Biden admin cuts $85 million check to boost production of green appliances despite growing demand

The Biden administration is deploying roughly $85 million to boost production of a green appliance despite falling consumer demand, according to a press release from the US Department of Energy (DOE).

The White House on Wednesday announced nearly $85 million in grants for four producers of electric heat pumps, the DOE wrote in a statement. The announcement comes despite growing demand for the electrical appliance, with total US shipments of the product falling 16% in 2023, even as the federal tax credit increased from $300 to $2,000 in January 2023. seconds in a study by the Haas School of Business at the University of California, Berkeley.

“The Biden-Harris Administration's Investing in America agenda is making hundreds of thousands of energy-saving heat pumps right here in the US, helping American homes and businesses keep money in their pockets,” said Energy Secretary Jennifer Granholm in the statement.

Heat pumps cost an average of $10,750 to install, compared to an average cost of $4,700 for a new furnace in 2024. seconds a Forbes. Heat pumps have also become significantly less cost-effective to operate, with average US residential electricity prices rising 6.2% by 2023. seconds to the US Energy Information Administration (EIA).

Meanwhile, natural gas prices have fallen more than 70% in the past two years, from nearly $9/MMBtu in August 2022 to record lows of less than $2/MMBtu in 2024. the EIA report.

The $85 million in grants is the second round of funding the Biden administration has provided to heat pump manufacturing, with the administration unleashing $169 million to subsidize nine projects in November 2023.

“Under the leadership of President Biden and Vice President Harris, the United States is advancing clean energy manufacturing in the US, which is creating good-paying jobs, lowering energy costs for families and helping address the crisis climate, all while improving our country's energy security”. White House climate adviser Ali Zaidi said in the DOE press release.

In February, the Biden administration ended the increased regulations minimum energy and water efficiency levels for residential washers and dryers. Meanwhile, in April, the White House enacted a rule banning the gas stoves and appliances in federal buildings.

Biden's regulatory blitz on home appliances is expected to escalate expenses for the average American home by more than $9,000.

President Joe Biden is using his “wartime emergency powers” authorized by Defense Production to actin conjunction with the Inflation Reduction Act, to free up taxpayer dollars needed to finance heat pump projects.

“[Using] Show of funds from the Defense Production Act for the manufacture of heat pumps[s] that President Biden is treating climate change like the crisis it is,” John Podesta, the president's senior adviser for clean energy innovation and implementation, said of the first round of funding in November 2023.

The DOE did not immediately respond to a request for comment.

Latest messages from Owen Klinsky (see everything)

We have zero tolerance for comments that contain violence, racism, profanity, profanity, doxing, or rude behavior. If a comment is spam, instead of replying to it, click the ∨ icon below and to the right of that comment. Thank you for engaging with us in a fruitful conversation.