Biden Uses DPA To Fund Electric Heaters Measure
President Biden recently utilized a Cold War-era law, the Defense Production Act (DPA), in a surprising move on Friday to allocate federal funds towards domestic manufacturing of electric heat pumps. This alternative to gas-powered residential furnaces has been touted as a solution to reducing greenhouse gas emissions and combating climate change. The action is part of the Biden administration’s broad effort to address the climate crisis.
The Department of Energy (DOE) announced that it would provide a total of $169 million for nine projects at 15 sites nationwide. A significant level of funding became available after Biden issued an executive order invoking the DPA to boost domestic production of green energy technologies. These investments will aim to accelerate electric heat pump manufacturing and create thousands of high-paying jobs.
According to Energy Secretary Jennifer Granholm, the infusion of funds into domestic manufacturing of heat pumps will not only help families and businesses save money on their heating and cooling costs but also strengthen America’s energy supply chain. White House clean energy czar John Podesta added that this action shows the Biden administration is taking climate change seriously and is committed to growing domestic manufacturing and creating good-paying jobs.
However, not everyone is on board with this move. Senior fellow at the Competitive Enterprise Institute, Ben Lieberman, called the action “shameful corporate welfare” and expressed skepticism about the government’s role in “tilting the balance in favor of one energy source over another.” Lieberman also pointed out that there is no shortage of heat pumps, and the government has no place in dictating energy sources to consumers.
This announcement comes less than two months after the DOE issued new regulations targeting traditional gas-powered furnaces as part of its climate agenda. These regulations require furnaces to achieve a high annual fuel utilization efficiency (AFUE) of 95%, which would effectively take less efficient furnaces off the market. American Gas Association President and CEO Karen Harbert expressed disappointment in the use of the DPA as an instrument to advance a policy agenda that contradicts the nation’s strong energy position.
While the Biden administration believes that electric heat pumps can help reduce greenhouse gas emissions and improve energy security, others argue that increased use of natural gas has already been responsible for significant emissions reductions. Furthermore, consumers who replace their non-condensing furnaces with condensing furnaces after the new regulations go into effect in 2028 will face high installation costs.
The DPA was passed during the Cold War and gave the president broad powers to influence domestic industry in the interest of national defense. Biden has previously utilized the act to accelerate domestic critical mineral production and pause tariffs on Chinese solar panel imports, citing climate change as a national emergency. The DOE also recently announced new standards for a variety of other appliances, including gas stoves, clothes washers, refrigerators, and air conditioners, with the promise of significant cost savings and emissions reductions.
The impact of the Biden administration’s actions on domestic manufacturing and the fight against climate change remains to be seen. While there is potential for job creation and emissions reductions, there are also concerns about government intervention and potentially high costs for consumers. Only time will tell if this move will truly benefit the country’s energy future.