Overview
The Heat Pump Investment Accelerator Competition is designed to increase UK manufacturing capacity for heat pumps and related components. The scheme supports the construction, expansion, retooling, refurbishing or reworking of manufacturing facilities that can help strengthen UK supply chains, improve energy resilience and support the government’s net zero ambitions.
The competition is focused on capital investment that can help scale domestic production of heat pumps and components, including heat exchangers, compressors, evaporators, control systems and thermal storage systems that can be paired with heat pumps.
Scope
This competition will award non-repayable grant funding for eligible capital costs associated with the construction of a new heat pump or related components factory, or the extension, expansion, retooling, refurbishing or reworking of an existing facility.
Projects must involve the manufacture of heat pumps and/or heat pump components, such as heat exchangers, compressors, evaporators, control systems or thermal storage that can be paired with a heat pump.
As an accelerator scheme, projects must have a realistic chance of commencing manufacturing activities and drawing down all grant funding by no later than 31 March 2030. It is expected that all grant funding payments will be made by 31 March 2030. In exceptional circumstances, this may be extended where deemed necessary.
Projects will be monitored for up to five years following completion of construction and commencement of factory operations, to ensure delivery aligns with the commitments made in the application.
Key themes and topics
Eligible projects must focus on UK-based heat pump manufacturing and may include:
- Construction of a new manufacturing factory
- Expansion of an existing facility
- Retooling, refurbishing or reworking of an existing building
- Manufacture of heat pump units
- Manufacture of heat pump components
- Hybrid boiler and heat pump factories, where only the heat pump units and heat pump components are eligible for support
- Manufacturing of components such as heat exchangers, compressors, evaporators, control systems or thermal storage
- Highly efficient manufacturing processes and facilities
- Strengthening UK heat pump supply chains
- Improving UK energy security
- Supporting cost savings or improved outcomes for consumers
- Creating or safeguarding jobs
- Upskilling employees
- Supporting future expansion, improvement and diversification in the UK heat pump sector
Project timelines
Projects must have a realistic chance of commencing manufacturing activities by March 2030.
Grant funding is expected to be fully drawn down by 31 March 2030
Post-award monitoring may continue until 2034 to ensure projects deliver stated benefits and outcomes.
Award value
Grant funding request up to £30 million per project.
Funding rates
The maximum intervention rates are:
- up to 65% for a small company
- up to 55% for a medium company
- up to 45% for a large company
The maximum amount of funding that can be applied for is £30 million per project, subject to the maximum grant intervention rates.
Eligibility criteria
- Projects must be based in the UK
- Applicants must be a UK registered business, or a non-UK registered company that sets up an active UK registered business to undertake the project
- Projects must involve the manufacture of heat pump units and/or heat pump components
- Projects must be for the construction of a new manufacturing factory, or the expansion, retooling, refurbishing or reworking of an existing building
- Projects must have a realistic chance of commencing manufacturing activities by March 2030
- Consortium applications are permitted, but a lead applicant must be identified
- Applicants must provide their own substantial contribution to the investment costs of the project
- Subsidy control and state aid rules apply
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