The Bipartisan Infrastructure Law (BIL) of 2021 (Pub. L. 117-58), and the Inflation Reduction Act (IRA) of 2022 (Pub. L. 117-169) included several incentives that are expected to increase demand of electric heat pumps in retrofit and new markets but may not ensure domestic capacity of electric heat pumps at the speed and scale required to meet the anticipated demand. In June 2022, President Biden issued five determinations under the Defense Production Act (DPA) of 1950 (50 U.S.C. 4501 et seq.), including a presidential determination to allow DOE to use its delegated DPA authorities to expand the domestic production capability for electric heat pumps.

Section 30001 of the IRA appropriated $500 million to carry out the DPA, of which $250 million was subsequently allocated to the Department of Energy to support the growth of manufacturing needed to meet the anticipated growing demand for electric heat pumps. This funding could help scale up U.S. heating, ventilation, and air conditioning (HVAC) and water heating (WH) manufacturing; accelerate installation of high-efficiency electric heat pumps in homes, qualified buildings; and industrial settings, and complement investment coming through other BIL and IRA provisions described earlier.

The main goal of this program is to ensure national security by accelerating the growth of domestic production capability of electric heat pumps to meet the anticipated increased demand for clean energy technologies as the economy transitions to net-zero emissions. The program will also aim to:

• Expand United States electric heat pump manufacturing to reduce the amount of energy needed in our buildings, leading to less reliance by the U.S. and allies on adversaries, such as Russia, for oil and gas.
• Strengthen heat pump system, components, and material supply chains.
• Create economic prosperity for communities, especially underserved communities, by ensuring access to federal resources.
• Support the creation of good-paying jobs.

This FOA has been re-opened to add three new topic areas:

• Topic Area 3: Residential Heat Pump Production Capability – The objective of this topic area is to create new or additional domestic production capability for heat pumps and components serving single dwelling residential units by constructing new commercial-scale facilities, expanding existing facilities, or retrofitting an existing production capability.
• Topic Area 4: Heat Pump Water Heater Production Capability – The objective of this topic area is to create new or additional domestic production capability for heat pump water heaters and components by constructing new commercial-scale facilities, expanding existing facilities, or retrofitting an existing production capability.
• Topic Area 5: All Other Heat Pump and Component Production Capability – The objective of this topic area is to create new or additional domestic production capability for all other heat pumps and components outside of Topic Areas 3 or 4 (for example, heat pumps serving multifamily dwelling units, commercial and industrial heat pumps) by constructing new commercial-scale facilities, expanding existing facilities, or retrofitting an existing production capability.