The U.S. government is currently sitting on $35 trillion in debt, with trillions more in unfunded liabilities, and the Biden administration is spending even more money it doesn’t need to boost the production of “green” products Americans don’t want, specifically heat pumps.
On Wednesday, the U.S. Department of Energy (DOE) announced it would award approximately $85 million to four heat pump manufacturers to accelerate production of electric heat pumps, heat pump water heaters and heat pump components at five factories in New York, Tennessee, Texas and Rhode Island.
“Extreme weather events negatively impact the electric grid and are a major driver of rising electricity bills, so we need to increase access to energy-efficient technology,” Energy Secretary Jennifer Granholm said in a press release. “The Biden-Harris Administration's Invest in America plan will manufacture hundreds of thousands of energy-efficient heat pumps here in the United States, helping American homes and businesses save money while strengthening our national security and creating good-paying jobs.”
Inexcusable conduct
This is the Department of Energy's second “investment” in heat pumps. Last November, the department announced it would spend $169 million to increase heat pump production, with President Joe Biden claiming he has the authority to do so under the Defense Production Act (DPA). According to The Hill, the Cold War-era law “gives the president the power to mobilize certain industries to advance national security, and the administration argues it applies to producing greener energy.”
That's bullshit, of course, but Biden has used — or rather abused — the DPA to push his “green” policies and alleviate shortages of baby formula and (alleged) COVID tests, yet Congress has done nothing to stop Biden, other than issuing strongly worded press releases, so Biden's unconstitutional spending can go ahead and do more.
The DOE claims that “the investment will enable the production of an additional 155,000 residential heat pumps, 440,000 residential heat pump water heaters, 2,000 school heat pumps, and 20,000 large heat pump compressors in the United States each year,” which will create “more than 500 high-quality, high-paying jobs, including 220 jobs in disadvantaged areas.”
Consumers aren't excited
There's just one problem: People aren't buying heat pumps. According to an April blog post by the Energy Institute at the Haas School of Business at the University of California, Berkeley, U.S. heat pump “shipments will decline 16%, from 4.3 million in 2022 to 3.6 million in 2023,” and will continue to fall sharply this year, falling 12% in the first two months of 2024 alone.
This recession isn't the fault of rebellious Americans. It's happening in Europe too. So what's causing it?
Lucas Davis, a professor at the Haas School of Business, cites three causes. First, electricity prices are rising. Residential electricity prices in the U.S. rose more than 6% last year. Second, natural gas prices are at an all-time low. “This is bad news for heat pumps, because natural gas is the predominant form of heating in the U.S. In many parts of the country, natural gas is the main rival of heat pumps, so cost-conscious consumers will compare prices before installing a new heating system.” Third, current high interest rates make it harder for consumers to borrow, and with new heat pumps costing an average of 129% more than new heaters, people are more likely to buy new heaters or simply repair and keep what they have.
Over-priming the pump
So, on the one hand, the federal government is subsidizing the production of heat pumps, artificially increasing the supply of heat pumps, and on the other hand, it is inflating the money supply and manipulating interest rates to suppress demand for heat pumps, making them so expensive that even a $2,000 tax credit is not enough to induce consumers to buy them. The only result is an oversupply of heat pumps and a subsequent reduction in production to market levels.
And what happens to the “quality, high-paying jobs” the administration touts? Without continued subsidies, they will disappear and the “greedy” businessmen who cut them will be blamed. By that time, the election will be over and Democrats will have realized the political gains of the initial subsidies. The ultimate outcome of the subsidies will be irrelevant.
Indeed, that seems to be the case with the administration's other “green” efforts. From gas stoves to dishwashers, Biden's Department of Energy has piled on regulations to save us from the so-called climate crisis, with little consideration for the unintended consequences, not the least of which is an extra $9,200 in costs to consumers, according to the Consumers Union. No doubt these, too, will be blamed on “corporate greed.”
White House National Climate Adviser Ali Zaidi said:
“Under the leadership of President Biden and Vice President Harris, the United States is exponentially advancing clean energy manufacturing, creating good-paying jobs, lowering household energy costs, helping to address the climate crisis, and strengthening our nation's energy security. As communities across the country continue to face the impacts of extreme climate-driven weather, investments in American-made heat pump manufacturing will help keep families safe and comfortable at home, school and work, and reduce energy costs.”
“And,” he might have added, “Santa Claus and the Easter Bunny are real.”
