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$169m fund to boost US heat pump production

USA: Mitsubishi Electric US is to receive $50m in funding from the US Department of Energy to establish a heat pump compressor factory in Kentucky.

The funding is part of a $169m package announced by the US Department of Energy (DOE) for heat pump manufacturing projects by nine companies across 15 US sites. It also includes $33m to to boost heat pump production at three York International facilities. 

The funding from President Biden’s Inflation Reduction Act and the Defence Production Act also includes funding to increase R1234yf production at Honeywell’s Geismar facility.

The DOE says the selected projects are part of the US government’s efforts to build a clean energy economy, create jobs, improve air quality, reduce energy bills and reduce energy resilience on foreign adversaries. In total, the projects are expected to create over 1,700 jobs.

Heating and cooling buildings, homes, offices, schools, hospitals, military bases, and other critical facilities account for more than 35% of all US energy consumption. 

Armstrong International

Federal funding of  $5,083,719 has been pledged to add an extra 29,000ft2 to Armstrong International’s facility at Three Rivers, Michigan, for the manufacture of industrial heat pumps.  

Bard Manufacturing

Bard Manufacturing will receive  $9,208,605 to expand its Madison, Georgia, facility to produce wall-mounted single package vertical unit (SPVU) air conditioners and heat pumps. The expansion will include equipment for additional fabrication capacity and assembly equipment for a new heat pump line.


A Copeland project to increase production of high efficiency 1.5t to 40t heat pump compressors and hydronic systems will receive $11,488,975.

Investments will happen across four of Copeland’s manufacturing locations – Sidney (Ohio), Ava and Lebanon (Missouri) and Cudahy (Wisconsin) – and suppliers in several states. Ava 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 Copeland’s supplier facilities to expand production of the same new product line. 

Lebanon will enable production of a compressor modulation technology for the residential heat pump market as well as enhanced vapour injection technologies in commercial 30 and 40hp compressors. Sidney will introduce a hydronic heat pump system designed for the US market. Cudahy will expand production of screw compressor machining and assembly for heat pump systems. 

The project intends to expand the production capacity of residential heat pump compressors by more than one million units annually in the 1.5t to 5t range. It also targets the production of 6,500 hydronic heat pump systems domestically, expanding industrial hydronic heat pump production capacity by 50 units annually by 2030. 

Honeywell International

Honeywell’s R1234yf plant in Geismar

Honeywell is to receive funding of $14,792,351 to increase production of its HFO1234yf refrigerant at its current plant in Geismar, Louisiana.

The expansion, Honeywell says, would allow it to produce an additional quantity of heat pump refrigerant R454B, which is a blend of 31% HFO1234yf and 69% R32.

The DOE funding will contribute 40% to the total investment of around $36m. 

Hydro-Temp Corporation 

A 42-year-old ground-source heat pump manufacturer based in Pocahontas, Arkansas, Hydro-Temp will receive $10,852,448 to increase its heat pump production by over ten-fold.

The company currently manufactures the subassemblies used to build Energy Catalyst heat pumps as well as 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.

Hydro-Temp plans a major expansion of facilities and tooling to increase the manufacturing capacity from the current 250 units per year to over 2,500 units per year by 2025. The proposed facility upgrades allow for expansion of manufacturing capacity to exceed 5,000 units per year by 2027 if there is sufficient demand. 

Energy Catalyst will spend $10m for a 34,000ft2 facility that will contain automated manufacturing equipment, a high accuracy testing lab, an expansive contractor training room. 

Ice Air 

Funding of $17,613,002 will assist Ice Air to establish a new commercial-scale heat pump manufacturing facility in the USA.

Ice Air is a supplier of electric heat pumps for commercial residential buildings, and a leading provider for affordable housing in New York City.

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. 

Substantially all equipment is currently produced in Asia. The new facility will be in Spartanburg, South Carolina

Mitsubishi Electric US

Plans by Mitsubishi Electric to establish a factory to make variable capacity compressors for all-climate heat pumps will receive $50m in funding.   

Nearly all the variable capacity compressors currently used in all climate heat pumps sold in the US are manufactured in Asia. 

The proposed Mitsubishi Electric facility in Kentucky will include 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, trading as Gradient 

Backed by $17,501,816 DOE investment, Gradient intends to greatly expand the domestic manufacturing of its US-designed and made heat pumps that effectively serve Justice40 communities. Justice40 is a federal initiative to ensure that 40% of the overall benefits of certain federal investments flow to disadvantaged communities.  

Gradient’s US-designed and made U-shaped heat pumps

The project will establish a high-volume, vertically integrated manufacturing facility in Detroit to produce its innovative inverted-U configuration heat pumps. These heat pumps are said to 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 proposed manufacturing facility is to be located in a disadvantaged community and will have a production capacity of 100,000 units per year. 

York International

Funding of $33,067,270 has been awarded for the retrofitting of the York International factories in Wichita (Kansas), Waynesboro (Pennsylvania) and San Antonio (Texas) to boost production of over 200,000 residential, commercial and industrial heat pumps per year.

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