The government has announced a £270m Green Heat Network Fund to support low-carbon technologies like heat pumps, solar and geothermal energy.
At present, there are over 14,000 heat networks in the UK, providing heating and hot water to around 480,000 consumers.
The previous Heat Networks Investment Project (HNIP) provided more than £165m of funding for schemes across England and Wales since 2018.
The new Green Heat Network Fund (GHNF) will only accept applications if they include low-carbon heat-generating technologies, such as heat pumps, waste heat and energy from geothermal sources.
The Green Heat Network Fund is expected to fund the delivery of an estimated 10.3Mt of total carbon savings by 2050 or the equivalent of taking 4.5 million cars in England off the road for a year.
Energy Minister Lord Callanan said: “Finding a mix of innovative solutions to how we heat our homes in the most affordable way is going to be vital as we support people to gradually transition away from gas boilers over the next 15 years.
“Today’s announcement shows we are going even further in our goals to expand this tried and tested heat networks technology, making even more use of the likes of recovered heat from the London Underground to heat our homes.
“The Green Heat Network Fund will also allow us to drive forward the new, cost-effective and low-carbon technologies we need to kick-start new industries and support new jobs in the low-carbon technology sector as we build back greener from the pandemic.”