Heat Pump Ready Programme: Stream 2 – Wave 2 opportunities

Key Features

The Heat Pump Ready (HPR) Programme forms part of the £1 billion Net Zero Innovation Portfolio (NZIP) delivered by the Department for Energy Security and Net Zero (the Department). NZIP aims to accelerate the commercialisation of low-carbon technologies, systems and business models in power, buildings, and industry to help enable the UK to end its contribution to climate change.

Programme:     DESNZ

Award:     Share of up to £10 million

Opens: 23rd Nov 2023

Closes: 8th Jan 2024

! This scheme is now closed


This Competition Guidance document sets out details of the Heat Pump Ready Stream 2 – Wave 2 Competition (the Competition), a new £10m grant-funding innovation support scheme which is part of the existing Heat Pump Ready (HPR) Programme.

The Competition is to support applied research and development projects focused on driving down the lifetime costs of domestic heat pump deployment and improving the domestic consumer experience and acceptability of heat pumps. The supported projects can develop and demonstrate innovative technology, tools, business models or process innovation.


The overarching objective of the HPR Programme is to create an enabling environment for heat pump deployment at a significantly increased density and scale than the current deployment level. This enabling environment – to stimulate and support the high density deployment of domestic heat pumps in the UK – will be achieved through the development and trial of innovative technology and tools to address barriers faced across the landscape, in parallel to the development and trial of innovative methodologies and solutions for local coordination of high-density heat pump deployment, consumer engagement and network upgrades.

This translates into the following primary objectives for the HPR programme:

• Reduce the lifetime costs of domestic heat pumps (including capital equipment costs, installation costs and operating costs);
• Improve the lifetime consumer experience of heat pumps (including the experiences of: learning about and choosing a heat pump and how to pay for it; having a heat pump installed in the home and living with a heat pump);
• Stimulate innovative research and solutions to address the impact of domestic heat pumps on the electricity system;
• Improve the interoperability of domestic heat pumps with other smart technology in the home;
• Develop and strengthen partnerships between the many players involved in the domestic heat pump sector;
• Develop effective approaches and products to engage stakeholders effectively on heat pump issues with homeowners and with the key players who can help to deliver high density heat pump deployment across the UK;
• Establish an evidence base to enable effective design and development of future heat pump policy and regulation.

Delivery Approach

The HPR Programme is split into three, separate delivery streams:
• Stream 1: Solutions for High-Density Heat Pump Deployment.
• Stream 2: Developing Tools and Technology.
• Stream 3: Trial Support and Learning.

Stream 1 – Solutions for High-Density Heat Pump Deployment, is supporting the deployment of heat pumps through the development and trial of solutions and methodologies for the optimised deployment of domestic heat pumps, at high-density, in the UK. Stream 1 supported eleven Phase 1 (feasibility projects), which have now completed, and is currently supporting four Phase 2 demonstration projects.

Stream 2 – Developing Tools and Technology – Wave 1 is supporting the development of tools, technology and processes to overcome specific barriers to domestic heat pump deployment in the UK. Stream 2 – Wave 1 has supported 27 projects.

Stream 3 – Trial Support and Shared Learnings, is providing support to ensure knowledge transfer and shared learning across the HPR Programme and with external heat pump stakeholders. Stream 3 is being delivered by a consortium of contractors led by the Carbon Trust.

See here for further information on each stream.


Technology Scope 
The Competition will support applied research and development projects, focused on driving down the lifetime costs of domestic heat pump deployment and improving the domestic consumer experience and acceptability of heat pumps through technology, tools, business model and process innovation.

Up to £10m of grant funding is available in total through this wave of the HPR Programme. This funding will be allocated to applicants across four Challenge Categories, set out below. Applicants are expected to demonstrate that their project proposals fall into one of the four Challenge Categories (example eligible projects are provided in the Table 1 below).

The approach for allocating funding to projects in the different Challenge Categories is set out in Section 12.

The Department reserves the right to reallocate applications to a different category where appropriate. This reallocation will be conducted following the Department’s initial eligibility check and applicants will be notified of any re-allocation prior to commencement of technical assessment.


To be eligible for funding in the Competition, projects must meet certain eligibility criteria. For further information on this, please see competition guidance notes here 


Under no circumstances can the grant be claimed or used:

• For activities of a political or exclusively religious nature;

• In respect of costs reimbursed or to be reimbursed by funding from other public authorities or from the private sector;
• In connection with the receipt of contributions in kind (a contribution in goods or services as opposed to money);
• To cover interest payments (including service charge payments for finance leases);
• For the giving of gifts to individuals, other than promotional items with a value no more than £10 a year to any one individual;
• For entertaining (entertaining for this purpose means anything that would be a taxable benefit to the person being entertained, according to current UK tax regulations);
• To pay statutory fines, criminal fines or penalties; or
• In respect of VAT that you able to claim from HM Revenue and Customs

Funding Costs

Up to £10m of grant funding is available in total through the Competition. The maximum possible grant funding for a single project is £1.5m and successful project teams will be required to provide private sector funding alongside the grant funding provided from the HPR Programme. The level of private sector funding required for a project will depend on the type of research and development being carried out in the funded project and on the size and type of organisations receiving funding.

The funding will be allocated to applicants across four Competition Challenge Categories, set out below. Applicants must demonstrate that their project proposals fall into one of these four

Challenge Categories:
1. Improving the ease of heat pump deployment in homes that are ‘complex to decarbonise’1 by addressing physical, material, locational, technological, regulatory, or social challenges.
2. Developing innovative solutions to enable heat pumps to be deployed in ‘distress purchase’ situations when a new home heating system is required urgently.
3. Improving performance and/or reducing costs of domestic heat pumps with low-GWP refrigerants (i.e. below 150 GWP), while ensuring safety.
4. Reducing the lifetime costs or improving the overall lifetime performance of domestic heat pumps or improving the consumer experience of using and living with a heat pump


Interested in applying for this competition?

Book an appointment to speak to one of our advisors to discuss your eligibility to apply for this Grant Funding opportunity.