The Water Efficiency Lab (WEL) is financed by household water and wastewater customers in England and Wales.
In 2025, Ofwat established the new £100 million Water Efficiency Fund (WEF), to drive a transformative, sustained, and measurable reduction in water demand across England and Wales.
The WEF is split into two streams:
The Water Efficiency Lab and Water Efficiency Campaign are delivered by separate delivery partners.
More information about the Water Efficiency Fund and the Water Efficiency Campaign is available on Ofwat’s website.
The Water Efficiency Lab and Ofwat Innovation Fund are delivered by the same delivery team, but are distinct.
The Water Efficiency Lab is part of the £100 million Water Efficiency Fund, to stimulate a significant reduction in public water supply demand in England and Wales through effective, large-scale, innovative and insightful projects.
The Ofwat Innovation Fund was established in 2020, and is a £600 million, 10-year Innovation Fund to grow the water sector’s capacity to innovate, enabling it to better meet the evolving needs of customers, communities and the environment. The Ofwat Innovation Fund comprises a number of different types of competitions and funding programmes, and between 2025-30, these will support water company-led innovations; create pathways for new innovators to the sector; convene stakeholders (from across sectors) around strategically important challenges; and enable the implementation of proven solutions.
The Independent Water Commission has reviewed the water sector in England and Wales and has set out a new direction. The UK government has confirmed it supports the recommendation to establish a new water regulator in England that will bring together Ofwat, the Drinking Water Inspectorate, the water functions of the Environment Agency and Natural England. The Independent Water Commission has also recommended changes to the regulatory arrangements in Wales for the Welsh Government to consider.
The UK government will publish a white paper in the autumn and bring forward legislation in 2026. The UK government has also confirmed that Ofwat will remain in place and continue to operate during the transition to the new regulator.
The government is not revisiting the 2024 price review funding decisions including the £100 million Water Efficiency Fund, which includes the £25 million Water Efficiency Lab. We will therefore continue delivering our business-as-usual activities, including the Water Efficiency Lab.
Following input from Ofwat, the Water Efficiency Fund Advisory Panel and a range of external stakeholders consulted during the research and design process, the Actionable Insights theme was selected for the first competition because measurement and understanding of water use is an enabler for customer engagement and subsequent actions to reduce water use. Helping customers to have a better understanding of their water usage will support future water efficiency interventions by providing foundational awareness and enabling customers to see the impact of actions to reduce water consumption.
Actionable insights are data about a customer’s water usage presented in a way that helps them understand and interpret their consumption and understand what actions they can take to reduce their water use.
The WEL is an annual, challenge-led competition, which means that the competition will have a different theme each year. For this first round of the WEL, we will only be seeking solutions to the Actionable Insights theme.
The Water Breakthrough Challenge (Breakthrough) is one of the competitions from the Ofwat Innovation Fund, and welcomes entries across all aspects of the water cycle, including water efficiency. Breakthrough operates on an annual cycle with two competition streams (Catalyst and Transform), and the current round of Breakthrough 6 is open until early January 2026. Entries to Breakthrough require a water company partner.
The Water Discovery Challenge (Discovery) aims to accelerate the discovery, development and implementation of promising, early-stage innovations by the water sector. Discovery will next open in January 2026, and entries do not require a water company partner.
For further information on expected delivery timeframes for winning entries, please see FAQ 4.6.
Themes for future competitions are still to be confirmed. During the research and design process for WEL 1, we explored a number of themes, which may still be eligible for future competitions.
‘Customers’ in WEL 1 refers to both household and non-household customers in England and Wales.
Whilst the definition of ‘customers’ covers both household and non-household groups, your solution does not need to provide benefits to both. We welcome entries that benefit one group only or both household and non-household customers, and will seek to fund a diverse portfolio of solutions.
Yes. We know that different groups of customers will have different requirements, whether because of their demographic type, water usage requirements or otherwise. A solution targeted towards a specific customer segment would be eligible.
We will seek to fund a diverse portfolio of solutions.
WEL 1 welcomes entries from a diverse range of innovators, including water companies (wholesalers, NAVs and water retailers), behavioural science firms, tech companies, software developers, hardware manufacturers, consultancies, non-profit organisations and universities.
To be eligible, the lead entrant must:
We will not accept applications from individuals.
We strongly encourage entries from partnerships of organisations/consortia, whether this is organisations that have already worked together, or the formation of new partnerships that bring additional value to individual entries.
If a water company is one of the partners on an entry to the WEL, they do not need to be the lead entrant; the lead entrant can be another type of organisation, with a water company as a supporting partner.
You do not need to be partnered with a water company to be eligible to enter, however in some cases partnership with a water company might be beneficial or even necessary for successful development and implementation of your solution.
Where water company support is important to ensure adoption of the type of solution, we would expect to see at least one water company partner.
If your solution has other routes to market available (e.g. B2C, B2B) that don’t require a water company to adopt the solution, then a water company partner may not be required.
All entries will be expected to show a viable route to market, which forms part of the assessment criteria.
Yes, a single organisation can enter. It is not mandatory to enter as part of a partnership or consortium.
We are hosting a networking event on 15 January 2026 in London to help connect organisations who are seeking to form partnerships. This will be open to all types of organisations who may be interested in entering the WEL to attend. Find out more information on the Entrant Support page.
If you are unable to attend this event, we encourage you to share your information in the Partnerships form and use this as a resource to find and contact organisations who might have the skills and expertise you require to enter WEL 1. Please note that the Partnerships form is hosted in Google Forms; you do not need a Google account to complete it. Find out more information on the Entrant Support page.
A senior, accountable person employed by the lead entrant will act as the signatory.
Partnerships should be in place for as long as is required for successful delivery of the initiative.
Register your interest in forming partnerships through our Partnerships form. Once you have submitted details of your organisation, expertise areas and where you’re looking to form partnerships, you will receive access to all responses from other organisations. You are then free to contact any organisations who may be of interest as a partner. Please note that the Partnerships form is hosted in Google Forms; you do not need a Google account to complete it.
We are also hosting a networking event on 15 January 2026 to enable in-person networking. Find out more information and register to attend.
Do also ensure that you’re subscribed to our newsletter to hear about any new events and other opportunities to connect with other organisations interested in meeting partners to submit an entry to the WEL.
If you are new to the water sector, you may also wish to contact Spring, the water sector’s centre of excellence for innovation. In particular, we recommend you read the Water Innovation Strategy 2050 and the Water Innovation Strategy Ecosystem Guide.
We have not set out a preferred make-up of partnership/consortia as we do not want to restrict any opportunities. Entries will be assessed against the assessment criteria.
You can read the full assessment categories and guidance for WEL 1 on the assessment criteria webpage.
The lead entrant of any successful entries will receive the funds and is responsible for any relevant legal agreements.
It is a contractual matter between members of a partnership to make their own arrangements on how the funds and responsibilities will be split and allocated between different parties within the partnership. This also applies where there is a consortium of water companies.
The WEL strongly encourages entrants to develop collaboration agreements in advance of the project start to avoid delays if the entry is successful. Water companies have developed their own template ‘Collaboration Agreement’ for use in other Ofwat Innovation Fund competitions, which may be a useful starting point. Download the latest version from the Water Breakthrough Challenge Key Materials page.
The WEL 1 welcomes entries from all sectors, and innovative propositions can be from anywhere in the world. Whilst we are open to both domestic and international organisations, to be eligible, lead organisations must be a UK incorporated entity and hold a UK business bank account upon entry. International organisations are welcome to form partnerships with UK-based entities to support them to enter.
We are looking for entries which meet the Challenge Statement and the assessment criteria for WEL 1. We have shared some example solutions on the Challenge Theme page to further describe the kinds of innovations we might expect to receive – this list is illustrative only and not exhaustive; we expect to receive a range of applications outside of these examples.
Entries will be assessed based on how well they meet the assessment criteria rather than directly on their maturity level, however we expect that mid-level maturity solutions are most likely to be able to meet the assessment criteria well. In particular, entries will need to show that they have potential to deliver significant water consumption reduction, as set out in the Impact criteria, and that they have a feasible pathway to implementation and scaling as set out in the Adoption and Implementation Plans criteria.
We welcome entries from all sectors and all types of organisations, however entrants must be able to demonstrate that their solutions will benefit customers, communities and the environment across England and Wales in alignment with the Challenge Statement.
We are seeking truly innovative entries that go beyond current approaches, market offerings and sector practices.
Pre-existing initiatives or projects can be submitted, but must explain how the entry goes beyond and is better than existing approaches. This requirement is detailed further in the Innovation assessment criterion.
The scope of the initiative you are entering should be made very clear. Please note, the entry will be assessed based on what will be delivered as part of that scope rather than the scope of any wider initiatives.
The WEL is an annual, challenge-led competition, which means that the competition will have a different theme each year; the themes for future competitions are still to be confirmed. The same entry may be submitted to future rounds, provided it can comply with the theme and criteria for that round; however, as the themes will be different, it is expected that the entry would need to be significantly adapted to be able to meet the challenge statement in future years.
We expect entries awarded funding in WEL 1 to complete in a timeframe commensurate with the level of funding and maturity level of the project, and within 3 years of commencing. This timeframe aligns with the challenge statement and the aims of the WEL to drive a transformative, sustained, and measurable reduction in public water demand across England and Wales. Initiatives with a longer timeframe to complete will be considered and their merits assessed against the assessment criteria.
We expect initiatives entered into WEL 1 to start within three months of being awarded funding. We strongly encourage entrants to consider the following points in advance of the project start to avoid delays if the entry is successful:
The location of work will be up to those submitting the entry.
If there are any datasets that might help accelerate the development of your potential solution before the entry deadline, we would encourage you to share details of this in our Partnerships form, which aims to facilitate partnership formation between potential entrants. This will allow any potential partners to identify whether they may have access to datasets that would support your solution, and therefore be interested in partnering with you to develop an entry to submit to the WEL.
For funded projects, we may be able to facilitate and support access to additional datasets, for example through working with Stream and water companies. Please provide details of datasets that your solution would benefit from in Section B, part d, question ix. We can’t guarantee that access to any data sources can be provided and your solution should be fully feasible based on the assets currently available to your team.
Approximately £5 million in total is available in WEL 1. Individual entries will be able to request between £150,000 and £1.5 million. Entries requesting between £100,000 and £150,000 are also eligible to enter provided that they are digital-led and will complete within 12 months.
The lead entrant will receive the funds.
Funding will be awarded in pounds sterling (GBP) into a UK business bank account associated with the lead entrant’s organisation.
Entrants are responsible for all applicable taxes and other charges.
The lead entrant will receive the funds. It is a contractual matter between members of a partnership how the funds will then be split and allocated between different parties within the partnership. This also applies where there is a consortium of water companies.
Funding is paid in advance. Payment is expected to be made soon after winners are announced in June 2026.
We expect entries to demonstrate cost efficiency and good use of customer money, with a clear case for any costs included in the entry budget.
Strong entries will reassure assessors, the judging panel and Ofwat that entrants have a realistic cost breakdown and financial plan, with cost risks and associated contingency arrangements identified.
Tab 3.3. in the Project Delivery Template is designed to help assessors and judges to understand and assess the entry’s budget. You are advised to provide clarifying information in the description column, especially where there are large sums attributed to budget items.
We are open to initiatives that have successfully secured additional external public or private funding (including from other competitions run by Ofwat). However, entrants must confirm that:
If you have entered an innovation into another Ofwat funded competition, such as Breakthrough 6, you can still enter WEL 1. However, you will not be able to receive funding for the same innovation from both competitions. This means that if your entry is selected as a winner for Breakthrough 6 you will need to decide whether to accept the Breakthrough funding and withdraw your WEL 1 entry, or to withdraw from Breakthrough and continue as a WEL 1 entrant, at your own risk of potentially not being selected as a WEL 1 winner. Breakthrough 6 winners will be informed in mid-April 2026; WEL 1 winners will be informed in mid-June 2026.
Funds from this competition are not classified as subsidies within the UK Subsidy Control regime (previously referred to as ‘State Aid’).
A maximum of 90% of the total financial cost of the entry will be provided by funding from WEL 1. Entry partners must provide the remaining 10% of the entry’s total costs as a mandatory 10% contribution. Entry partners have the flexibility to decide how the remaining 10% is funded, as long as it is not funded by charges to water customers in England and Wales. As such, contributions towards the mandatory 10% from wholesaler water companies and Newly Appointed Variations (NAVs) must be financial. Financial or in-kind contributions are allowable from non-water companies, including SMEs, universities, charities and water retailers.
We welcome any additional financial and/or non-financial contributions beyond the minimum 10%.
A calculation field has been added to Tab A of the Project Delivery Template to help with entry cost percentage calculations.
Following confirmation from HMRC, receipt of funds through the competition is not subject to VAT.
Activities undertaken within entry projects are subject to VAT and are subject to the usual rules of recoverability for water companies.
Entry delivery costs should be inclusive of applicable taxes, which are not recoverable, reflecting the true costs of the initiative.
Where taxes are fully recoverable, such as VAT, costs should be shown net of (excluding) the recoverable amount.
Taxes that are not recoverable should be included, for example, customs duties payable on goods imported into the UK.
Nominal prices are money in today’s value rather than a deflated or inflated value. For example, water companies often operate in 2022/23 prices in line with the current AMP cycle.
You are welcome to use your preferred approach to calculating overheads; please provide details of the approach you have used within the template. You are advised to provide clarifying information in the description column, especially where there are large sums attributed to budget items. Assessors and judges will be assessing whether your entry demonstrates a realistic and considered costing which provides efficient use of customer funds.
Yes, please feel free to change the formatting and overwrite any formulas for the Project Delivery Template.
The Project Delivery Template is provided as a guide. Please ensure all the relevant information required by the Project Delivery Template is included and easy to identify.
A summary of what you are required to submit to enter WEL 1 is provided on the Water Efficiency Lab How to Enter page.
You can submit as many entries into the WEL 1 as you like, providing each entry is for a different initiative. We will ensure that we progress a diverse portfolio of entries in terms of solution types, entrants and geographic location.
All answers in this entry form are treated confidentially except 0.1 (Entry title) and 0.2 (Entry Description) in the ‘General questions’ assessed section of the entry form.
Ofwat may include non-confidential information about your entry in decision documents and other publications.
Please refer to the Challenge Terms and Conditions, ‘Publicity’ section, for more information.
We are committed to enabling a diverse range of entrants to enter WEL 1. If there are any reasonable adjustments that would support you to enter, catering for any additional needs you may have, please contact [email protected].
Our entry form platform, Submittable, supports a wide range of screen readers and accessibility software.
If you wish to work on more than one draft of the online entry form during the entry period, please contact the team at [email protected] for assistance, with the subject line ‘Support to submit multiple entry drafts on Submittable’.
You can now transfer ownership of a Submittable entry to another user at any time. You can see guidance on how to do this on Submittable.
If you’re having any problems with Submittable, please contact the team at [email protected] for help with the subject line ‘Submittable help’. There are self-service help files available directly from Submittable.
Unfortunately, the export feature in Submittable strips away any rich text formatting, such as bold, italics and bullet points. Submittable is exploring adding exporting rich text formatting in their development roadmap, but please be reassured that assessors and judges have access to review your entry directly on Submittable so they can see entries with all the formatting that is input when you submit.
There are known issues with using Submittable when using certain firewalls, which block the ability to upload documents to Submittable. At this time, we are aware that this most commonly affects entrants using Submittable while the Dŵr Cymru Welsh Water firewall is active.
Where possible, please save your entry and attempt to use a device not using a firewall, but if this isn’t possible or practical, please feel free to send any relevant attachments to [email protected] with reference to your entry, and we will attach them on your behalf.
We offer one-to-one surgery sessions during the entry period to give entrants an opportunity to ask questions about the entry process. They aim to help clarify publicly available information and support entrants in understanding the guidance currently available.
You can sign up for a 15-minute session, and one or more members of the delivery team from Challenge Works, Isle and Arup will aim to answer all your questions on the short call. If we aren’t able to answer your question on the day, we will then go away and aim to get back to you as soon as possible with an answer. You will be asked to tell us about your query when signing up, to ensure that we get the relevant people onto the call.
Please check whether your question is already answered in the Entrant Handbook or FAQs before booking a session to ensure that we can direct support where it’s most needed. We may cancel your session where your question is not in scope (e.g. it is seeking guidance on the entry itself) or can be answered in the Entrant Handbook or FAQs, and direct you to the relevant answers.
You are welcome to bring along multiple team members.
Surgery sessions will be carried out using Zoom. If this is a technical issue for you, please email us at [email protected], and we can organise a phone call or use Microsoft Teams.
Please note the delivery team will not be able to provide any guidance on entries themselves through the surgery sessions.
A maximum of 90% of each entry’s total costs will be provided by funding from WEL 1. Entry partners must provide the remaining 10% of the entry’s total costs as a mandatory 10% contribution. The requirements for this 10% match contribution depend on the type of entrant.
The match funding policy allows in-kind contributions to minimise barriers to entry, however we will review the commitment demonstrated through WEL 1 contributions and reserve the right to adjust the policy for future competitions.
In-kind contributions are non-cash resources that are essential for the project’s delivery and have a measurable monetary value. Allowable contributions must be auditable, valued at the true market rate, and directly support the entry’s objectives.
Example in-kind contributions include staff time (salary plus on-costs), asset or facility use (based on rental value), and donated services (valued at market rate).
Contributions must be auditable. Ofwat reserves the right to require evidence of actual contributions made, e.g. signed timesheets, usage logs, formal valuation
Contributions must be valued at true market rate, and must not be inflated or marked up for profit. For example:
Contributions must directly support the entry’s objectives i.e. they must be necessary for the project and would not otherwise have been purchased.
The following are not eligible in-kind contributions:
Please contact the Water Efficiency Lab team at [email protected] if you have any questions about eligible in-kind contributions.
No, the match contribution cannot come from public funding. While additional support from external sources is welcome, the intention of the match funding requirement is to ensure commitment and encourage strong project management from entrants. Therefore the contributions must be from within the entrant organisations.
In-kind or non-financial contributions that count towards the mandatory 10% contribution are not allowable from wholesaler water companies or NAVs.
We welcome and encourage any commitment that exceeds the minimum 10% contribution. This can be in the form of additional financial (cash) or additional in-kind contributions. Wholesaler water companies and NAVs are therefore welcome and encouraged to provide in-kind contributions that are additional to the minimum 10% contribution.
There are no IPR requirements for the WEL 1. IPR brought into the challenge by an innovator remains with the innovator with no obligation to share it royalty-free. IPR developed during the challenge also remains with the innovator with no obligation to share it royalty-free.
Sharing learning is key to the Water Efficiency Lab, as reflected in the Impact category of WEL 1’s Assessment Criteria. As such, the monitoring requirements for successful entrants will include an aspect of sharing learning about what has and hasn’t worked. Executive summaries of learnings may be published to support dissemination of learning; we will work with entrants to ensure that no sensitive information is disclosed.
We are looking for entries that are able to address our Challenge Statement, as determined by the Assessment Criteria.
After the entry deadline closes on 10 March 2026, all entries will be assessed and judged by a team of technical assessors and an independent judging panel, against the published assessment criteria.
In selecting solutions for funding, judges will consider both individual merit against the assessment criteria and the overall portfolio of funded solutions. This means that funding decisions will balance choosing the individual entries that best meet the assessment criteria with ensuring we support a diverse mix of solution types, approaches, and innovation stages that maximises impact across the water efficiency challenge.
Yes, entrants will receive high level summary feedback based on the assessors’ and judges’ review of your entry.
If your entry is successful in receiving funding, your team is expected to:
Sharing learning is key to the Water Efficiency Lab, as reflected in the Impact category of WEL 1’s Assessment Criteria. As such, the monitoring requirements will include an aspect of sharing learning about what has and hasn’t worked, both during the lifetime of the project as well as part of the final report process. Executive summaries of learnings may be published to support dissemination of learning; we will work with entrants to ensure that no sensitive information is disclosed.
We currently use Zoom for both of these, although this is subject to change. Please ensure you have downloaded the desktop version of Zoom to enable full functionality. Read advice on joining a test call.
