Clean Manufacturing in America

This briefing highlighted the ways in which onshoring the manufacturing of clean energy, energy efficiency, and electric vehicle components increases American competitiveness, secures U.S. supply chains, and creates jobs. According to the 2024 Sustainable Energy in America Factbook, in less than two years, companies announced more than $123 billion in investments in over 100 U.S. manufacturing facilities as a result of the Inflation Reduction Act. These new domestic manufacturing operations are making a diverse set of products—from solar panels and batteries to computer chips and wind turbines—in locations across the country. Research from E2 finds that these manufacturing plants are expected to create 67,000 jobs in rural areas. 

Panelists discussed how this growth in domestic manufacturing supports the clean energy transition and helps meet increasing demand, all while reinvesting in the communities in which these factories operate. The briefing also explored recent Congressional actions that spurred this manufacturing boom, as well as possible policy opportunities to leverage the momentum. 

Highlights

KEY TAKEAWAYS

Domestic clean technology manufacturing is important because it ensures that U.S. workers are benefiting from economic gains, it will build reliable and affordable supply chains, and it secures U.S. leadership in new technology developments. Since the Inflation Reduction Act (IRA) (P.L. 117-169) and the CHIPS and Science Act (CHIPS) (P.L. 117-167) passed, $388 billion in investments have been announced in batteries, electric vehicles, solar, wind, and semiconductor manufacturing in the United States. According to some estimates, 336,000 manufacturing jobs will be created per year over the lifetime of the IRA, CHIPS, and Infrastructure Investment and Jobs Act (IIJA) (P.L. 117-58). Domestic manufacturing of electric vehicles leads to direct jobs in electric vehicle and battery manufacturing, indirect jobs for construction workers and electricians, and induced jobs in the restaurant, hospitality, and real estate industries. The Defense Production Act for Heat Pump Products program, a collaboration between the Department of Energy and the private sector, is a key way to bring domestic manufacturing to the United States. Domestic manufacturers can take advantage of advanced technologies, like industrial heat pumps, that make manufacturing processes more energy efficient and cost-effective.

 

Tom Lewis, Federal Policy Manager, Manufacturing and Industrial Policy, BlueGreen Alliance

• The BlueGreen Alliance includes manufacturing of components for solar energy, wind energy, clean hydrogen, carbon capture, heat pumps, electric vehicles, and electric vehicle charging in its definition of clean technology manufacturing, as well as related processes such as cement, steel, and aluminum production.
• Domestic clean technology manufacturing is important because it ensures that U.S. workers are benefiting from the available economic gains of innovative industries, which will redress some economic impacts from the decline of manufacturing jobs. Clean manufacturing will build reliable, affordable, and more ethical supply chains, improving national security, U.S. leadership, and economic wellbeing.
• The Inflation Reduction Act (IRA) (P.L. 117-169), the Infrastructure Investment and Jobs Act (IIJA) (P.L. 117-58), and the CHIPS and Science Act (CHIPS) (P.L. 117-167) are laws that invest in the development and growth of clean technology manufacturing in the United States.
• Since the IRA and CHIPS passed, there have been $388 billion in investments announced in batteries, electric vehicles, solar, wind, and semiconductor manufacturing. The United States spent $237 billion on manufacturing construction in December 2024, a massive growth from the $80 billion spent in October 2019.
• According to some estimates, 336,000 manufacturing jobs will be created per year over the lifetime of the IRA, IIJA, and CHIPS. This is in contrast to the significant decline in manufacturing employment over the last 20 years.
• The BlueGreen Alliance’s supply chain mapping tools allow viewers to see where investments are being made across the country.
• The Department of Energy (DOE) and the BlueGreen Alliance have analyzed gaps in supply chains. For example, some solar panel components may not currently have domestic suppliers.
• Policy considerations for clean technology manufacturing:
  • Continued growth in U.S. manufacturing capacity is not a given. Federal investments and support have to be sustained. 
  • Manufacturing is capital-intensive and requires long-term planning. Federal funding or lack thereof can make or break a project.
  • Manufacturing productivity has undergone a slowdown in the last decade. The public and private sector can work together to understand this phenomenon and generate solutions.
  • Labor unions and state employment offices play an important role in managing the demand for new manufacturing workers and preventing labor shortages.
  • Staff at agencies like the DOE provide essential research on supply chains and other manufacturing-related topics.

 

Leilani Gonzalez, Chief of Staff and Policy Director, Zero Emission Transportation Association

• Global electric vehicle sales increased 25% from 2023 to 2024, with 17 million battery electric and plug-in hybrid cars sold in 2024. One million fully battery-powered electric vehicles were sold in the United States in 2024.
• China and Europe are currently leading in electric vehicle sales. However, use of battery electric vehicles and plug-in hybrids have grown by 42% in the United States since 2015, and combustion engine vehicle sales have declined by 3%. This is a result of industrial policies, such as the IRA, and continued investment in the domestic supply chain.
• $188 billion in private sector investments have been announced in the electric vehicle and battery supply chain industries in the United States. An estimated $1.2 trillion is being invested in battery electric vehicles globally.
• The most expensive part of an electric vehicle is the battery, and there has been a 90% decrease in battery cost (from $1,400 per kilowatt hour to $115 per kilowatt hour) since 2010. This is a result of innovation, economies of scale, and domestic investments.
• As a result of public and private investments, the number of U.S. public electric vehicle charging connectors has doubled from 100,000 in 2020 to about 210,000 in 2024. This increases public interest in electric vehicles. Today, 64% of Americans live within two miles of public charging stations, and 47% of adults who live less than a mile away from a charger say they are more likely to purchase an electric vehicle.
• The increase in electric vehicle infrastructure, critical minerals availability, and electric vehicles on the road leads to direct jobs such as electric vehicle and battery manufacturing, indirect jobs in construction and electrical work, and induced jobs in the restaurant, hospitality, and real estate industries.

 

Charlie McCrudden, Director, Government Affairs, Daikin U.S.

• Daikin is the largest global manufacturer of heating, ventilation, and air conditioning (HVAC) solutions with more than 98,000 employees globally, of which 22,000 live in the United States.
• Daikin manufactures products in the countries where they sell products rather than importing and exporting. They have 25 production bases and nine research and development facilities in the United States.
• Daikin has three primary technologies: heat pumps, inverter compressors, and R-32 refrigerants. Daikin also makes fluorochemicals and air filtration systems.
• Daikin, along with the majority of the air-conditioning industry, started transitioning from high to low global warming potential refrigerants on January 1, 2025.
• Heat pumps are essentially air conditioners that can run in reverse. They are energy efficient and provide heating and cooling to homes and commercial buildings.
• Conventional compressors turn on and off when the thermostat is adjusted, which creates inefficiencies. An inverter compressor, however, runs with multiple speeds depending on the demand. If it is a mild day, an inverter compressor may run at 37% all day, saving energy and running much quieter than the conventional alternative. Only 10% of air conditioners in the United States have inverter compressors.
• The Daikin Technology Park is a $500 million investment providing 275 jobs on over 100 acres of land in Texas. This campus is where the Defense Production Act for Heat Pump Products project is taking place. Daikin received a $39 million matching grant from the DOE in 2024 to expand production and bring six types of heat pumps from Thailand, Belgium, and the Czech Republic to the United States. Examples include an air-to-water heat pump, which is a boiler replacement product, as well as Daikin’s cold climate heat pump product.
• The Defense Production Act for Heat Pump Products program is a key way to bring manufacturing jobs to the United States and show that the United States can make a wide range of heat pumps domestically.

 

Nora Wang Esram, Senior Director for Research, American Council for an Energy-Efficient Economy

• The American Council for an Energy-Efficient Economy (ACEEE) conducts research to support domestic energy policy, reduce energy waste, and improve overall efficiency of the economy.
• In 2022, the industrial sector used 33% of U.S. energy, accounting for 30% of energy-related carbon emissions. This energy usage has doubled over the past 70 years. Only 13% of industrial energy use is electric, while the rest is gas and liquid fuels.
• About 50% of energy consumed by the industrial sector is lost primarily through waste heat.
• Process heat used to convert raw materials into manufactured products accounts for 70% of industrial energy use. However, 42% of this energy is lost in the process.
• Many industries still use steam boilers. About 20% of boiler energy input is lost in the heating process, making boilers very low-efficiency. An industrial heat pump, which uses energy to move heat rather than generate heat, produces the same amount of heat with only a quarter of the energy required by a steam boiler.
• Heat pumps can currently meet 30% of industrial heating needs, and  higher-temperature heat pumps could meet 60% of the need.
• ACEEE tracks industrial electrification projects across the United States and frequently updates their industrial electrification map.
• Efficiency measures can be applied at the equipment level, facility level, and supply chain level.
• In addition to heat pumps, thermal heat batteries can also t convert electricity into heat, storing it for days.
• Complexity, competition, and cost are three barriers to entry for new, more efficient technologies and retrofitted systems.

 

Q&A

 

Q: How can manufacturers work with the communities where they are locating facilities to ensure that local residents are benefitting economically from the facility’s presence?

Lewis

• The Biden-Harris Administration and DOE required companies who applied for federal funding to develop Community Benefits Plans. This ensured that companies were working to understand the concerns of local stakeholders like labor unions, environmental organizations, residents, and nonprofits. This resulted in new partnerships and innovative agreements to bring job training, childcare, and other benefits to communities.

Gonzalez

• The Zero Emission Transportation Association (ZETA) Education Fund works to implement automotive education programs in communities. ZETA was in Savannah, Georgia, in February 2025 to support the Savannah Technical College partnership with Honda to develop an electric vehicle repair course which prepares students for certification.
• Panasonic, a member of ZETA, aims to bring jobs to communities, rather than bringing communities to their jobs. They consider many variables and partners when selecting a facility location, including community involvement, state and local incentives, academic institutions, chambers of commerce, and local government bodies.

McCrudden:

• Daikin completed a Community Benefits Plan when they applied for federal funding. Most of the plan is focused on training local technicians to install and maintain heat pumps.
• Daikin has been working with the Houston Housing and Community Development Department to install 100 high-efficiency, high-tech units in low- and moderate-income households over the next three years.

Esram

• A company’s ability to communicate with their local community is paramount. Today’s manufacturing is more efficient and cleaner. New manufacturing leaders are building trust with communities.

 

Q:  What are the benefits of clean, domestic manufacturing compared to the status quo?

Gonzalez

• People are building their lives around manufacturing investments. For instance, there are fast food chains, convenience stores, and small businesses that are popping up in rural areas near large developments.

McCrudden

• Gas utility companies ran ads in the late 1970s that claimed heat pumps blew cold air in the winter, and the stigma stuck. The Washington, D.C., Daikin office at 1700 Pennsylvania Avenue has a showroom with two chambers exhibiting the cold climate heat pumps and how they work. The showroom is not for consumers; it is for policymakers. The rest of the world uses heat pumps, so Daikin is trying to change U.S. perceptions of heat pumps to encourage use of the technology.

Esram

• Partnerships between industry and nonprofits are important to educate constituents and consumers. For example, ACEEE’s research serves to verify, validate, and communicate opportunities in industrial efficiency.

 

Q: How can the United States align industrial electrification with bringing more clean energy onto the grid? Are some companies producing their own power on site at their facilities? To what extent is resource circularity part of the work that needs to take place to address the inefficiencies that exist now, especially with regard to critical minerals?

Lewis

• Policy choices brought the United States to this moment. Reversing those choices stops the momentum of new manufacturing plants, electrification, and decarbonizing industry. The BlueGreen Alliance is focused on emphasizing this fact over the next few years.

Esram

• The industry had a similar conversation about 10-15 years ago with electric vehicle manufacturers where leaders asked themselves, “Are people going to buy an electric vehicle even though the grid is dirtier than filling up at a gas station?” Today, however, an electric vehicle is cleaner because the grid is now cleaner, so we are glad we made that investment a decade ago. We have to move things in parallel rather than wait until the grid is 100% clean because we do not have that much time.
• Focusing on efficiency is how we move forward with electrification.

Gonzalez

• The grid will vary from region to region in the United States. As there are more electric vehicles on the road, there will also be more opportunities to explore the use of electric vehicles as distributed energy resources, including in emergency situations.
• When electric vehicles batteries have exceeded their lifespan, used batteries can be repurposed as energy storage devices that help manage times of peak energy demand.

 

Q: What is the fastest growing clean manufacturing sector in terms of workforce? Which sectors might have bottlenecks? Are any of your organizations looking at power electronics manufacturing?

Lewis

• Solar, semiconductors, and batteries are experiencing the greatest investment right now. How much labor a facility needs varies, so it is hard to break down by sector. Job growth is highly correlated with sector growth.
• A big source of job growth right now is construction. Building the facilities that are going to produce these materials, especially semiconductors, is a high growth area. 

Gonzalez

• There has been a huge uptick in battery plants coming online. One bottleneck is a lack of understanding about what battery plant jobs involve. These plants are new, clean, and climate-controlled with brand new technology and robots, not old and dusty like the typical picture of traditional factories. We are trying to demystify the process and touch on the questions and curiosity of young people through education.

McCrudden

• The HVAC industry is established, not a disruptor like electric vehicles or solar. The bottleneck is at the technician level. The average technician installing these products is older, and the average age in this industry continues to rise because we are not attracting and training young technicians. The IRA included significant funding to train “home energy assessors” to be installers, which has produced great results so far. 

Esram

• Workforce development is an ongoing effort. In the case of low-carbon cement, contractors do not know how to work with it, so they send batches back saying it does not work. They need training on how to use this new material. The product itself is not enough without the installation infrastructure and workforce.

 

Compiled by Whitney Orloff and Hadley Brown and edited for clarity and length. This is not a transcript.