Scotland is accelerating its transition to net zero through innovative energy solutions, and one of the key drivers is Scotland’s Heat Network Fund (SHNF).

In our simplified guide, we've broken the fund down and explore how this capital grant programme supports the development of zero emission heat networks, who can apply, what the funding covers, and how Reheat can help you navigate the process and deliver successful projects.

Helpful tips for applicants

1. Engage early with consultants to assess feasibility and funding options
2. Demonstrate impact: Highlight carbon savings, community benefits, and cost-effectiveness
3. Ensure compliance with the Heat Networks (Scotland) Act 2021
4. Collaborate with local authorities, housing associations, and energy partners

What the Fund Supports

SHNF provides funding for:

• New heat networks using low or zero direct emissions technologies.
• Expansion of existing networks, provided the additional heat demand is met by zero emission sources.
• Decarbonisation of existing networks, replacing fossil fuel systems with clean alternatives.

Eligible technologies include shared ground loop heat pumps, biomass, and other low-carbon solutions.

Eligibility Criteria

To qualify, projects must:

• Be located in Scotland
• Use zero direct emissions heat sources
• Deliver social, environmental, and economic benefits
• Meet definitions under the Heat Networks (Scotland) Act 2021:

District heat network: Heat distributed to multiple buildings

Communal heating system: Heat distributed within one building with multiple units‍

‍Application Process

Step 1: Expression of Interest

Submit an expression of interest at any time. If successful, you’ll be invited to submit a full application.

Step 2: Full Application

Applications are assessed based on:

• Eligibility
• Strategic fit
• Budget availability

Note: Funding cannot be used for costs incurred before a grant offer letter is signed

Funding Timeline

• Projects must draw down funding by March 2030.
• Commissioning after this date must be agreed with the Scottish Government.
• The fund is demand-led, meaning funding is allocated based on the volume and quality of applications.

Strategic Context

SHNF is part of a £300 million commitment to support heat network development in Scotland. It complements initiatives like the Heat Network Support Unit (HNSU), which provides pre-capital support such as feasibility studies and strategic planning.

Targets include:

• 2.6 TWh of heat by 2027
• 6 TWh by 2030 from heat networks

How Reheat Can Help with Heat Networks

As a leading provider of low carbon district heating solutions, we have a proven track record in helping clients secure funding and deliver high-efficiency heat networks across Scotland and the UK.

Funding Expertise

• We have helped clients secure over £7 million in heat network funding in under three years
• Our team offers techno-economic feasibility studies, regulatory advisory, and funding application support tailored to SHNF and other schemes

End-to-End Services

Reheat provides a complete district heating service, including:

• Design and installation of new systems
• Optimisation of existing networks
• Performance assessments and remedial works to reduce heat losses
• Operation, controls, and monitoring for long-term efficiency

Proven Impact

• Achieved 98.7% reduction in backup fossil fuel use on a 90-property district heating system
• Delivered feasibility, design, installation and remedial projects for clients including The National Trust, Highland Council and NHS Highland
• Supported community energy schemes and complex installations in historic buildings, social housing, and off-grid locations

Whether you're planning a new heat network or upgrading an existing one, Reheat can help you navigate the funding landscape, design efficient systems, and deliver measurable carbon savings.