice Air offers a fully electric product line, which allows buildings and consumers to reduce energy use, greenhouse gas emissions, and operating costs. The electric product lineup includes cold climate air-to-air heat pumps, geothermal water-to-air heat pumps, and cold climate high-capacity air-to-water heat pumps.
In addition to the above benefits, the establishment of this facility will lead to further job growth and opportunities. Ice Air engages with technical/trade schools and colleges to enhance the workforce, ensure proper training, and provide opportunities to advance in both responsibility and compensation. As electric heat pumps become more prevalent, the number of employees and annual wages will continue to increase.
With the support of strong partners and organizations throughout the country, Ice Air will play a major role in increasing the resiliency of the U.S. and combating global warming.
MELCO HVAC (novated from Mitsubishi Electric U.S. Inc.)
Project Title: High-Efficiency Heat Pump Compressor Manufacturing Project
Project Location: Maysville, Kentucky
Federal Cost Share: $50,000,000Status: Awarded
Mitsubishi Electric U.S.’s objectives are:
- Establish a factory to make variable capacity compressors for all-climate heat pumps.
Mitsubishi Electric US, Inc. (MEUS) plans to produce variable capacity compressors for high-efficiency all-climate heat pump systems.
Heat pumps powered by variable capacity compressors are a proven technology and operate effectively in cold climate regions. They significantly lower greenhouse gas emissions associated with the heating and cooling of homes and buildings.
Nearly all the variable capacity compressors currently used in all-climate heat pumps sold in the U.S. are manufactured in Asia. The Mitsubishi Electric plant would provide a domestic supply source for these critical heat pump components.
The planned MEUS investment proposes the inclusion of solar panels, high efficiency heat pumps, and sophisticated energy management controls, consistent with the company’s goal of making all factories net-zero by 2030.
York International Corporation
Project Title: Johnson Controls Heat Pump Defense Production Act Program
Project Locations: Wichita, KS ; Waynesboro , PA ; and San Antonio , TX
Federal Cost Share: $33,067,270Status: Awarded
Johnson Controls, Inc. (JCI) is honored to propose a unique initiative to the Department of Energy (DOE) enabling broad and inclusive participation in the heat pump revolution to benefit individuals, communities, and organizations. We are forecasting a significant market shift toward heat pump adoption to reduce emissions in the U.S. and have been strategically planning to expand our current manufacturing plants to accommodate the necessary transition. However, the transition to heat pumps appears to be concentrated in the residential sector, exclusive of the critically important commercial, institutional, and industrial sectors. In addition, in the current environment, we do not have the capital necessary to adjust our manufacturing processes and equipment fast enough to effectively support consumer and national security needs while maintaining our labor pool and production outputs.
Therefore, this grant request is uniquely aimed at bringing a full and inclusive suite of heat pumps to market, making it possible for us to accelerate the pace of retrofitting three of our U.S. manufacturing sites to produce and substantially increase the number and breadth of electric heat pumps necessary to transform the market, deliver significant greenhouse gas (GHG) emissions reductions for the built environment, and establish the U.S. as the global leader in heat pump manufacturing. Driving this transformation will be American labor, including union labor at our plants. Upon completion, we anticipate manufacturing over 200,000 heat pump units per year, an enormous increase over JCI’s fiscal year 2023 production. Additionally, through displacing residential furnaces and hydronic systems, this project will save 1.63 million MT CO2e from residential heating and 25 million MT CO2e from commercial and industrial heating per year. Funding from the DOE will allow us to accomplish this unprecedented investment in areas of our country in need of sustainable industry and good paying jobs while we accelerate our partnership and investments in diverse businesses.