Heat Pump Ready Programme Round 2: Innovation Funding Competition

Funding Amount

The Heat Pump Ready Programme Round 2 is an innovation funding competition from Department for Energy Security and Net Zero (DESNZ) to support applied research and development projects that develop innovative technologies addressing key barriers to heat pump uptake.

The competition will provide up to £20 million in total grant funding to support eligible research and development projects.

• Total funding pool: Up to £20 million.

• Maximum award amount per project: £2 million.

• Minimum award amount per project: £200,000.

• Matching fund requirements: Successful project teams will be required to provide private funding alongside the grant funding provided from the competition.

The maximum percentage of total project costs covered by the grant varies depending on business size and project type.

Eligible Applicants

Applications are open to the following applicant types:

• Individual private sector businesses applying as sole applicants

• Consortia of project partners led by a private sector business

• Private sector businesses of any size are eligible for funding

• Sole applicants must be:

• a private sector incorporated UK business, or

• a business incorporated overseas with a UK registered branch or establishment on Companies House

• For consortium applications:

• the lead must be a private sector business

• the lead may be UK incorporated or incorporated overseas with a UK registered branch or establishment on Companies House

Eligible Activities

The competition is designed to fund applied research and development projects that develop innovative technologies focused on overcoming one of four identified barriers to heat pump uptake:

• Capital cost of heat pump system hardware and components

• In-property changes required

• Internal and external space requirement

• Time taken for heat pump install from accepted quote.

Additional project requirements and eligible conditions include:

• Applications must be for a brand-new project or extend previously or currently funded work to create substantively new products, applications or processes

• Eligible costs must be incurred in the UK

• Subsidy recipients must intend to exploit the results of the project activity in the UK

• Projects should aim for a start date of 1 February 2027, where possible

• All grant-funded activities must be completed by 30 January 2030

• Projects must meet specified Technology Readiness Level and Commercial Readiness Level criteria

• Projects whose innovations materially influence heat pump system energy performance must demonstrate that the innovation, as part of a complete heat pump system, can achieve a Seasonal Performance Factor of at least 3.5 in a real-world home environment by the end of the funded project period

• This includes recording a minimum of 12 months of performance data on an in-situ innovative heat pump system trialled within a home.

Program Deadline

25 June 2026