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 selection of 9 projects for negotiation of award for $169 million. This portfolio of selections will boost manufacturing of electric heat pump (air-to-air, geothermal, and air-to-water) and key components (compressors and refrigerants) at 15 sites in 13 states across the country. 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, invoked by President Biden using emergency authority on the basis of climate change, to utilize the Defense Production Act (DPA) to increase domestic production of five key clean energy technologies, including electric heat pumps. 

MESC-DPA-Domestic-Heat-Pump-Manufacturing-Selectee-Map-2023
MESC-DPA-Domestic-Heat-Pump-Manufacturing-Selectee-Map-2023

Armstrong International, Inc 
Project Title: High Temperature Heat Pump Manufacturing USA 
Project Location: Three Rivers, MI  
Federal Cost Share: $5,083,719  

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.  

Through its Community Benefit Plan, Armstrong seeks to continue its long-standing commitment to the City of Three Rivers and St. Joseph County communities by:  

  • identifying new opportunities to engage with the community, especially Disadvantaged Communities (DACs),
  • creating new high-quality jobs,
  • providing workforce education and training,
  • continuing current practices to ensure a safe and healthy workplace,
  • reducing barriers and improving access to jobs for local and underrepresented workers,
  • including those from identified (DACs), and
  • striving to achieve the goal of at least 40% of jobs created as a result of this project filled by residents of identified DACs.  

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: $9,208,605  

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, many of which are people who live in disadvantaged or distressed communities. 

Copeland LP 
Project Titles:
Facilities Expansion for Increased Production of Heat Pump Compressors and Hydronic Heating Systems
New Facilities for 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: $11,488,975  

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:

  1. 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;
  2. to manufacture heat pump specific technologies such as mechanical modulation and enhanced vapor injection;
  3. to produce 6,500 hydronic heat pump systems domestically;
  4. 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 fostering job quality, equity, and diversity in the workforce while making a positive impact in our communities. Through employee training and development, initiatives to advance diversity, equity and inclusion, and extensive community outreach activities, the company strives to create a workplace that values and embraces the unique contributions of every individual and help build stronger, more inclusive communities that thrive on equal opportunities and mutual respect. 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 in underserved densely populated communities. 
 

Honeywell International, Inc. 
Project Title: Heat Pump HFO-1234yf Capacity Expansion in Geismar, LA 
Project Location: Geismar, LA  
Federal Cost Share: $14,792,351  

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:  

  1. 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.  
  2. promote Diversity, Equity, Inclusion, and Accessibility ensuring that 40% of all contracts and subcontracts awarded for construction of this project be to companies registered within the Baton Rouge Metropolitan with preference given to minority-, woman-, and veteran owned enterprises.  

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 is adjacent to a disadvantaged population area and 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: $10,852,448  

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 and Hydro-Temp has committed to hiring 80% from disadvantaged communities. 
 
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 that will train disadvantaged youth and MBE/WBE/veteran contractors 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: $17,613,002  

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.  

Ice Air is committed to working with women-owned, minority-owned, and veteran-owned enterprises. As one of the leading suppliers of HVAC equipment to affordable housing projects in the New York City market, a significant portion of Ice Air’s products already benefit disadvantaged communities, supporting the Justice40 initiative. 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 combatting global warming. 

Mitsubishi Electric U.S. Inc. 
Project Title: High-Efficiency Heat Pump Compressor Manufacturing Project 
Project Location: Kentucky
Federal Cost Share: $50,000,000  

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.  

Treau, Inc. DBA Gradient 
Project Title: Heat Pumps to Those That Need Them Most 
Project Location: Detroit, MI
Federal Cost Share: $17,501,816 

Heat Pumps to Those That Need Them Most aims to address the critical need for efficient, affordable, and accessible heating and cooling solutions in underserved communities.  

Led by Gradient, this initiative seeks to greatly expand the domestic manufacturing of USA-designed, USA-made heat pumps that effectively serve Justice40 communities and older construction common in those areas.  

The project will establish a high-volume, vertically integrated manufacturing facility to produce innovative heat pumps. These heat pumps, featuring an inverted-U configuration, combine the efficiency of a cold-climate ductless mini-split with the advantages of a window air conditioner. They are designed to fit seamlessly into various window types without drilling or electrical upgrades, making them ideal for older buildings, multifamily residences, and low-to-moderate income communities.  

The manufacturing facility, located in Michigan (location to be announced soon), will bring significant economic benefits to the community. With a production capacity of 100,000 units per year, the project will provide approximately 300 full-time jobs once fully operational in 2026. The project's broader impact extends to the reduction of greenhouse gas (GHG) emissions. By displacing fossil fuel heating systems and utilizing hermetically sealed refrigerant loops, Gradient's heat pumps significantly decrease emissions while improving energy efficiency and contributing to the electrification of buildings.  

The facility is located in a disadvantaged community as identified by the White House’s Justice40 initiative, ensuring that the benefits of heating electrification reach those who need them the most. As part of their effort to benefit the local community, Gradient is committed to holding stakeholder engagement meetings, signing a Community Workforce Agreement, setting and meeting DEIA hiring targets, and publicly reporting their Justice40 impacts.  

Heat Pumps to Those That Need Them Most, led by Gradient, is poised to deliver affordable, efficient, and sustainable heating and cooling solutions to underserved communities in the United States. With its innovative product design and dedication to community impact, Gradient takes pride in forging a future where clean energy technology and social equity thrive, upholding America’s position at the forefront of sustainable advancements while safeguarding against geopolitical vulnerabilities.  

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: $33,067,270  

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.  

To ensure alignment with the local community, JCI will make outreach to labor unions, workforce development agencies, and other community groups interfacing with traditionally underserved populations in need of high-wage and high demand jobs impacted by the project. This will be accomplished by meeting with applicable labor organizations and economic development community groups to solicit information on their needs, strengths, and input to create guidelines for promoting fair and equitable hiring and job opportunities. Findings will be incorporated into the project’s plan and will inform future planning to promote civic participation, increase worker empowerment, and to equitably align the consolidated resources and needs of local workers and communities with the benefits and opportunities of new and ongoing projects.