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If you've got proposals for a water source heat pump project in Scotland the challenge fund could offer support of up to £2 million.

Water source heat pump projects have the potential to make a big contribution to the Scottish Government's commitment to decarbonising Scotland's energy system by 2050.

The Water Source Heat Pumps Challenge Fund has been set up to:

  • Accelerate the delivery of large scale water source heat pump projects supporting district heating schemes in Scotland through the provision of renewable heat
  • Help develop proposals for the utilisation of the heat in Scotland’s rivers, lochs (sea and freshwater) and canals, delivering significant reductions in greenhouse gas emissions and/or energy consumption, which are sustainable on a long term basis, commercially and environmentally
  • Support the development of viable water source heat pump schemes which will have a positive social and economic impact on Scotland and the local community

What funding is available?

The challenge fund can offer support of up to £75,000 to assist with the development of an investment grade business proposal.

Up to £2 million, where that is 50% or less of the total cost of the project, of financial support is also available to support a commercially viable demonstration project.

Who should apply?

Expressions of interest are welcome from individuals or organisations in the public, private or community sectors with a commercial water source heat pump proposal.

You should:

  • Require support to understand the approach that investors take in assessing the invest-ability of low carbon solutions and to help develop their business proposal for a large scale water source heat pump project to highlight the scale of the investment opportunity and the potential


  • Have a fully developed investment grade business proposal for a large scale water source heat pump project but have been unable to identify private investment and are seeking financial support for a commercially viable demonstrator project

About the challenge fund

Water Source Heat Pumps Challenge Fund

The Water Source Heat Pumps Challenge Fund is being organised by the Low Carbon Infrastructure Transition Programme (LCITP).

The LCITP is a collaborative partnership between the Scottish Government, Scottish Enterprise, Highlands & Islands Enterprise, Scottish Futures Trust and sector specialists.

The LCITP will offer help and funding to support the development of low carbon and renewables projects to help ensure Scotland's energy system remains affordable to consumers by maintaining and developing secure supplies of energy and diversifying its sources of heat generation and supply to reduce our reliance on fossil fuels, and therefore support a resilient heat supply.

Next steps

Our funding call is now closed. But we can still help you develop your innovative products and services with a variety of support and funding:

Get in touch an innovation expert

Explore water source heat pumps opportunities with presentations from two free workshops that were run in Glasgow and Perth on 5 and 6 October, covering:

  • Heat Policy in Scotland and Renewable Heat from Water
  • Low Carbon Infrastructure Transition Programme
  • Regulatory Requirements for Water Source Heat Pumps

You can view the presentations from the workshops via Slideshare

Mike Spenser-Morris, managing director of NHP Leisure Developments and director of the Zero Carbon Partnership, also spoke at the workshops about the large scale water source heat pump scheme which provides the heating and cooling for the Kingston Heights housing development on the River Thames.

Read more about the Kingston Heights project on the Modern Building Services website

Applications will be measured against the challenge fund objective and eligibility criteria set out in the fund guidance notes:

Download the fund guidance notes (PDF, 292kB)

After feedback received at the workshop, the funding call guidance note has been revised to clarify the required minimum capacity of the Water Source Heat Pump scheme: 2MW heat capacity (not power capacity, as previously indicated).

More information on the funding challenge is available in our list of frequently asked questions (Word doc, 32kB)

The project team will offer provide high level feedback and recommendations.